Buying in late hour help benchmarks to keep their head above water

Key domestic benchmark witnessed consolidation with both the frontline indices finally managing to keep their head above water on Tuesday. Buying which emerged in late trade, largely supported by rally in European markets, helped the for domestic equity markets to re-conquer crucial 5,800 (Nifty) and 19,150 (Sensex) levels. Earlier, markets made a shaky start after the Cabinet Committee on Economic Affairs dropped the proposal to pool prices of imported and domestic coal to make the fuel affordable to new power plants. The frontline gauges traded in the negative terrain for most part of the day on report, that foreign direct investment (FDI) in the country declined by 19% at $1.79 billion in February.

But, there was a u-turn in late trade with both the major indices paring losses, after touching their intraday lows, supported by firm opening in European markets. Stocks in the European counters traded firmly in the early trade ahead of the release of euro-zone manufacturing output data. Though, all the Asian equity indices shut shop in the red due to disappointing Chinese Flash Chinese Purchasing Managers’ Index (PMI) data. The country’s flash HSBC PMI for April fell to 50.5 in April from 51.6 in March but was still stronger than February’s reading of 50.4.

Back home, rapid recovery in the last leg of trade transpired after PM’s economic advisory panel said improvement in performance of agriculture and manufacturing sectors is expected to push the economic growth rate to 6.4 per cent in 2013-14 from 5 per cent in the previous fiscal. Economic growth slipped to decade’s low of 5 per cent in 2012-13 mainly on account of the impact of the global financial woes.

Some strength also came in from rally in power and oil & gas sectors after the Cabinet Committee on Investment (CCI) cleared 25 exploration and production blocks out of the 31 blocks where work had been stalled on account of security restrictions. The panel also approved 13 power projects entailing investments worth Rs 33,000 crore that were stuck due to various reasons. Buying in software and technology stocks, which were butchered brutally in the past couple of sessions, too aided the sentiments. Scrip like HCL Technologies, TCS, Wipro and Infosys all edged higher on renewed buying. Additionally, shares of fertilisers companies viz. Rashtriya Chemicals & Fertilizers (RCF), National Fertilisers, Chambal Fertilisers and Chemicals, Coromandel International and Deepak Fertilisers and Petrochemicals Corporation edged higher on hopes of normal monsoon which will boost demand for fertilisers.

The NSE’s 50-share broadly followed index Nifty gained by just two and a half points to hold its psychological 5,800 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by about ten points to finish over its psychological 19,150 mark. However, the broader markets struggled throughout the session and ended mixed on Tuesday.

The market breadth remained in favour of declines as there were 1,134 shares on the gaining side against 1,227 shares on the losing side, while 131 shares remained unchanged.

Finally, the BSE Sensex gained 9.53 points or 0.05% to settle at 19179.36, while the CNX Nifty rose by 2.50 points or 0.04% to end at 5,836.90.

The BSE Sensex touched a high and a low of 19210.26 and 19042.08, respectively. The BSE Mid cap index down by 0.38% and Small cap index was up by 0.36%.

The top gainers on the Sensex were, Hero MotoCorp up by 2.87%, Sun Pharma up by 2.51%, Bajaj Auto up by 2.40%, Reliance up by 1.74% and ICICI Bank up by 1.20%, while Jindal Steel down by 3.76%, L&T down 2.04%, SBI down 1.61%, HDFC Bank down 1.41% and Tata Motors down by 1.37% were the top losers on the index.

The top gainers on the BSE Sectoral space were Health Care up 0.66%, IT up 0.64%, Oil & Gas up 0.51%, TECk up 0.36% and Auto up 0.12%, while Capital Goods down 1.29%, Consumer durables down 1.14%, Realty down 0.67%, Bankex down 0.33% and PSU down 0.32% were the top losers on the sectoral space.

Meanwhile, the National Food Security Bill (NFSB), aimed at providing legal entitlement to food to around 67 percent of the population, is likely to cost around Rs 1.23 lakh crore to the government. Finance Minister, in the budget estimates, has allocated Rs 77,740 crore as food subsidy for FY14 and kept Rs 10,000 crore over the normal food subsidy, towards the incremental cost.

Meanwhile, Food minister KV Thomas said that as per the provision of the bill, an estimated annual requirement of food-grain at 2011 population levels is 60.74 million tonnes and the corresponding estimated food subsidy at 2013-14 costs is about Rs 1,23,084 crore. However, the actual requirement would depend upon the final shape of the Bill and the time by which NFSB comes into force, he added.

The Bill was introduced in Lok Sabha in December, 2011. The standing committee on food, consumer affairs and public distribution had submitted its report on proposed bill, which was examined by the government in consultation with the states and UTs based on which the government proposes to move some amendment to it. The proposed amendments in the bill are mainly aimed at providing a simpler framework and more flexibility to the states besides lowering their financial burden.

The CNX Nifty touched a high and a low of 5,844.30 and 5,791.55 respectively. 

The top gainers on the Nifty were Bajaj Auto up by 2.93%, Hero MotoCorp up 2.66%, Sun Pharma up 2.58%, Kotak Bank up 2.14% and Grasim up by 1.76%.

On the flip side, the top losers of the index were, Jindal Steel down by 3.95%, DLF down by 1.91%, HDFC Bank down by 1.85%, SBI down 1.72% and L&T down by 1.69%.

Most of the European markets were trading in green, France’s CAC 40 up by 2.11%, the United Kingdom’s FTSE 100 up by 0.98% and Germany’s DAX up by 0.83%.

Asian markets closed in red on Tuesday on fresh data showing Chinese manufacturing activity expanded at a slower rate in April. Japan’s Nikkei ended lower on the back of profit-taking and a pick-up in the yen against dollar. Shanghai Composite closed lower, recording worst daily loss in nearly a month after a preliminary version of HSBC’s manufacturing Purchasing Managers’ Index slipped to a two-month low of 50.5 in April, compared with a final reading of 51.6 in March. Hong Kong market went home with red mark as commodity producers suffered selling.