Benchmarks end on quiet note ahead of RBI’s third-quarter policy review

The January series F&O contract expiry week got off to a quiet start as the benchmark equity indices, after witnessing rally of about a percentage point in previous session, snapped the volatile day of trade on an absolute flat note on Monday as investors remained on sidelines ahead of the Reserve Bank of India’s (RBI) third-quarter policy review on January 29. Though, markets opened on an optimistic note with both the frontline indices hitting their highest level in more than two years supported by buying in rate sensitive counters amid hopes that that the central bank will cut interest rates to boost growth into Asia’s third-biggest economy. Some strength came in from FICCI’s prediction that the economy will grow by 6.7 per cent for 2013-14. The chamber has revised its growth forecast upwards from 6.5 percent to 6.7 percent for the next fiscal.

Supportive cues from US markets provided the much needed support to local markets in first half. Investors’ morale got buttressed on the back of robust US earnings in the fourth quarter coupled with rise in Germany’s business confidence flaring hopes that Europe’s largest economy is gathering momentum after contracting late last year. Moreover, most of the Asian counters too ended in the green on Monday. However, weakness in European market took their toll on domestic sentiments in second half and dragged the frontline gauges below their pre-close level. Investors mainly resorted to profit booking following the decline in European markets.

Back home, some cautiousness also came in from currency markets as Indian rupee depreciated by 21 paise to 53.88 against the dollar in early noon trade on the Interbank Foreign Exchange on fresh demand for the US currency. Some pressure was also witnessed in the oil and gas sector stocks despite the Union Minister for Petroleum and Natural Gas M Veerappa Moily saying that his ministry will soon bring in a Uniform Gas Price Policy. But, recovery was seen in the last leg of trade as up-move in metal counters boosted investors confidence as stocks like JSW Steel, SAIL, Sterlite Industries, National Aluminium Company and Hindalco all edged higher as manufacturing surveys out from China, Europe and the US on January 24, 2013 pointed to an improvement in the global economy.

Rally in Railways shares too aided the sentiments as Kernex Microsystems (India), Titagarh Wagons, Kalindee Rail Nirman (Engineers) and Stone India all edged higher after Railway Ministry constituted a committee to study and suggest revision of tariff and menu of standard meals in premier and other mail and Express trains. The software and technology stocks too traded with traction as the rupee turned weak against dollar owing to the month end dollar demand from the importers. Shares of companies engaged in delivering education on information technology platform too remained on buyers’ radar. Everonn Education, Educomp Solutions, NIIT and Aptech all traded jubilantly during the trade on the back of huge volumes.

The NSE’s 50-share broadly followed index Nifty gained by tad 0.15 point to end above its psychological 6,050 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex dipped by just 0.18 point but, hold its psychological 20,100 mark. Moreover, the broader markets too traded in the positive and managed to keep their head above water.

The overall volumes stood at over Rs 1.87 lakh crore, which remained on the lower side as compared to that on Friday. The market breadth remained in favor of advances as there were 1,213 shares on the gaining side against 992 shares on the losing side while 767 shares remain unchanged.

Finally, the BSE Sensex lost 0.18 points to settle at 20,103.35, while the S&P CNX Nifty rose by 0.15 points to end at 6,074.80.

The BSE Sensex touched a high and a low of 20,172.45 and 20,062.79, respectively. The BSE Mid cap index up by 0.02% and Small cap index was up by 0.27%.

The top gainers on the Sensex were, Tata Motors up by 2.49%, Hero MotoCorp up by 1.84%, Hindalco up by 1.72%, Sterlite Industries up by 1.60% and ICICI Bank up by 1.52%, while ONGC down by 1.76%, Reliance down by 1.56%, Hindustan Unilever down by 0.98%, NTPC down 0.97% and SBI down by 0.92% were the top losers on the index.

The top gainers on the BSE Sectoral space were Realty up by 1.84%, Auto up 1.03%, Bankex up 0.68%, IT up 0.44% and Metal up 0.28%, while Oil & Gas down 1.14%, Consumer Durables (CD) down 0.91%, Capital Goods (CG) down 0.65%, Power down 0.52% and PSU down 0.46% were top losers on the sectoral space.

Meanwhile, to ensure parity in the price of imported and locally-produced gas, the Union Ministry of Petroleum and Natural Gas will soon bring in a Uniform Gas Price Policy. The Union Minister for Petroleum and Natural Gas M Veerappa Moily said 'I have worked out the policy, but don't know whether it has to go to the Cabinet or not. The proposed policy will ensure one price for gas that is imported and that is produced here as imported gas currently costs high'.

Moily said that the gas price depends on the country from where it is imported. In Qatar it is a little less ($18), other countries it is $21, while, shale gas may work out very cheap. He pointed out that India might achieve self-sufficiency in gas by 2016-17.

On New Exploration Licensing Policy (NELP), Moily said that 40 oil and gas blocks have been approved under the NELP and the contractors, including our own PSUs, have taken them. However, defence, environment and some other departments raised some objection and wanted the No-Objection Certificate withdrawn.

Nearly $13 billion has been invested in those projects and is left to the Cabinet to decide whether or not to clear them. By adding further, Moily said that the implementation of the NELP will help us to ease out the situation in which some of the projects are facing obstacles. He said 'may be in June, two MMSCMD (metric million standard cubic metres per day) gas of ONGC will be available.   

The S&P CNX Nifty touched a high and a low of 6,088.40 and 6,061.40 respectively.

The top gainers on the Nifty were DLF up by 2.83%, Tata Motors up by 2.52%, Axis Bank up by 2.18%, Hero MotoCorp up by 2.10% and HCL Tech up by 1.84%.

The top losers of the index were Reliance Infra down by 2.37%, JP Associates down by 1.96%, ONGC down by 1.79%, Reliance down by 1.69% and Ultra Tech Cement down by 1.40%.

The European markets were trading mixed, France’s CAC 40 up by 0.09%, United Kingdom’s FTSE 100 down by 0.01% and Germany’s DAX up by 0.07%.

Most Asian markets went home with green mark, as Shanghai Composite ended with 2.4% gains on Monday after profits at major industrial enterprises rose by 5.3% in 2012 from a year earlier. Hong Kong stocks closed higher after touching a 21-month high, followed by Chinese market’s gains. However, South Korea's Kospi ended lower as foreign investors reduced their holdings, while Japan's Nikkei went home with red mark after touching a fresh 32-month high above 11,000 in the morning, boosted by a weaker yen.