Benchmarks manage to keep their head above water on Wednesday

Key domestic benchmarks witnessed consolidation with both the frontline indices managed to keep their head tad above water on Wednesday. Buying which emerged in second half, largely on the back of short-covering in oil and gas and realty sectors, mainly acted as saving grace for domestic equity markets and helped them to hold crucial 5,900 (Nifty) and 19,550 (Sensex) levels. Earlier, markets made a negative start tailing weak global cues, but sentiments got some strength and turned positive after India’s HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies, came at 53.6 in May, up from 50.7 in April. Indian services activity, which make up nearly 60% of country’ economics output, expanded in May at its fastest pace since February as burgeoning new orders drove optimism to a five-month high. 

Some support also came in from Chief economic advisor Raghuram Rajan’s statement that despite the disappointing GDP growth there was enough in the details to give hope that economy will look up. He expressed hopes on good rabi crop that will come to market in the first quarter, higher government spending and strong finance, real estate and insurance sector.

However, global cues remained somber as European counters traded lower in early deals after lackluster manufacturing data from the US and China stoked growth concerns in the world’s two largest economies. In China, the final version of HSBC’s purchasing managers’ index fell to 49.2 from a preliminary reading of 49.6, suggesting the manufacturing sector is slowing down. Meanwhile, all the Asian equity indices shut shop in red.

Back home, buying in oil and gas counter, largely supported by ONGC and Reliance Industries, also lifted the sentiments. Significant bounce back in Realty pivotal too helped the benchmarks to end higher. Shares of fertilizer companies like National Fertilizers, Chambal Fertilisers, Rashtriya Chemicals and Fertilisers, Tata Chemicals and Coromadel International edged higher on reports that a group of ministers will meet on June 5, 2013, to discuss a new urea pricing policy for existing producers of the fertilizers. Just Dial, the new listing too got good response from traders and ended with a premium of over 15 per cent. However, the gains remain capped as shares of cement companies like ACC, Ambuja Cement, Ultratech Cement and India Cements remained under pressure on concerns over slowdown in demand following the onset of monsoon rains.

The NSE’s 50-share broadly followed index Nifty rose by about five points to hold its psychological 5,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex gained by over twenty points to hold its crucial 19,550 mark. Moreover, broader markets too traded in-line with benchmarks and snapped the session slightly in green.

The overall volumes stood above Rs 1.42 lakh crore, which remained on the higher side as compared to that on Tuesday. The market breadth remained in favor of declines as there were 1,083 shares on the gaining side against 1,256 shares on the losing side while 149 shares remain unchanged.

Finally, the BSE Sensex gained 22.44 points or 0.11% to settle at 19,568.22, while the CNX Nifty rose by 4.40 points or 0.07% to end at 5,923.85.

The BSE Sensex touched a high and a low of 19,604.43 and 19,441.35, respectively. The BSE Mid cap index up by 0.06% and Small cap index was up by 0.12%.

The top gainers on the Sensex were, RIL up by 2.56%, ONGC up by 1.95%, Sun Pharma up 1.91%, Hindalco up 1.34% and Maruti Suzuki up by 1.28%, while Wipro down by 1.59%, Infosys down 1.32%, HDFC down 1.23%, ITC down 0.93% and Bharti Airtel down by 0.69% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Oil & Gas up 1.77%, Realty up 1.35%, Metal up 0.40%, PSU up 0.33% and Capital Goods up 0.31%, while IT down 0.76%, TECk down 0.59%, FMCG down 0.50% and Consumer Durables down 0.45% were the top losers on the sectoral space.

Meanwhile, with an aim to provide a uniform regulatory environment to the real estate sector, the government has approved the real estate bill to set up a regulator for the sector. The law will cover any developer coming up with a project of 1,000 sq metres and above. The bill has various provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly.

The bill also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. Further, relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction. The bill also makes it mandatory for builders to clarify the carpet area of the flat, which would be made uniform for the entire country.

The proposed real estate bill includes tough provisions to deter builders from using pictures of housing projects in foreign countries to lure buyers while advertising a project. They will have to use pictures reflecting the actual project, which will be delivered to home buyers. The developers will have to maintain a separate bank account for a particular project, and will not be allowed to divert the money for other projects. Failure to compliance for the first time would attract a penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail up to three years.

The regulator will act only if there is a complaint of any deviation from the project details disclosed by a developer. Further, the bill also prohibits developers from collecting any money from buyers before completing all necessary permits to start construction on the project.

The CNX Nifty touched a high and low of 5,935.20 and 5,883.70 respectively. 

The top gainers on the Nifty were Reliance up by 2.79%, DLF up 2.67%, ONGC up 1.82%, Hindalco up 1.78% and Sun Pharma up by 1.69%.

On the flip side, the top losers of the index were, Ambuja Cement down 1.72%, Infosys down 1.32%, HDFC down 1.31%, ACC down 1.24% and HCL Tech down by 1.06%.

The European markets were trading in red, France’s CAC 40 down by 1.30%, Germany’s DAX down by 1.37% and the United Kingdom’s FTSE 100 down by 1.55%.

Asian stocks markets ended lower, led by Japan’s Nikkei, which went home with huge losses after Prime Minister Shinzo Abe outlined his economic growth strategy. Hong Kong market closed lower after touching their lowest in six weeks on Wednesday. Mainland Chinese markets also ended weak after comments from US Federal Reserve officials fanned fresh worries about the duration of its stimulus programme. Shares in Taiwan went home with red mark as investors remained cautious by the Legislative Yuan's failure to pass an amendment to the capital gains tax on stock investments on May 31, the final day of the Legislature's spring session.