Sensex snaps two session downtrend; settles with marginal gains

It turned out to be a lackadaisical performance from the Indian equity markets on Tuesday as the benchmark indices somehow managed to negotiate a close in positive territory, rising marginally above the previous closing levels. The frontline gauges showed signs of consolidation and settled just shy of the psychological 17,250 (Sensex) and 5,250 (Nifty) levels a session after suffering severe across the board pounding.

Despite the trivial gains, the key indices not only halted the two session downtrend but also outperformed their European counterparts which traded with large cuts. Markets remained on the edge as uncertainty loomed over the GAAR provisions amid reports that FIIs have asked the government to remove the applicability of GAAR to foreign portfolio investment.

Investors also chose to remain on the sidelines ahead of a lot of important events on the domestic front this week like IIP data for February, WPI Inflation numbers for March, RBI’s policy stance in its quarterly monetary policy review and IT bellwether Infosys’ earnings announcement for the January-March quarter.

Meanwhile, amid a weakening macroeconomic backdrop, the Finance Ministry is likely to meet ratings agency S&P to defend India's fiscal deficit roadmap and will explain their concerns over the ratings outlook.

However, the Petroleum and Natural Gas Regulatory Board (PNGRB) decision to fix the new tariff and compression charges for the gas companies did not seem to have gone down well with investors who severely bludgeoned Indraprastha Gas stocks by over thirty percent while other gas stocks like GAIL India, Gujrat Gas, Petronet LNG too got tormented in the session.

Besides, foods stocks like LT Foods, Kohinoor Foods and KRBL spurted in the session after almost a decade, Indian basmati rice exporters have now started direct shipments to Iran.

The downside for the frontline indices was capped by the gains in defensive FMCG counter while the rate sensitive Automobile, Banking and Real Estate pockets too chipped in with their contribution to keep the bourses afloat in the green. However, investors were seen squaring off hefty positions from the Capital Goods counter while IT and Metal pockets too bore the brunt of selling pressure.

On the global front, sentiments in the Asian region remained mixed as some markets pruned their early gains by the end of trade. On one hand Chinese markets climbed after reporting an unexpected trade surplus for March while the Japanese bourses dipped into the red after Bank of Japan kept monetary policy steady, holding fire until a more thorough assessment of the economy at another rate review on April 27.

The European peers got off to a somber open opening as major equity indices coming from an extended weekend traded with large cuts of over a percent as concerns spurred by weak US jobs data about the world's largest economy overshadowed positive trade numbers from Germany and China.

Back home, the NSE’s 50-share broadly followed index Nifty, amassed single digit gains to settle below the psychological 5,250 support level while Bombay Stock Exchange’s Sensitive Index - Sensex added twenty one points to finish just below the crucial 17,250 mark. Moreover, the broader markets settled on a weak note with the Mid Cap index underperforming all its peers as it went home with relatively higher loss.

The markets consolidated on tepid volumes of over Rs 1.10 lakh crore while the turnover for NSE F&O segment remained on the higher side as compared to that on Monday at over Rs 0.82 lakh crore. The market breadth remained negative through the session as there were 1,337 shares on the gaining side against 1,432 shares on the losing side while 150 shares remained unchanged.

Finally, the BSE Sensex gained 21.70 points or 0.13% to settle at 17,243.84, while the S&P CNX Nifty rose by 9.20 points or 0.18% to close at 5,243.60.

The BSE Sensex touched a high and a low of 17,274.69 and 17,135.76 respectively. The BSE Mid cap and Small cap index were down by 0.26% and 0.12% respectively.

The top gainers on the Sensex were Tata Power up by 3.83%, Tata Motors up by 2.85%, Hindustan Unilever up by 2.63%, SBI up by 2.37%, and ITC up by 2.19% while BHEL down by 2.89%, Gail India down by 1.82%, Infosys down by 1.63%, ONGC down by 1.42%, and Sterlite Industries down by 1.42% were the major losers on the index.

The top gainers on the BSE sectoral space was FMCG up by 1.99%, Auto up by 0.85%, Bankex up by 0.48%, Realty up by 0.18% and Consumer Durables up by 0.15%, while Capital Goods down by 0.95%, IT down by 0.94%, Metal down by 0.90%, TECk down by 0.72%, and Oil & Gas down by 0.63% were the top losers on the BSE sectoral space.

Meanwhile, the government has decided not to allow any further exports of cotton in the current marketing year also, the already registered export orders will be executed only after proper scrutiny and revalidation. A Group of Ministers (GoM), headed by Finance Minister Pranab Mukherjee, that met on April 09 has decided not to allow any fresh registration for cotton exports. The decision has come at a time when the government is facing severe criticism for its ban on exports and pressure has been mounting from Gujarat to allow fresh registrations.

In an earlier move on March 5, the government had banned all future exports of cotton stating a shortage in domestic supply and a tendency of hoarding by mills in foreign locations. However, the ban faced severe criticism from all quarters and was partially lifted on March 12, 2012. Exports of the already registered orders were allowed post their proper scrutiny.

However, on April 9, it has been decided that given the domestic demand supply situation and the stocking need of the Cotton Association of India (CAI), no further registrations shall be entertained. Also the Registration Certificates issued during January and February are being scrutinized to find out whether there are any ‘fictitious' export transactions. As per the Commerce Secretary, Rahul Khullar, over 85% of cotton exports go to China and there is evidence of stockpiling there.

Cotton prices have remained firm over the past few days in expectation of the ban being lifted. Shankar 6 variety was being quoted at 34,000 a candy of 356 kg each against 32,000 candy a fortnight ago. The Cotton Corporation of India had to suspend its procurement services in Andhra Pradesh in the past week since prices ruled above the minimum support price of 3,300 a quintal.

The S&P CNX Nifty touched a high and low of 5,255.80 and 5,211.85 respectively.

The top gainers on the Nifty were Tata Power up by 4.24%, RCOM up by 3.19%, Tata Motors up by 2.88%, Kotak Bank up by 2.81%, and HUL up by 2.79%.

On the flip side, BHEL down by 2.54%, Ambuja Cement down by 2.48%, Ranbaxy down by 2.41%, GAIL down by 2.24%, and BPCL down by 2.03% were the top losers on the index.

The European markets were trading in red, as France's CAC 40 down 1.48%, Britain’s FTSE 100 down 1.00%, while Germany's DAX was down by 1.07%.

Stock markets in the Asian region exhibited mixed trend on Tuesday as investors cautiously re-evaluated the global growth outlook following recent downbeat economic data in the US and China. In Tokyo, the Nikkei Stock Average reversed course to finish the day down 0.10 percent, as the yen appreciated after the Bank of Japan left its policy interest rate and the size of its asset purchases unchanged. The drop marked a sixth straight day of decline for Japanese shares.

Meanwhile, Chinese Shanghai Composite surged by 0.90 percent after the nation posted a trade surplus of $5.35 billion in March, reversing a $31.48 billion deficit in February due to much weaker-than-expected imports. Imports grew 5.3 percent in March from February’s 39.6 percent increase. However, Hong Kong’s Hang Seng Index lost about 1.2 percent as traders returning after a four-day weekend responded to a disappointing US jobs report.