Sensex finishes yet another choppy session on a quiet note

Stock markets in India went to extend their consolidation phase this Tuesday with the benchmark equity indices hardly budging from their previous closing levels as investors lacked conviction to open fresh positions amid a lot of uncertainties surrounding the global as well as domestic markets.

The psychological 5,300 (Nifty) and 17,500 (Sensex) levels proved as difficult nuts to crack for the frontline indices, which drifted lower immediately after crossing those levels. The frontline indices pruned most of their gains after hitting intraday highs in early morning session and settled on a flat note with trivial gains. The key gauges gyrated in a tight range in positive territory for most part of the day.

Local markets underperformed their Asian counterparts, which settled on an optimistic note amid hopes that world’s major central banks including those in the Europe, the US and China would employ monetary easing measures to support their respective flagging economy. The European markets traded on a flat note after reports showed manufacturing around the world shrank largely because of the onerous financial trouble in European Union, however, they traded with a positive bias on hopes of central banks’ policy action to bolster growth.

Back home, the upside was capped as investors remained worried over monsoons prospects as it got delayed by two weeks. Monsoon rains were 31 percent below average from June 1 to July 2, losing even more pace in the last week after being 23 percent below average to June 27.

Moreover, the automobile index closed on a flat note after reports showed weak buyer sentiment continued to affect automobile sales of June and it is unlikely to improve until the festival season that begins in September.

Further, stocks from the Cement sector too remained subdued after majors like ACC and Ambuja Cement reported a modest growth in production at 1.97 million tonnes and 1.78 million tonnes respectively, in June. However, stocks like Bharti Airtel and Idea Cellular from the telecom sector rallied substantially after Telecom Disputes Settlement and Appellate Tribunal (TDSAT) gave a split verdict on a challenge by mobile phone operators seeking to overturn a government order requiring them to stop offering 3G services beyond their licensed zones through mutual roaming pacts.

Besides, cues from the money markets were supportive as Indian rupee appreciated to its strongest level in nearly a month and traded at sub 55 levels against the US dollar. On the BSE sectoral space, profit booking was evident in the defensive FMCG and IT sectors, which fell around half a percent. However, investors were busy piling up positions in the Consumer Durables and high beta Realty pockets which surged about 3% and 2% respectively.

On the global front, Asian markets settled on an optimistic note with the benchmark in Hong Kong surging over one and half a percent and leading the rally from the front. The equity indices in Indonesia, Singapore and Taiwan too closed with over a percent gains. However, European markets got off to a tepid start but gained ground gradually and extended their gaining momentum on hopes that the ECB will lower rates in its meeting scheduled later this week due to a flood of rather dismal economic reports since the last meeting.

Back home, the NSE’s 50-share broadly followed index Nifty, hardly budged from its previous closing levels to settle below the psychological 5,300 support level while Bombay Stock Exchange’s Sensitive Index - Sensex rose about twenty seven points to finish above the crucial 17,400 mark. Moreover, the broader markets too settled on a positive note with notable gains of around half a percent and outclassed their larger peers.

The markets rose on weak overall volumes of over Rs 1.18 lakh crore on the third day of a new F&O series while the turnover for NSE F&O segment remained on the higher side as compared to that on Monday at over Rs 0.84 lakh crore. The market breadth remained in favor of advances as there were 1,728 shares on the gaining side against 1,139 shares on the losing side while 98 shares remained unchanged.

The BSE Sensex gained 26.73 points or 0.15% to settle at 17,425.71, while the S&P CNX Nifty rose by 9.35 points or 0.18% to close at 5,287.95.

The BSE Sensex touched a high and a low of 17,526.82 and 17,351.50 respectively. The BSE Mid cap index was up by 0.48% and Small cap index up by 0.80%.

Bharti Airtel up 3.11%, Hindalco up 2.27%, Coal India up 1.96%, HDFC up 1.96% and Gail India up 1.87% were the major gainers on the Sensex, while BHEL down 1.59%, Jindal Steel down 1.46%, TCS down 1.43%, ITC down 1.30% and HUL down 1.04% were top losers on the index.

The top gainers on the BSE sectoral space were Consumer Durables (CD) up 2.98%, Realty up 1.96%, PSU up 1.03%, Metal up 0.77% and Oil & Gas up 0.64%, while FMCG down 0.76%, IT down 0.50% and Power down 0.10% were top losers on the BSE sectoral space. 

Meanwhile, in the back drop of decline in India’s exports by 4.16 %, Commerce and Industry Minister Anand Sharma, has convened a meeting of Consultative Group on Exports of Pharmaceutical Products, today to review the status of Indian pharmaceutical exports and developments in the industry in the global market. The meeting with pharmaceutical industry players will discuss the ways to enhance shipments, promote 'Brand India' in global market and also to provide research and development in the sector.

Sharma emphasized the importance of maintaining quality, safety and efficacy of Indian medicines for the promotion of Brand India Pharma in important markets and to attain a leadership position in the world in exports.

India is the third largest producer of pharma products by volume and the industry is growing at a rate of 15% -20% annually. The domestic pharmaceutical industry has marked $20 billion and is expected to touch $75 billion by the end of this decade. While, India's pharma exports were about $13 billion last year, it remained to share one fifth of generic medicines market in the world. 

The S&P CNX Nifty touched a high and low 5,317.00 and 5,265.95 respectively.

The top gainers on the Nifty were DLF up 4.20%, Bharti Airtel up 2.90%, Hindalco up 2.15%, PNB up 2.09% and HDFC up 1.95%. On the flipside, BHEL down 1.79%, Jindal Steel down 1.55%, TCS down 1.50%, Grasim down 1.28% and ACC down 1.12% were the top losers on the index.

The European markets were trading in green, as France's CAC 40 up 0.09%, Germany's DAX up 0.71% and United Kingdom’s FTSE 100 up 0.26%.

In spite of slowing down in manufacturing PMI data around the world along the major economies such as China, US and Euro zone, global equities are still rallying on the hope that there will be a policy easing from the major Central banks including the Federal Reserve. On July 05, 2012 there will be an announcement regarding policy schedule by the Bank of England and European Central Bank for buying 50 billion euro in asset purchase and 25 basis point cut.

Nikkei rose to 8 weeks high on Tuesday with Banking and insurance companies posting biggest gains after its three biggest banks were upgraded by Daiwa Securities. Shanghai Composite ended flat as gains led by property developers were offset by concern that economic slowdown has dragged corporate earnings. Hang Seng Index climbed in early trading on the hopes of policy easing by world’s central banks. Property and resource sector making most of the gains. Strait Times extended its gains for fifth consecutive sessions with Palm Oil firm Golden Agri-Resources making most of the gains. Kospi Composite Index closed at two weeks high as Energy and Shipbuilding shares outperforming with SK Innovation, South Korea's largest crude oil refiner rallying 4.6 percent while Daewoo Shipbuilding & Marine Engineering soared 6.1 percent.