Indian benchmarks inch lower; late recovery minimizes damage

A session after staging a stupendous over two percent rally, Indian benchmark equity indices went on to consolidate the gains and settled with moderate cuts. Though, the frontline indices failed to extend their gaining momentum and snapped the three session gaining streak, however the recovery in the second half minimized the extent of damage for the bourses. The psychological 5,500 (Nifty) and 18,100 (Sensex) levels proved as strong supports as the benchmarks rebounded after hitting intraday lows. Investors took to mild profit booking after the recent sharp uptrend as sentiments remained bleak across the Asian region after reports indicated that the second bailout package to Greece will be delayed until after the country holds elections in April 2012, reigniting worries that Europe will struggle to avert its debt debacle. Hefty profits booking in index heavyweights like Coal India and Reliance Industries along with high beta metal stocks like Hindalco and Sterlite exerted pressure on the frontline indices. Coal India bore the maximum brunt of selling pressure as it slumped  over five percent on concerns of falling margins over assured coal supply to power producers while Reliance got pounded amid reports of falling gas output from its KG-D6 well. However, stocks from the Power counter kept racing ahead a day after India’s Prime Minister cleared coal supply to private sector power producers. Meanwhile, airline stocks like Kingfisher, Jet Airways and Spice Jet rallied higher after state-owned oil companies have cut jet fuel prices by a marginal Rs 350 per kiloliter, the second reduction in this month. Stocks like ONGC and BHEL too settled in the positive zone after an empowered group of ministers has approved the auction route for selling 5 percent stake in state-run oil major ONGC before the end of the current fiscal. The proposed disinvestment of government stake in BHEL has, however, been postponed to the next fiscal. On the global front, Asian markets settled on gloomy note while the European counterparts too traded in the negative territory after reports that European officials considered delaying a bailout package for Greece.

Earlier on the Dalal Street, the benchmark got off to a weak opening as investors largely remained influenced by the gloomy sentiments prevailing in Asian markets. After the subdued opening, the frontline indices got dragged to lowest levels in late morning session as cautious investors took to profit booking. However, the pessimism withered in the second half and the benchmarks showed signs of recovery since mid afternoon trades. The key gauges hit the highest point in late hours but settled off the intraday highs. Eventually, the NSE’s 50-share broadly followed index Nifty fell by ten points to close above the crucial 5,500 support level while Bombay Stock Exchange’s Sensitive Index or Sensex lost a quarter percent and ended above the psychological 18,150 mark. Moreover, the broader markets showed resilience and settled with strong gains, outperforming their larger peers by a fat margin. On the BSE sectoral space, high beta Realty counter remained the top gainer in the space with gains of over one and half a percent followed by the Power counter which went home with over a percent gains. On the flipside, the Metal and Oil & Gas pockets remained the top laggard with over one and half a percent losses each. The markets gained on large volumes of over Rs 1.80 lakh core while the turnover for NSE F&O segment remained on the lowered side as compared to that on Wednesday at over Rs 1.33 lakh crore. The market breadth was positive as there were 1,640 shares on the gaining side against 1,292 shares on the losing side while 112 shares remained unchanged.

Finally, the BSE Sensex lost 48.42 points or 0.27% to settle at 18,153.99, while the S&P CNX Nifty declined by 10.00 points or 0.18% to close at 5,521.95.

The BSE Sensex touched a high and a low of 18,182.78 and 18,043.32 respectively. The BSE Mid cap and Small cap indices up by 1.04% and 0.96% respectively.

The major gainers on the Sensex were Jindal Steel up 4.94%, Hero MotoCorp up 4.57%, SBI up 4.38%, Maruti Suzuki up 4.10% and Bajaj Auto up 3.81%, while, Coal India down 5.44%, Hindalco Industries down 4.71%, Sterlite Industries down 4.16%, Tata Motors down 3.67% and Tata Steel down 3.23% were the major losers on the index.

The top gainers on the BSE sectoral space were Realty up 1.53%, Power up 1.37%, Capital Goods (CG) up 0.65%, IT up 0.49% and Auto up 0.34%, while Metal down 1.63%, Oil & Gas down 1.53%, Consumer Durables (CD) down 0.92% and FMCG down 0.02% were the top losers on the BSE sectoral space.

Meanwhile, oil companies have cut jet fuel prices by a marginal Rs 350 per kilolitre. This is the second reduction this month after the cut of 3% on February 1.

Indian Oil Corporation (IOC) has stated that the price of aviation turbine fuel (ATF), or jet fuel in Delhi was cut by Rs 350.7 per kilolitre (kl), or 0.5%. The revised prices of ATF would now be Rs 62557.12 per kilolitre in Delhi, Rs 70816.98 in Kolkata (against the current price of Rs 71155.22), Rs 63499 in Mumbai (Rs 63864.31) and Rs 67339 in Chennai (Rs 67702.21).

Jet fuel constitutes about 40% of an airlines' operating cost and the reduction in prices will slightly ease the burden on cash-strapped airlines.

The three public sector OMCs  - Indian Oil, Hindustan Petroleum and Bharat Petroleum - revise ATF prices on the 1st and 16th of every month on the basis of the average international price in the preceding fortnight.

The S&P CNX Nifty touched a high and low of 5,531.40 and 5,483.75 respectively.

The top gainers on the Nifty were Hero MotoCorp up 4.34%, Jindal Steel up 4.27%, SBI up 4.10%, Maruti Suzuki up 3.62% and Cairn up 3.17%.

On the flip side, Coal India down 5.84%, Hindalco down 5.14%, Tata Motors down 4.12%, Sterlite Industries down 3.86% and Tata Steel down 3.77% were the top losers on the index.

The European markets were trading in red as France's CAC 40 down 0.37%, Britain’s FTSE 100 down 0.74% and Germany's DAX down by 1.14%.

After witnessing a decent rally in yesterday’s session Asian shares fell on the back of another delay in cementing a crucial bailout for Greece underscored how far Europe is from resolving a debt crisis that threatens the stability of the financial system. A three-hour teleconference between euro zone finance ministers failed to resolve all the issues surrounding a second aid package for Athens, putting off any decision on the matter until Monday at the earliest.

Seoul’s index ended down by 1.40 percent as foreign investors turned net sellers for the first time in nine sessions. Moreover, China shares ended down 0.40 percent, with resource shares sagging after data showed that foreign direct investment in China declined for a third straight month while, Nikkei retreated from a six-month high in choppy trade, but sentiment remained upbeat on the back of easing steps from the Bank of Japan.