Benchmarks witness consolidation post six consecutive sessions of downfall

D-street witnessed consolidation post six consecutive sessions of downfall as investors stayed on the sidelines awaiting political developments before making any move as the Winter Session of Parliament kicks off from Nov 22. Congress-led United Progressive Alliance (UPA) government could face its toughest challenge in Parliament during the winter session as the opposition parties is prepared to oppose FDI in retail and corruption-related issues. Mamata Banerjee’s Trinamool Congress may go for no-confidence motion against the UPA government as the session begins. Meanwhile, the Cabinet is also likely to propose setting up of the National Investment Board for expediting clearance to large projects. The psychological 5,550 (Nifty) and 18,300 (Sensex) levels proved as stern support for Indian equity markets. The key gauges displayed listless performance through the day as the aimless benchmarks appeared exhausted and showed only sideways kind of movement in a tight band.

Jitters were also witnessed at D-street after reports suggested that amendments to the controversial law against tax avoidance through foreign investments, ‘GAAR’, were been finalized, which after going through Prime Minister Office (PMO) will be reflected in the amended Chapter 10A. Markets, however, in the late trade, witnessed a soothing recovery on the back of appreciation in Indian rupee. Rupee came below 55/$ mark on fresh selling of the American currency by banks amid persistent capital inflows into the equity market.

Positive global cues too supported the domestic bourses as European stocks traded firmly in the early deals with investors’ sentiment remained upbeat after progress in the fiscal-cliff situation negotiations in the US over the weekend while, most of the Asian markets ended on a positive note on Monday as investors were encouraged by an improving outlook for talks to resolve an imminent fiscal crunch in the United States. US lawmakers expressed confidence on Sunday that they could reach a deal to avert the $600 billion fiscal cliff, which threatened to send the giant economy back into recession.

Back home, some amount of support came in from Auto space as stocks like Bajaj Auto, Maruti Suzuki and M&M witnessed traction on hopes that the demand pick up during the festival sales would boost sales growth during the current month. Telecom stocks like Bharti Airtel and Reliance Communication too supported the sentiments, extending recent gains after the 2G mobile phone spectrum auction received poor response. However, Public sector oil marketing companies like BPCL, HPCL and IOC continued to drag markets lower after the oil ministry said that under-recovery on high speed diesel applicable for second fortnight of November effective November 16, 2012 remains high. Sentiments also remain dampened after metal stocks declined as LMEX, a gauge of six metals traded on the London Metal Exchange dropped 0.62% on November 16, 2012. Metal stocks viz. Sterlite Industries, JSW Steel, Tata Steel, Sail, Hindalco Industries and Hindustan Zinc all edged lower.

The NSE’s 50-share broadly followed index Nifty declined by just over two points to hold its psychological 5,600 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex rose by about thirty points to finish comfortably above the crucial 18,300 mark. However, broader markets butchered badly during the session and ended with a cut of about a percentage point. The market breadth remained in favor of declines as there were 1,061 shares on the gaining side against 1,761 shares on the losing side while 141 shares remain unchanged.

Finally, the BSE Sensex rose 29.63 points or 0.16% to settle at 18,339.00, while the S&P CNX Nifty lost 2.65 points or 0.05% to end at 5,571.40.

The BSE Sensex touched a high and a low of 18,386.78 and 18,256.07, respectively. The BSE Mid-cap index was down by 0.89% and Small-cap index was down by 0.85%.

Maruti Suzuki up 3.87%, Bharti Airtel up 2.89%, ITC up 2.70%, Bajaj Auto up 2.23% and Mahindra & Mahindra up by 1.60% were the major gainers on the Sensex. On the flip side, Tata Power down 2.52%, TCS down 1.90%, Tata Steel down 1.61%, HDFC down 1.23% and L&T down by 1.22% were the major losers on the index.

The few gainers on the BSE sectoral space were Auto up 1.04%, FMCG up 0.87%, TECk up 0.06% and Realty up 0.02%. While, Consumer Durables (CD) down 1.14%, Capital Goods (CG) down 0.83%, Health Care (HC) down 0.75%, Metal down 0.67% and PSU down 0.36% were major losers on the BSE sectoral space.

Meanwhile, according to Federation of Indian Chambers of Commerce and Industry (FICCI), if overseas investment is permitted, India’s organized retail industry is expected to become a $1.3 trillion opportunity by 2020, led by an estimated 25% average annual growth. With the current market size estimated at $500 billion, this translates to an additional $800 billion in the next eight years, R V Kanoria, President of FICCI said.

The central government recently took a decision to allow up to 51 percent foreign direct investment (FDI) in multi-brand retail and to raise the limit for overseas investment in single-brand retail to 100 percent. Further, country's traditional retail industry is expected a growth at an average annual rate of five percent over the next year, since almost 94 percent of India's retail industry is under unorganized or traditional whereas, the organized retail is expected to clock-in a growth rate of almost 25% in this period.

Further, to gauge the immediate concerns of the industry, FICCI organized an interactive meeting with different stakeholders of retail industry like representatives of small Kirana stores, farmers and consumers and suggested that FDI would help improve back-end infrastructure and reduce wastage, especially of fruits and vegetables.

The S&P CNX Nifty touched a high and a low of 5,592.75 and 5,549.25 respectively.

The top gainers on the Nifty were Maruti Suzuki up 4.05%, Bharti Airtel up 3.19%, ITC up 2.64%, Bajaj Auto up 2.01% and Hero MotoCorp up by 1.75%.

The top losers on the index were IDFC down 3.07%, Lupin down 2.60%, JP Associates down 2.14%, Tata Power down 2.12% and TCS down by 1.83%.

European markets were trading with traction. France’s CAC 40 up 1.63%, Germany’s DAX up 1.62% and Britain’s FTSE 100 was up by 1.19%.

Most Asian markets went home with green mark on Monday as investors were hopeful that US lawmakers will be able to agree a deal to avert a fiscal cliff. Japan’s Nikkei touched two-month high due to sustained weakness in the yen. Moreover, Shanghai Composite market closed in positive territory ahead of preliminary manufacturing data November.