Domestic bourses recoup some lost ground; Nifty re-conquers 5,600 mark

Key domestic bourses, after hitting two-month lows in previous session, recouped some of their losses on Tuesday on the back of short-covering witnessed in beaten down blue-chip stocks. Though, local benchmarks proved incapable of managing a spectacular close despite surpassing their crucial 5,650 (Nifty) and 18,800 (Sensex) levels in mid noon trade, as profit booking in last leg of trade mainly pull the benchmarks off their highs. Even though, both the frontline gauges ended the session above their crucial 5,600 (Nifty) and 18,600 (Sensex) bastions.

Soon after opening into the green terrain local benchmarks entered into the negative trajectory as selling pressure was triggered by Chinese benchmarks, slumping over 6 per cent in intra-day trade hitting their lowest since early 2009, but the downtrend proved short-lived for Indian equity markets as they regained positive terrain after Chinese markets recovered after its central bank reassured that appropriate liquidity would be maintained to support growth. Firm opening in European markets too provided required fillip to the domestic markets. 

Sentiments also got some support from Reserve Bank of India (RBI) Deputy Governor Anand Sinha’s statement that the government and the central bank are taking all possible steps to get a control over the economy; he also said that financial sector is bound to grow in tandem with the growth of the real economy. Rally in infrastructure and realty counters too helped the up-move as the RBI has said that developers building low-cost or affordable houses can avail of foreign currency loans on softer terms than other builders of real estate.

However, the gains remained capped after shares of the companies engaged in gems and jewellery business extended losses on Tuesday on rising worries that the Reserve Bank of India’s and government initiative to curb gold imports may impact growth and earnings going forward. Additionally, shares of gold finance companies tumbled on recent steep slide in gold prices in the commodities markets.

The NSE’s 50-share broadly followed index Nifty rose by about twenty points to hold its psychological 5,600 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex gained by about ninety points to finish above the psychological 18,800 mark.

However, broader markets struggled to get some traction throughout the session and ended the trade with a cut of about half a per cent. The market breadth remained in favor of declines as there were 981 shares on the gaining side against 1,313 shares on the losing side while 150 shares remain unchanged.

Finally, the BSE Sensex gained 88.26 points or 0.48% to settle at 18,629.15, while the CNX Nifty rose by 18.85 points or 0.34% to end at 5,609.10.

The BSE Sensex touched a high and a low of 18,802.31 and 18,487.30, respectively. The BSE Mid cap index down by 0.45% and Small cap index was down by 0.42%.

The top gainers on the Sensex were, Bharti Airtel up by 4.34%, ONGC up 3.80%, Mahindra & Mahindra up 3.18%, Hindalco up 2.76% and ITC up by 1.84%, while NTPC down by 2.61%, Tata Power down 2.07%, Wipro down 1.92%, SBI down 1.75% and HDFC down by 1.59% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Oil & Gas up 1.53%, Capital Goods up 0.68%, FMCG up 0.54%, Auto up 0.51% and Realty up 0.46%, while Power down 1.19%, Consumer Durables down 0.69%, Health Care down 0.55%, Metal down 0.52% and IT down 0.48% were the top losers on the sectoral space.

Meanwhile, for the purpose of seamlessly expanding companies’ operations from one special economic zone (SEZ) to other, the union government has allowed them permission to expand their operations into other zones. Now the companies can expand into another SEZ, but as a new unit and get tax benefit for the unexpired period.

Earlier, the companies use to ask permission from Board of Approval (BoA), which includes 19 members headed by the commerce secretary, if they decide to build up a unit in another zone, effectively meaning a full-fledged new application because of the ambiguity of the SEZ policy. The policy does not allowed the businesses to shift from domestic tariff areas (non SEZ) to SEZ, which baffled companies over SEZ to SEZ as well.

Hereafter, the companies are not needed to seek BoA nod and the unexpired period of tax benefits will be provided to the new units and in future companies may not even need to seek nod to expand.

The CNX Nifty touched a high and low of 5,666.25 and 5,570.25 respectively. 

The top gainers on the Nifty were Bharti Airtel up 4.43%, IndusInd Bank up 3.92%, ONGC up 3.90%, Reliance Infra up 3.66% and M&M up by 3.30%.

On the flip side, the top losers of the index were, Tata Power down 3.41%, Cairn down 3.12%, PowerGrid down 3.02%, Lupin down 2.85% and NTPC down by 2.64%.

The European markets were trading in green, France’s CAC 40 up by 1.17%, the United Kingdom’s FTSE 100 up by 0.90% and Germany’s DAX up by 1.56%.

Asian stock markets ended mostly lower as cautious investors waited to see Chinese stocks movement after Monday's sharp selloff. Though, Chinese shares recouped most of their early losses but closed lower, as concerns spread that a cash squeeze could threaten China's economic growth and take the shine off an emerging US recovery. Japan's Nikkei went home with red mark after a volatile trade on Tuesday, while Korea Composite too ended in red, falling for a fifth straight session in a row.