Benchmarks end near one and a half month high; Sensex conquers 19,500 level

Indian equity markets managed to end near one and a half month high despite a very volatile trade on Tuesday. The benchmarks started on a positive note similar to the previous session and after surging in the early trade, succumbed to profit booking in the noon, slipping into the red terrain. Though, it followed many recovery bouts that helped the benchmarks close in green with Sensex surpassing its crucial 19,500 bastion. Gains in the domestic markets came mainly on the back of positive global cues coupled with strength in FMCG names like Hindustan Unilever and ITC after Unilever Plc, the parent of Hindustan Unilever said it would make an open offer for an additional 22.52% stake in the company at Rs 600 per share. Some strength also came in after the industry body CII said that reforms in governance as well as innovation across businesses is needed to bring the slowdown-hit economy back to higher growth rate trajectory.

However, sustained profit-booking by investors in noon deals pulled benchmarks back to negative zone after the Supreme Court said that sharing information by the Central Bureau of Investigation (CBI) with the government on coal block allocation scam has shaken the entire process. But, recovery was seen in the late trade as traders got some relief after Finance Bill and demands for grants for various ministries was passed without debate after opposition walkout. Finance Minister P Chidambaram also exempted railways from payment of service tax for period between July 1, 2012 to October 1, 2012. Finance minister’s comments that tax residency certificate is enough for proof of residency also aided the sentiments.

Global cues too remained supportive as Asian stock indices ended mostly higher amid hopes of aggressive monetary policy easing by the European Central Bank and US Federal Reserve to stimulate global growth. Positive start of the European markets too added some strength to the domestic markets. European stocks opened higher amid expectations of continued growth-supportive monetary policies from the European Central Bank and the US Federal Reserve.

Back home, the up-move was also supported by the Chief Economic Advisor, Raghuram Rajan’s statement that Current Account Deficit (CAD) in the fourth quarter (Jan-March) 2012-13 would be below 4%. He also said that for the full financial year, 2013-14 it is likely to be below 5%. Meanwhile, stocks of Aviation sector viz. Jet Air India and Spicejet remained on the buyers’ radar as the civil aviation ministry allowed domestic airlines to unbundle services such as carrying check-in baggage, serving meals and allotting preferential seats, and charge separately for them.

The NSE’s 50-share broadly followed index Nifty gained by over twenty five points to end above its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by over one hundred and ten points to finish over its psychological 19,500 mark. The broader markets struggled to get some traction and ended the session mixed on Tuesday.

The market breadth remained in favour of declines as there were 1,067 shares on the gaining side against 1,271 shares on the losing side, while 144 shares remain unchanged.

Finally, the BSE Sensex gained 116.68 points or 0.60% to settle at 19,504.18, while the CNX Nifty rose by 26.10 points or 0.44% to end at 5,930.20.

The BSE Sensex touched a high and a low of 19,622.68 and 19,317.38, respectively. The BSE Mid cap index up by 0.42% and Small cap index was down by 0.31%.

The top gainers on the Sensex were, Hindustan Unilever up by 17.28%, Sterlite Industries up by 4.03%, Mahindra & Mahindra up by 2.24%, Wipro up by 1.75% and Coal India up by 1.64%, while HDFC down by 1.94%, HDFC Bank down 1.71%, Hindalco down 1.57%, L&T down 1.10% and Bajaj Auto down by 0.80% were the top losers on the index.

The top gainers on the BSE Sectoral space were FMCG up 4.65%, Metal up 0.96%, Health Care up 0.85%, TECk up 0.74% and IT up 0.65%, while Realty down 1.07%, Capital Goods down 0.47%, Consumer Durables down 0.44%, Bankex down 0.33% and Oil & Gas down 0.32% were the top losers on the sectoral space.

Meanwhile, hoping that the proposed Companies Bill, 2012 will be passed in the current session of Parliament, which also seeks to check investors and small-time depositors from being duped by enterprises or individuals, Corporate Affairs Minister Sachin Pilot said, ‘our aim right now is to salvage the situation, to see depositors get the money back and help the West Bengal government in this endeavour.’

Further, as per Pilot, there are provisions in the Companies Bill which seeks to bring transparency and compliance and prevent companies and individuals from cheating people by taking advantage of the loopholes in existing law.

Referring to the Kolkata-based Saradha multi-crore chit fund scam, the minister said that a special task force has been set up under the Serious Fraud Investigation Office (SFIO) to carry out all investigations into such companies.

The much-awaited Companies Bill 2012, which seeks to replace the more than five-decade old regulations that govern the corporate in the country, is likely to be tabled in the Rajya Sabha this week. The proposed bill envisages a slew of changes to rules governing the functioning as well as social responsibilities of corporate.

The CNX Nifty touched a high and a low of 5,962.30 and 5,867.80 respectively. 

The top gainers on the Nifty were HUL up by 17.17%, Sesa Goa up 3.09%, HCL Tech up 2.74%, M&M up 2.65% and NMDC up by 2.27%.

On the flip side, the top losers of the index were, JP Associates down by 2.60%, IDFC down by 2.45%, IndusInd Bank down by 2.24%, PNB down 1.96% and HDFC down by 1.94%.

The European markets were trading mixed, France’s CAC 40 down by 0.33%, the United Kingdom’s FTSE 100 down by 0.10% and Germany’s DAX up by 0.44%.

Asian markets ended mostly higher on Tuesday as investors’ sentiments were boosted by reports that a new government was finally formed in Italy after months of deadlock and on expectations for US Federal Reserve and the European Central Bank to continue with growth-supportive monetary stimulus measures. Japan's Nikkei, which was closed on Monday for a holiday, went home with red mark, as a stronger yen outweighed data pointing to a tentative recovery in the world's No. 3 economy.

Mainland Chinese markets remained closed for a holiday.