Benchmarks snap seven days losing streak: Sensex reclaims 18,700 mark

After exhibiting seven days of continuous fall, key domestic benchmark witnessed consolidation with both the frontline indices managed to keep their head above water on Tuesday. Earlier, markets after a quiet start gained strength after Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan said that India’s Current Account Deficit (CAD) for 2012-13 is likely to be around 5 percent of the GDP. Rangarajan said CAD is likely to come down in the fourth quarter of the current fiscal, ending March 31 after touching a record high of 5.4 percent of GDP in the July-September quarter.

Some support also came in as investors opted to buy defensive stocks such as fast moving consumer goods and pharmaceuticals amid brewing concerns over lack of support to Congress-led UPA government from its key political allies. However, the gains remain capped as investors remained on the side-lines in a holiday truncated week coupled with derivative contracts expiry on March 28. Investors also opted to stay away from piling up positions in risky assets awaiting the release of key macro-economic indicators, viz. current account deficit, balance of payments and trade data, to assess the performance of the economy.

Supportive cues from European counters provided the much needed support to local markets in noon trade. European stocks regained some poise in early trade on Tuesday, with some investors buying to boost quarterly returns, but uncertainty about the broader implications of Cyprus's bailout kept a lid on any gains. Asian equities, rebounding from their choppy start, too ended mostly in the green terrain.

Back home, some support also came in from buying in software and technology stocks after the Indian rupee depreciated by 18 paise to 54.35 against the American currency during the trade on fresh demand for the greenback from banks and importers in view of firm dollar in overseas market. However, shares of select public sector undertaking (PSU) banks fell after global rating agency Moody’s downgraded its Standalone Bank Financial Strength Rating (BFSR) for three public sector banks on concerns of falling asset quality, pressure on profitability and capital generation. Additionally, Capital goods stocks extended recent losses on worries that slowdown in the economy could crimp new orders. Shares of BHEL, BEML, ABB and Siemens all edged lower during the trade.

The NSE’s 50-share broadly followed index Nifty rose by just seven points to end near the psychological 5,650 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over twenty points to finish above the psychological 18,700 mark. Moreover, broader markets too traded in line with benchmarks and ended the session slightly in the green.

The overall volumes stood above Rs 2.28 lakh crore, which remained on the higher side as compared to that on Monday. The market breadth remained in favor of declines as there were 1,290 shares on the gaining side against 1,459 shares on the losing side while 136 shares remain unchanged.

Finally, the BSE Sensex gained 23.11 points or 0.12% to settle at 18,704.53, while the CNX Nifty rose by 7.75 points or 0.14% to end at 5,641.60.

The BSE Sensex touched a high and a low of 18,758.88 and 18,612.37, respectively. The BSE Mid cap index was down by 0.11%, while the Small cap index up 0.04%.

The top gainers on the Sensex were, Bharti Airtel up by 2.98%, HDFC up 2.17%, Hindustan Unilever up 2.15%, Tata Motors up 1.72% and ITC up 1.34%, while Reliance down by 3.25%, GAIL down by 3.20%, Tata Steel down by 2.72%, Hero MotoCorp down 2.69% and L&T down by 2.24% were the top losers on the index.

The top gainers on the BSE sectoral front were, Consumer Durables up 1.59%, FMCG up 1.13%, TECk up 0.66%, IT down 0.45% and Auto up 0.35%, while Oil & Gas down by 2.06%, Realty down 1.95%, Capital Goods down 1.85%, Power down 1.05% and Metal down 0.41% were the top losers on the sectoral space.

Meanwhile, to consider the gas price pooling mechanism, Power Ministry is planning to approach Prime Minister Manmohan Singh-headed Cabinet Committee on Investments (CCI). The move is likely to prevent gas-starved power capacities becoming non-performing assets (NPAs). The ministry is also looking to take up the matter with the Cabinet panel as early as end-April.

The draft note for consultations with stakeholders would be floated shortly. The Power Ministry would take to CCI the availability versus demand for gas, current arrangements in the supply and implications of pooling for the economy and individual power producers.

At present, 33 mmscmd of domestic natural gas is supplied to the power sector. Of this, 23 mmscmd is supplied to power plants linked to the grid and another 10 mmscmd to off-grid plants. However, the Power Ministry won’t take up the pooling mechanism as a long-term mechanism. The proposals would cover 2013-14, 2014-15 and 2015-16. Further, the government is also looking to revive the proposal as additional infrastructure to import 21 mmscmd more of natural gas, is expected to be added in 2013-14.

The CNX Nifty touched a high and a low of 5,655.30 and 5,612.05 respectively. 

The top gainers on the Nifty were, Bharti Airtel up by 3.08%, HUL up 2.50%, Ranbaxy up 2.33%, Coal India up 1.68% and Tata Motors up by 1.55%.

On the flip side, the top losers of the index were, Reliance Infra down by 5.69%, Siemens down by 5.65%, Reliance down by 3.37%, Hero MotoCorp down by 2.95% and GAIL down by 2.88%.

The European markets were trading in green, France’s CAC 40 up by 0.68%, Germany’s DAX up by 0.32% and the United Kingdom’s FTSE 100 up by 0.10%.

Asian markets ended mixed on Tuesday as investors were cautious about potential future fallout from the Cyprus bailout scheme. China’s Shanghai Composite went home with red mark, weighted down by mid-sized bank’s losses on worries about tighter mortgage lending restrictions. South Korean shares bucked the downtrend and closed higher, helping to limit losses for the whole region. Japan’s Nikkei ended in negative territory despite a weaker yen, as concerns about Europe weighed.