Sensex hits half century on Saturday’s special trading session

Saturday’s special trading turned out to be a positive one for the stock markets as the frontline equity indices snapped the session with gains of around one third of a percent and settled around the important psychological 5,200 (Nifty) and 17,200 (Sensex) levels.

The session was characterized by choppiness as there were limited market participants while most foreign funds abstained from the trade which lasted for less than two hours. The special session for live trading today in capital market and F&O segments was conducted as NSE upgraded the capacity of Futures and Options trading system hardware and software to the next generation system to improve processing capability and handle increased activities in the market.

Though, the local markets finished on a positive note in the session but for the week they plunged around one and half a percent. Sentiments in the session were supported by overnight upmove in US and European markets. The shares on Wall Street rose overnight on the back of encouraging quarterly earnings which counterbalanced the weaker than expected US economic growth numbers which came in at an annualized rate of 2.2% in the first quarter, down from 3% at the end of 2011.

Investors added positions, overlooking the S&P’s downgrade of Spanish sovereign debt rating, after the weaker than expected US economic growth numbers triggered speculations that the US Fed would now have to employ third round of quantitative easing measures in order to stimulate the world’s largest economy.

On the domestic front, sentiments were cautious as after the S&P’s downgrading of economic outlook, IMF lowered India's growth forecast to 6.9 percent for this year. However, the multilateral agency has retained India's growth estimate at 7.3 percent for 2013.

Meanwhile, investors showed across the board buying interest with the PSU counter being the top gainer after amassing over a percent gains.  The rate sensitive counters too remained in limelight and helped the benchmark indices move higher. Though there remained no sectoral laggard, some individual names like heavyweight Reliance, Bharti Airtel and L&T failed to keep their heads above the water and settled with marginal losses.

The NSE’s 50-share broadly followed index Nifty, gained by one third of a percent to settle just above the psychological 5,200 support level while Bombay Stock Exchange’s Sensitive Index - Sensex added fifty three points to finish below the crucial 17,200 mark. Moreover, the broader markets too gained traction and outperformed their larger peers by a slight margin as they settled with around half a percent gains.

The markets gained on extremely tepid volumes while the market breadth remained optimistic as there were 1196 shares on the gaining side against 656 shares on the losing side while 338 shares remained unchanged.

Finally, the BSE Sensex gained 53.09 points or 0.31% to settle at 17,187.34, while the S&P CNX Nifty rose by 18.40 points or 0.35% to close at 5,209.00.

The BSE Sensex touched a high and a low of 17,212.36 and 17,125.88 respectively. The BSE Mid cap and Small cap index were up by 0.51% and 0.42% respectively.

The major gainers on the Sensex were Sterlite up 2.16%, Maruti up 1.29%, Bajaj Auto up 1.04%, ICICI Bank up 0.95% and Jindal Steel up 0.91% while RIL down 0.28%, Bharti Airtel down 0.20%, L&T down 0.12%, Coal India down 0.06% and TCS down 0.04% were the major laggards on the index.

The major gainers on the BSE sectoral space were PSU up 1.32%, Realty up 0.74%, Metal up 0.72%, Bankex up 0.64% and Consumer Durables up 0.50%, while there were no laggards on the BSE sectoral space.

Meanwhile, an expert committee on sugar decontrol is scheduled to meet on the 3rd of May to examine the issue of decontrol of the sugar industry. The committee headed by Prime Minister's Economic Advisory Council Chairman C Rangarajan also includes Chief Economic Advisor in Finance Ministry Kaushik Basu, secretaries to the Department of Food and Agriculture, Agricultural Costs and Prices (CACP) Chairman Ashok Gulati, former Agriculture Secretary Nand Kumar and K P Krishnan, Secretary EAC.

It is being said that the committee is in favour of deregulating the industry, though they have categorically stated that the final decision will be taken after hearing the views of all the stakeholders concerned.

The sugar industry is completely controlled by the government, right from the level of production to distribution. As per regulation sugar mills are required to sell 10% of their output to the government at below-cost rates for supply to ration shops and also the food ministry allocates the quantity of sugar to be sold in the open market every month. Sugar mills have been supplying the levy sugar at 60% of the cost of production, resulting in an annual industry loss of about Rs 2,500-3,000 crore.

The Apex sugar industry bodies, Indian Sugar Mills Association and National Federation of Cooperative Sugar Factories, have sought partial decontrol of the sector, including freedom to sell sugar in the open market and doing away with the levy obligation for the Public Distribution System (PDS).

The S&P CNX Nifty touched a high and low of 5,216.40 and 5,196.35 respectively.

The top gainers on the Nifty were Sterlite up 1.73%, Axis Bank up 1.73%, Ranbaxy up by 1.53%, Jindal Steel up 1.28% and Sesa Goa up 1.23%.

On the flip side, Siemens down 0.93%, Grasim down 0.42%, Kotak Bank down 0.35%, HCL Tech down 0.29%, and Reliance down 0.21% were the top losers on the index.