Benchmarks pare most of their early gains to snap the session modestly in green

Extending their northward journey for fifth straight session, Indian equity benchmarks ended the Monday’s trade with modest gains. Earlier, markets traded firmly for most part of the trade as sentiments remained up-beat on reports that foreign institutional investors bought equities worth Rs 390 crore on Friday, as per provisional stock exchange data. Some support also came with Prime Minister Narendra Modi assuring more reforms while rolling out the red carpet to investors, especially the multinationals, inviting them to make use of the large pool of highly talented youth in the country.

Investors’ confidence got boost after annual rate of inflation, based on monthly wholesale price index (WPI) ebbed way below street expectation at -0.39% in January as compared to 0.11% in December on the back of sharp correction in oil prices. However, markets wiped-out most of their early gains in the dying hour of trade, mainly on the back of subdued start of European equities, while profit-booking by participants ahead of holiday also weighed on the sentiment. Markets remain shut on Tuesday .i.e. February 17 on account of ‘Mahashivratri’.

On the global front, European markets made a weak start as investors awaited the euro zone finance ministers meeting in Brussels to see if common ground would be found with Greece’s new government. Asian markets ended mostly in the green as data showed Japan’s economy exited recession. Gross domestic product grew at an annualized 2.2% in the three months through December; undershooting street’s forecast for a 3.6% rise.

Back home, investors seemed more hopeful of faster reforms in the government’s 2015/16 fiscal budget due on February 28 after the Prime Minister Narendra Modi-led Bharatiya Janata Party was routed in Delhi state elections. In positive news, there was report that overseas investors have pumped in over Rs 10,000 crore in Indian capital markets in the first two weeks of this month. Meanwhile, select stocks from metal space edged higher as the government received about 130 initial bids from Essar, Hindalco and Adani Power and others for 21 ready-to-mine coal blocks on the Schedule 3 of blocks on offer.

Additionally, shares of oil marketing companies edged higher after the petrol price were hiked by 82 paisa per litre and diesel by 61 paisa, the first increase since August 2014 and follows firming of oil prices in the international market. On the flip side, healthcare stocks tanked, led by 2% fall in Sun Pharma after its December quarter profit declined. The drug major reported a 6.92 percent fall in its consolidated net profit at Rs 1425.07 crore for the third quarter ended December 31 2014. Net sales of the company fell to Rs 4279.54 crore for the quarter under consideration, as against Rs 4286.59 crore during the same period of previous fiscal.

The NSE’s 50-share broadly followed index Nifty edged higher by around four points and managed to hold the psychological 8,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by over forty points to regain its psychological 29,100 mark. Broader markets struggled to get any traction and ended the session mixed. The market breadth remained in favour of decliners, as there were 1,315 shares on the gaining side against 1,595 shares on the losing side, while 102 shares remained unchanged.

Finally, the BSE Sensex rose 40.95 points or 0.14% to 29135.88, while the CNX Nifty gained 3.85 points or 0.04% to 8809.35.

The BSE Sensex touched a high and a low of 29325.35 and 29083.40, respectively. The BSE Mid cap index was down by 0.03%, while Small cap index was up by 0.06%.

The top gainers on the Sensex were ITC up by 3.11%, TCS up by 1.71%, Hindustan Unilever up by 1.62%, HDFC up by 1.54% and Bharti Airtel up by 1.53%. On the flip side, Sun Pharma down by 2.65%, Axis Bank down by 1.73%, Hindalco down by 1.73%, Hero MotoCorp down by 1.70% and ICICI Bank down by 1.66% were the top losers.

The top gaining sectoral indices on the BSE were FMCG up by 1.79%, Realty up by 0.97%, INFRA up by 0.65%, Power up by 0.61% and Auto up by 0.45% while, Oil & Gas down by 0.99%, Consumer Durables down by 0.98%, Bankex down by 0.92% and Healthcare down by 0.87% were the few losing indices on BSE.

Meanwhile, in the second tranche of ongoing auction for 21 coal mines, the government has received 130 preliminary bids from companies like Essar Power, Hindalco, Adani Power and Jindal Power. A maximum of 16 bids came for Utkal C coal block in Odisha from bidders including Jindal Power, Essar Power, Sesa Sterlite and Adani Power Maharashtra, while another block Gare Palma IV/8 in Chhattisgarh received 13 bids from companies like Hindalco, JSPL, Sesa Sterlite and Balco among others.

Notably, Hindalco Industries piped six companies, including Monnet Ispat & Energy, Rungta Mines, UltraTech Cement and the prior allottee Usha Martin to bag the Kathautia mine in Jharkhand by offering Rs 2,860 per tonne of coal. While, Sunflag Iron & Steel beat Balco, Reliance Cement and Topworth Urja and Metals bagged Belgaon block in Maharashtra at Rs 1785 per tonne. The block was earlier owned by Sunflag and has 14 million tonne reserves.

In the first stage of the auction, the government found as many as 134 applications “technically qualifiable” of the total 176 preliminary bids received for 21 coal blocks that have been put for electronic auction The government had initially planned to auction 23 mines in first lot but had put on hold bidding for two mines due to litigations. The Ministry would go ahead of with the auction of mines as per schedule though there have some court cases as a consequence of which there have been some changes.

The CNX Nifty touched a high and low of 8870.10 and 8793.40 respectively.

The top gainers on Nifty were ITC up by 3.06%, NMDC up by 2.56%, TCS up by 1.81%, Bharti Airtel up by 1.79% and Hindustan Unilever up by 1.59%. On the flip side, Sun Pharma down by 2.74%, Axis Bank down by 1.86%, Hindalco down by 1.69%, ICICI Bank down by 1.69% and Hero MotoCorp down by 1.68% were the top losers.

European Markets were trading in the green; Germany’s DAX was down by 0.15% and UK’s FTSE 100 was down by 0.24%, while France’s CAC gained 0.02%.

The Asian indices ended mostly in green on Monday, as Japan posted growth in the fourth quarter albeit at a slower pace than expected, but managed to exit recession. Japan’s economy rebounded from recession in the final quarter of last year but growth was weaker than expected as household and corporate spending disappointed, underlining the challenges premier Shinzo Abe faces in shaking off decades of stagnation. The annualized 2.2% expansion in October-December was smaller than a 3.7% increase forecast, suggesting a fragile recovery, as the hangover from last year’s sales tax hike lingered. Japan’s GDP rose to a seasonally adjusted 0.6%, from -0.6% in the preceding quarter whose figure was revised down from -0.5%. The preliminary reading for gross domestic product (GDP), which translates into a quarter-on-quarter increase of 0.6%, follows two straight quarters of contraction.

Foreign direct investment (FDI) in China grew at its strongest pace in nearly four years in January, surging 29.4% from a year earlier to $13.9 billion as investors largely shunned the troubled manufacturing sector and focused on the more resilient services industry. Indonesia posted a higher-than-expected trade surplus in January as global oil prices slumped. Southeast Asia’s biggest economy saw exports slide 8.09% on-year to $13.30 billion and imports sank 15.59 percent to $12.59 billion.