Markets witness consolidation after four straight day of gains

Trade at Indian equity markets remained lackluster and range bound on Monday after a four-day rally, lacking any fresh buying interest. Traders preferred to remain on sidelines ahead of the discussion and vote on FDI in retail in parliament. Though there was round of report showing sign of manufacturing growth across the globe but market-men concerned about the political development bound to take place in next couple of days avoided building fresh position in the frontline stocks, on the other hand broader markets kept their momentum going for yet another day.

Markets made a flat start and in early trade moved higher to their intraday high but after that major indices slipped into red and remained range-bound, hardly showing any courage to break the range. There was some spurt in the market after the release of manufacturing PMI for November, which increased to five-month high. The seasonally adjusted HSBC Purchasing Managers’ Index surged to 53.7 from 52.9 in October. New orders and export sales both increased at manufacturing companies in India during November.

The global cues were somewhat sluggish; the US markets had made a flat closing on Friday, while the Asian markets despite some good economic reports from the region made a mixed closing. Japanese companies increased capital spending more than expected in September quarter, while China registered growth in manufacturing and services PMI for the month of November. The mood in the Europe too remain mixed ahead of the Euro area finance ministers meet though Greece offered to spend 10 billion euro buying back bonds.

Back home it seemed that markets are going through a short term consolidation phase before continuing their upward movement later this month. If the FDI in retail vote goes over successfully, market participants will gain confidence that reform measures are indeed getting through the Parliament. There was cautiousness with no major buying from any front. High beta realty index surged again, gaining over 1 percent, while metal, power and consumer durables too showed their strength and were up by over half a percent. On the same time, rate sensitive banking sector along with defensive sector FMCG witnessed some selling pressure. The good manufacturing numbers dampened the hopes that RBI will be going for any rate cut soon. Auto sector though gained marginally but there was mixed reaction based on the November sales performance. One non sectoral gauge, cement, kept buzzing since morning and ended with good gains on buzz of good sales and dispatch numbers for November amid report that UltraTech Cement is in talks to buy stakes in Jaypee Group's cement business. Aviation sector too was in lime light on reports that will soon seek regulatory approval to tweak its ownership pattern to facilitate a stake sale to Etihad Airways and Kalanithi Maran, the major promoter of SpiceJet, has decided to increase his stake by five per cent in the company. Both the stocks were up by over 5% for the day.

Finally, the BSE Sensex lost 34.58 points or 0.18% to settle at 19,305.32, while the S&P CNX Nifty declined by 8.90 points or 0.15% to end at 5,870.95.

The BSE Sensex touched a high and a low of 19,416.45 and 19,257.30, respectively. The BSE Mid-cap index was up by 1.21% and Small-cap index gained 0.86%.

BHEL up 1.59%, SBI up 1.53%, Tata Steel up 1.36%, Reliance up 1.23% and Mahindra & Mahindra up by 1.15% were the major gainers on the Sensex, while HDFC Bank down 2.37%, Bharti Airtel down 1.76%, GAIL India down 1.06%, ONGC down 0.89% and NTPC down 0.89% were major losers on the index.

The few gainers on the BSE sectoral space were Realty up 1.35%, Metal up 0.80%, Power up 0.65%, Consumer Durables (CD) up 0.55% and Oil & Gas up 0.47%, while Bankex down 0.40%, FMCG down 0.34% and TECk down 0.14% were top losers on the BSE sectoral space.

Meanwhile, the Union Cabinet is likely to decide on the proposal to set up a National Investment Board (NIB) this week that would focus on decisions of approval/clearances of projects with investment of Rs 1,000 crore and above. This development comes at a time when the World Bank, in its report ‘Doing Business 2013’, has ranked India 132 in the list of 185 countries. In its report, India is placed far behind then other low economy developing countries.

The proposal is high on the agenda of the government, it is expected that the Cabinet in its next meeting may take a call on this.  The proposed body will be a Cabinet Committee with the Prime Minister as the Chairman. Currently, many large projects, particularly those related to infrastructure in public and private sectors, have been held up on account of inordinate delays in obtaining necessary approvals from various Central Ministries or Departments.

With this NIB, the government aims to facilitate and ensure accelerated and time bound grant of various licenses’ permissions and approvals as the NIB mechanism will be triggered in case of the failure of the competent authorities to act in time. Further, the NIB would be an equivalent to a Cabinet Committee on Investments (CCI) and it will not in any way be a substitute to the existing Foreign Investment Promotion Board (FIPB).

Moreover, all the powers of CCI then would be transferred to the Cabinet Committee on Economic Affairs (CCEA) except for those projects notified under the proposed NIB. Further, the final name for the proposed mechanism has been left to the Cabinet to decide.

The S&P CNX Nifty touched a high and a low of 5,899.15 and 5,854.60 respectively.

The top gainers on the Nifty were ACC up 3.87%, Ultra Cement up 3.01%, SBI up 1.83%, Reliance up 1.68% and JP Associates up by 1.51%.

The top losers on the index were HDFC Bank down 2.44%, IDFC down 2.28%, Bharti Airtel down 1.82%, GAIL down 1.49% and ONGC down 1.28%.

European markets were trading in green. France’s CAC 40 up 0.56%, Germany’s DAX up 0.45% and Britain’s FTSE 100 was up by 0.22%.

Asian markets ended mixed on Monday as further indications of a stabilizing Chinese economy with positive manufacturing data improved investor sentiments, but gains were capped by concerns that an impasse in US budget talks could tip the world's largest economy into recession. While, Chinese market were dragged down by the sharp plunge in consumer-staple companies. Chinese market led the decliners, as investors were worried about the lack of policies from Beijing to boost the economy. Though, it is being said that China may maintain its annual economic growth target at 7.5 percent next year as the new leadership headed by Xi Jinping might not bear a further slowdown. Japan's Nikkei ended higher, moderating after heavy gain in November.