Trend reversal in last leg of trade helps bourses to gain some strength

After witnessing consolidation and downtrend in last few sessions, domestic bourses added some strength garnering gain of about half a percent on Wednesday. Though, benchmarks traded cautiously near their last closing for most part of the day’s trade but, pull back in last leg of trade helped local indices to regain their crucial 5,200 (Nifty) and 17,150 (Sensex) mark. The recovery was mostly followed by trend reversal in Power segment as the sector is expecting some supportive decisions from the Cabinet meeting scheduled for tomorrow. Moreover, the Centre hinted that it is considering a bailout for state electricity distributors that are running in losses and are unable to pay for new supplies as they sell power below cost and also lose to pilferage. Moreover, shares of power equipment manufacturer surged on report that Cabinet is expected to take up the Power ministry’s proposal to impose 21 percent duty on imported power equipments.

The sentiments also got bolstered with Auto space which after trading in the red for most part of the day, turned in the positive zone buoyed by Bajaj Auto’ decent Q1 numbers. The auto major reported in-line results for the first quarter, registering a marginal rise of 1.03% in its net profit at Rs 718.39 crore for the quarter under review as compared to Rs 711.06 crore for the same quarter in the previous year. Total income of the company has increased by 3.39% at Rs 4865.66 crore for Q1FY13 as compared Rs 4706.29 crore for the corresponding quarter previous year.

Rally in domestic benchmarks also got supported by positive European cues. European counters were showcasing firm trade despite the downbeat assessment of the US economy by Federal Reserve Chairman Ben Bernanke with no signals of an imminent move toward further quantitative easing. Though, Asian markets made a mixed closing of the day.

Back home, annual rate of inflation, based on the consumer prices index (CPI) in India, eased in the month of June to 10.02 percent as compared to 10.36 percent for the previous month of April 2012, adding to bourses vigor. Sentiments also got some boost after shares of organized retailers like Provogue (India), Shoppers Stop, Pantaloon Retail, Koutons Retail India and Trent edged higher on reports that the government is planning to persuade the chief ministers of different states to back the entry of foreign supermarket chains. However, the gains remained capped as nervousness prevailed over monsoon’s weak progress in the crucial July month moreover; investors also remained concern over the Government’s ability to push through pending reforms like diesel decontrol, reduction in fertilizer subsidy and clearance of financial sector bills.

The NSE’s 50-share broadly followed index Nifty, surged by about twenty five points to settle above the psychological 5,200 support level moreover, Bombay Stock Exchange’s Sensitive Index -Sensex-  added about eighty points to finish well above the psychological 17,150 mark. Moreover, the broader indices also recovered from session lows, and ended with a gain of about half a percent.

The overall volumes stood at over Rs 1.73 lakh crore, while the turnover for NSE F&O segment remained on the higher side as compared to that on Tuesday at over Rs 1.14 lakh crore. Moreover, the market breadth was marginally in favour of advances, as there were 1,404 shares on the gaining side against 1,374 shares on the losing side while 152 shares remained unchanged.

The BSE Sensex gained 79.71 points or 0.47% to settle at 17,185.01, while the S&P CNX Nifty rose by 23.45 points or 0.45% to close at 5,216.30.

The BSE Sensex touched a high and a low of 17,205.26 and 17,038.59 respectively. The BSE Mid cap and Small cap index ended higher by 0.53% and 0.29% respectively.

Bajaj Auto up 5.20%, Tata Power up 2.71%, Jindal Steel up 2.67%, Sterlite Inds up 2.43% and Maruti Suzuki up 2.31% were major gainers on the Sensex, while Tata Motors down 1.93%, Dr Reddys Lab down 1.85%, NTPC down 0.79%, SBI down 0.59% and Cipla down 0.56% were top losers on the index.

The top gainers on the BSE sectoral space were Metal up 1.48%, Capital Goods (CG) up 1.07%, Realty up 0.93, Auto up 0.59% and Power up 0.51%, while Oil & Gas down 0.22%, Health Care (HC) down 0.22%, Consumer Durables (CD) down 0.11% and FMCG down 0.02% were top losers on the BSE sectoral space. 

Meanwhile, Civil Aviation Ministry has expressed its consent in allowing foreign airlines to invest in domestic carriers by keeping FDI cap of 49%.The ministry pointed out that only airlines would be more interested in investing in domestic carriers than any other, while the banks expressed its non willingness to provide more money to the sector.

The Civil Aviation Minister, Ajit Singh confirmed that the process of enhancing helicopter operations and construction of helipads at various places is under pipe line and assured that the rules will be amended soon for acquisition of smaller aircraft needed for providing connectivity to smaller cities in the country. He also pointed out that, Directorate General of Civil Aviation (DGCA) and Airports Authority of India (AAI) are needed to be revamped and strengthened as environment for civil aviation had undergone a vast change in recent years in terms of technology, modernization of airports, number of aircraft and passengers.

Ministry also underlined that the ambitious project for making India as an international hub for passengers is under consideration and further, the proposal to set up a National Aviation University was also brought with the aim of creating an aviation training hub to meet the requirements of India and other countries in the region.

The S&P CNX Nifty touched a high and low 5,222.85 and 5,169.05 respectively.

The top gainers on the Nifty were Bajaj Auto up 5.32%, Tata Power up 3.34%, Sesa Goa up 2.91%, Jindal Steel and Maruti Suzuki up by 2.71%. On the flipside, PNB down 2.98%, Bank of Baroda down 1.95%, Tata Motors down 1.95%, Dr Reddy down 1.91% and Ranbaxy down 1.06% were the top losers on the index. 

The European markets were trading in green, as France's CAC 40 up 0.62%, Germany's DAX up 0.25% and United Kingdom’s FTSE 100 up 0.12%.

Most of the Asian markets went home on negative note amid gloomy outlook by U.S. Federal Reserve Chairman Ben Bernanke trumped hopes for further monetary stimulus. Meanwhile, Asian tech sector also was under pressure as top chipmaker Intel Corp reduced its growth forecast, considering feeble global economy conditions and lack of consumer interest are dampening personal computer sales. However, Chinese shares ended lower by property plays after data showing another year-on-year dip in home prices spurred profit-taking in one of this year's biggest outperformers in Asia.