After early rally Sensex loses direction; settles above 18,600 mark

Volatility witnessed in the second half of the trade washed away significant gains of D-street, leading to lackadaisical close of Indian equity markets despite a promising start. Even though, the barometer gauges managed to close above their psychological 5650 (Nifty) and 18,600 (Sensex) levels on the back of some value buying activities. Though, the frontline equity indices’ gains of about quarter percent appeared dismal compared to the notable gains amassed by their peers in Asian region. The domestic bourses, after the initial rally, lost their direction as investors booked their profit at higher levels.

Sentiments got some support after the country’s fourth largest software services provider HCL Technologies beating market expectations with a 78 percent rise in Q1 consolidated net profit helped by higher contract wins. Consolidated net profit rose to Rs 885 crore compared to Rs 497 crore on a year-on-year basis. However, the stock of the company ended lower with a cut of over half a percent on profit booking. Karnataka Bank too squeezed out gains of over half a percent after the Mangalore-based private sector lender’s net profit rose nearly 186 percent year-on-year to Rs 117.2 crore in the second quarter of financial year 2012-13.

Supportive cues from Asian markets provided the much needed support to local markets in first half and most of the regional peers snapped the session in the green terrain on the back of strong US earnings reports that brightened investors’ mood. European indices too galloped in the early deals on speculation that Spain was a step closer to requesting a bailout. Spanish index was up over 3 percent. Moody’s has retained Spain’s investment grade debt rating but the outlook is negative.

Back home, some amount of support came in from Aviation sector as stocks of Spicejet and Kingfisher rallied after the civil aviation ministry directed the Airports Authority of India to abolish airport development fee at Mumbai and Delhi airports. Meanwhile, Auto stocks too aided the sentiments as stocks like Maruti Suzuki, M&M, Force motors, Hero MotoCorp, Bajaj Auto and TVS Motor edged higher on expectations of higher sales during upcoming festival season. However, market gains remained capped after stocks related to sugar sector tumbled after the Ministry of Consumer Affairs, Food & Public Distribution said it has asked sugar mills to ensure the release of entire quota for the festival season. Selling in Metal shares like SAIL, Bhushan Steel, Tata Steel, Sterlite Industries and Jindal Steel & Power too dampened the sentiments.

The NSE’s 50-share broadly followed index Nifty rose by about twelve points ending above its psychological 5,650 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex surged by over thirty points to finish above the crucial 18,600 mark. The broader markets ended mixed with Small cap snapping the session up by over a quarter a percent while, mid cap index shut shop marginally in red. 

The overall volumes stood at over Rs 1.75 lakh crore, which remained on the lower side as compared to that on Tuesday. The market breadth remained in favor of declines as there were 1,334 shares on the gaining side against 1,540 shares on the losing side while 129 shares remain unchanged.

Finally, the BSE Sensex gained 33.07 points or 0.18% to settle at 18610.77, while the S&P CNX Nifty rose by 12.25 points or 0.22% to end at 5,660.25.

The BSE Sensex touched a high and a low of 18705.19 and 18535.37, respectively. The BSE Mid-cap index was down by 0.04% and Small-cap index was up by 0.30%.

Tata Power up 2.12%, HDFC up 1.22%, BHEL up 1.02%, L&T up 1.02% and Tata Motors up 0.99% were the major gainers on the Sensex. On the flip side, Gail India down 1.98%, TCS down 1.05%, Reliance down 0.97%, Sun Pharma down 0.86% and SBI down 0.64% were the major losers on the index.

The top gainers on the BSE sectoral space were Consumer Durables (CD) up 0.63%, Capital Goods up 0.60%, Auto up 0.50%, Power up 0.43% and Health Care (HC) up 0.40%, while Realty down 0.62%, Oil & Gas down 0.53%, Metal down 0.19%, IT down 0.10% and PSU down 0.04% were top losers on the BSE sectoral space.

Meanwhile, in a respite to air travelers from Mumbai and New Delhi, the Civil Aviation Minister Ajit Singh has directed Mumbai International Airport (MIAL) and Delhi International Airport (DIAL) to abolish airport development fee (ADF) at the two airports from January 1, 2013 and urged the state-run Airports Authority of India (AAI) to infuse more equity in both the joint ventures to fill the financing gap.

At present, Delhi Airport charges ADF of Rs 200 per domestic and Rs 1,300 per international passenger, while Rs 100 and Rs 600 respectively at Mumbai. The directive came after the Aviation Ministry directed AAI not to levy ADF at Chennai and Kolkata Airports, which are being modernized now. While ADF is charged to meet cash flow requirements before completion of an airport upgrade project, UDF is been charged for using the completed facility.

After taking off the ADF, the financing gap for MIAL would be about Rs 4,200 crore, while DIAL will impact by about Rs 1,175 crore. However, the ministry had directed AAI to plug-in additional equity of approximately Rs 288 crore in MIAL and Rs 102 crore in DIAL, against its 26% in the equity of both the joint ventures.

The S&P CNX Nifty touched a high and a low of 5,684.35 and 5,633.90 respectively.

The top gainers on the Nifty were Lupin up 2.93%, Tata Power up 2.06%, Cairn up 1.72%, Ranbaxy up 1.64% and L&T up 1.51%.

The top losers on the index were DLF down 3.51%, Ambuja Cement down 2.67%, GAIL down 1.96%, ACC down 1.37% and Reliance down 1.15%.

European markets were trading in green. France’s CAC 40 up 0.41%, Germany’s DAX up 0.26% and Britain’s FTSE 100 up by 0.46%.

Most of the Asian stock markets went home with a green mark on Wednesday as Moody's reaffirmed its rating on Spanish debt, which helped Australian and Hong Kong shares to touch biggest gains in almost three weeks. Investors were set to make strong positions ahead of European summit, which will be considered for further progress on the region's ongoing debt crisis. Meanwhile, South Korea's Kospi closed with modest gains, as stronger local currency helped boost airlines and builders. Shanghai Composite ended in green ahead of Thursday's growth data.