Benchmarks end flat; IIP, WPI data eyed

Recovering from their day’s low Indian markets ended the volatile session flat on Monday led by a rally in public sector banks on hopes that legislation on banking sector reforms would be passed during the current session of parliament. Bourses, throughout the session, traded in the tight band, with crucial levels of 19,400 (Sensex) and 5,900 (Nifty) proving tough nuts to crack, as market participants closely awaited October’s index of industrial production (IIP) data and headline inflation data for November, scheduled to be released later this week on December 12 and 14, respectively, as these will influence the RBI’s stance on policy rates.

Bringing some respite to the economy, Goldman Sachs said that India’s GDP may exceed all expectations next year as there are signs that policymakers might spring up positive surprises. Confidence of the market participants also remained higher after realty stocks extended recent gains as investors bet that retail real estate will get a boost from the entry of foreign supermarket chains in the country. Also, associate banks of State Bank of India gained by 15-20 per cent on fresh buying accompanied by heavy rise in volume. However, key benchmark indices edged lower in noon trade as Rajya Sabha was adjourned due to uproar following news reports on Walmart lobbying for its entry into India. The sentiments also got dampened after auto sector lost its shine on SIAM’s report that domestic car sales fell by 8.25 per cent to 1,58,257 units in November this year compared to 1,72,493 units in the same month last year.

Global cues remained mixed as most of the Asian equity indices ended the session in the green on better-than-estimated US jobs data and China’s factory output and retail sales signaling a faster economic recovery. China’s industrial production climbed 10.1 per cent in November from a year earlier. However, European stocks fell from an 18-month high as Italian Prime Minister Mario Monti said during the week-end that he intended to resign early and a delayed Greek bond buyback reignited concerns about the debt crisis.

Back home, the banking stocks showed last hour surge as banks, following the go-ahead by the Reserve Bank of India (RBI), have begun restructuring the loans given to iron ore miners and other stakeholders such as truckers and shipping lines. However, software pack declined over a per cent as stock of the country’s largest IT services company TCS declined by about two and a half per cent extending its past four-days fall on fears of lower revenue growth in next year. Shares of sugar manufacturing companies too remained under pressure during the day’s trade on reports that Uttar Pradesh (UP) has increased State Advised Price (SAP) for sugarcane procurement by more than 15% to Rs 275-290 a quintal for 2012-13 compared to last year. SAP is the price below which mills cannot buy cane from farmers.

The NSE’s 50-share broadly followed index Nifty, rose by one and a half points to hold its psychological 5,900 support level however, Bombay Stock Exchange’s Sensitive Index - Sensex declined marginally by about fifteen points to finish tad above the psychological 18,400 mark. However, the broader markets traded with traction through the session outperforming benchmarks and ended the trade with a gain of about half a percent. The market breadth remained in favor of advances as there were 1,536 shares on the gaining side against 1,406 shares on the losing side while 117 shares remain unchanged.

Finally, the BSE Sensex lost 14.41 points or 0.07% to settle at 19,409.69, while the S&P CNX Nifty gained by 1.50 points or 0.03% to end at 5,908.90.

The BSE Sensex touched a high and a low of 19,478.01 and 19,362.32, respectively. The BSE Mid-cap index was up by 0.65% and Small-cap index was up by 0.32%.

HDFC up 3.15%, Dr Reddy Lab up by 2.51%, Cipla up 1.73%, Tata Steel up 1.35% and Sun Pharma up by 1.10% were the major gainers on the Sensex, while TCS down 2.50%, NTPC down 1.91%, Bharti Airtel down 1.46%, Maruti Suzuki down 1.13% and Mahindra & Mahindra down by 0.90% were major losers on the index.

The top gainers on the BSE sectoral space were Realty Index up 1.10%, Healthcare up by 0.89%, Bankex up by 0.31, FMCG up by 0.24 and PSU Index up 0.19%, while Consumer Durables (CD) down 1.52%, TECk down 0.90%, IT down 0.89%, Oil & Gas down 0.72% and Capital Goods down 0.33% were major losers on the BSE sectoral space.

Confident of achieving the disinvestment target of Rs 30,000 crore for the current financial year, Union Revenue Secretary, Sumit Bose said, the government was positive enough to meet its disinvestment target for the year 2012-13, against previous year’s Rs 40,000 crore. The government has so far identified 10 companies where it plans to offload its stake.

The government recently raised some Rs 807.02 crore by divesting a 5.58 per cent stake in Hindustan Copper through an offer for sale (OFS). The government’s shareholding in the company before the OFS was at a high 99 per cent. Further, the government disinvested 10 percent of NBCC out of its shareholding and realized an amount of Rs 124.97 crore.

The government had set a target of mopping up close to Rs 30,000 crore through equity stake sales in companies including Oil India, SAIL, Hindustan Aeronautics, Nalco, RINL, BHEL, MMTC and NMDC. So far, the government has managed to garner only around Rs 14,000 crore as against the disinvestment target of Rs 40,000 crore in 2011-12.

The S&P CNX Nifty touched a high and a low of 5,919.95 and 5,888.10 respectively.

The top gainers on the Nifty were Bank of Baroda up 4.11%, HDFC up 3.71%, Dr Reddy up 3.02%, PNB up 2.35% and Reliance Infra up by 2.04%.

The top losers on the index were TCS down 1.99%, Cairn India down 1.88%, NTPC down 1.85%, Bharti Airtel down 1.52% and IDFC down by 1.45%.

European markets were trading in red. France’s CAC 40 down 0.75%, Germany’s DAX down 0.61% and Britain’s FTSE 100 was down by 0.30%.

Asian markets snapped the session mostly in green on Monday, buoyed by the Chinese optimism after data of industrial production as well as retail sales from the country suggested recovery in the global economy. However, China’s exports rose less than forecast in November. The customs administration reported that overseas shipments increased 2.9 percent from a year earlier and imports were unchanged. Meanwhile, Japanese market just managed a positive close despite the revised government data showing that GDP shrank 0.9 percent in July-September from the previous quarter. GDP contracted an annualized 3.5 percent in the three months period. The government revised down the previous quarter's figure to a 0.1 percent contraction, technically putting the country into recession.