Markets snap the first session of F&O expiry week on a flat note

The Indian markets made a flat start of the F&O expiry week, trade remained range-bound throughout the session and the traders’ preferred to remain on sidelines eyeing the political developments where an all party meet was going on to break logjam in Parliament over the government’s decision to allow foreign investment (FDI) in retail. The meeting however, failed to bring any consensus with the government appealing to opposition parties to reconsider their demand for a debate under rules that stipulate voting and the latter remaining adamant. Traders were also concerned about the fiscal deficit with government facing shortfall in proceeds from share sales and mobile auction, however there was some respite from current account deficit front, as C Rangarajan, Chairman of the Prime Minister’s Economic Advisory Council said that India’s current account deficit should come down to around 3.5 per cent of the gross domestic product (GDP) by the end of this financial year.

There was not much support from the global markets too, while the Asian markets made a mixed closing, the European markets made a soft start ahead of euro-area finance ministers meet for a third time this month on Greece’s finances. Euro-area finance ministers will meet in Brussels to try to clear an aid payment to Greece and produce a plan to keep the country a solvent member of the currency bloc after they failed to make the decisions in two previous meetings this month.

Back home, the domestic markets traded in a tight range, at some instances there were bouts of selling but the major indices managed to hold the psychological levels of 18,500 (Sensex) and 5,600 (Nifty). The day was for the broader markets that kept outperforming the benchmarks from the initial trade and managed a decent close at the end. PSU sector was the major drag of the day as Hindustan Copper shares plunged by 20% to hit its lower circuit limit for the second consecutive day after the government sold 5.58% of its stake in the company at an average price of Rs 156.56 apiece, much lower than its market price. On the same time, the Aviation sector kept flying high on stake sale buzz, it was reported that different Indian carriers are in talks with carriers based in the Middle East and Southeast Asia and sale of stakes could happen soon. Aviation major Jet Airways surged by 11%, while Spice Jet zoomed by 13%. Kingfisher Airlines too touched its upper circuit limit of 5% by the end.

Bombay Stock Exchange’s Sensitive Index, Sensex gained 30 points to finish 18,537 level. Broader markets remained in jubilant mood and outperformed benchmarks with quiet a margin. While the market breadth remained comfortably in favor of advances as there were 1,577 shares on the gaining side against 1,233 shares on the losing side while 142 shares remain unchanged. The NSE’s 50-share broadly followed index Nifty gained 9 points to close at 5,636 level.

Finally, the BSE Sensex gained 30.44 points or 0.16% to settle at 18,537.01, while the S&P CNX Nifty rose by 9.30 points or 0.17% to end at 5,635.90.

The BSE Sensex touched a high and a low of 18,590.33 and 18,508.79, respectively. The BSE Mid-cap index was up by 1.00% and Small-cap index was up by 0.85%.

Wipro up 2.50%, Sterlite up 2.23%, Tata Steel up 1.96%, Infosys up 1.71% and Bharti Airtel up by 1.62% were the major gainers on the Sensex. On the flip side, Mahindra & Mahindra down 3.37%, Sun Pharma down 1.72%, BHEL down 1.40%, HDFC Bank down 1.07% and Gail India down by 0.81% were the major losers on the index.

The few gainers on the BSE sectoral space were TECk up 1.35%, IT up 1.24%, Consumer Durables (CD) up 1.20%, Metal up 0.98% and Health Care (HC) up 0.71%. While, PSU down 0.54%, Bankex down 0.30%, Auto down 0.30% and Oil & Gas down 0.24% were major losers on the BSE sectoral space.

Meanwhile, underscoring some consolidation in the banking system was inevitable, Finance Minister P Chidambaram stressed on the needs of the country having two or three world size banks. ‘We must create at least two-three world-size banks, even China has done it,’ Chidambaram reported. He reasoned new business models will inevitably lead to some consolidation. However, he opined that even though consolidation takes place among top banks, there will be enough space for local area banks.

Further, regretting the idea of the local area bank which started in 1996 being stopped after first three licences were given, Finance Minister pointed that there is place for a local area bank for serving people of the region, local area. However, while addressing bankers’ conference BanCon 2012, Chidambaram said, there is space for local banks, though some may have to let go their identities.

Furthermore, the Finance Minister also reiterated the demand of Reserve Bank of India speeding up the procedure of finalizing new guidelines for issuing new banking licences, which started a year ago and start accepting applications as early as possible. 

The S&P CNX Nifty touched a high and a low of 5,649.20 and 5,623.45 respectively.

The top gainers on the Nifty were IDFC up 2.38%, Wipro up 2.36%, Bharti Airtel up 1.75%, Tata Steel up 1.70% and Hindalco up by 1.62%.

The top losers on the index were M&M down 3.41%, BPCL down 1.90%, BHEL down 1.74%, Sun Pharma down 1.67% and HDFC Bank down by 1.34%.

European markets were trading in red. France’s CAC 40 down 0.64%, Germany’s DAX down 0.23% and Britain’s FTSE 100 was down by 0.41%.

Asian markets ended mixed on Monday in cautious trading session ahead of another meeting of euro-zone finance ministers. Japan’s Nikkei went home with positive mark as Bank of Japan released its monetary policy minutes which showed the board still largely favors further easing. Hang Seng and Shanghai Composite both closed relatively flat in negative territory. South Korea's Kospi Composite ended lower, weighted down by Samsung Electronics, which was down 0.2%.