Benchmarks end flat on penultimate day of F&O expiry

Wednesday turned out to be a lacklustre session for Indian equity markets as investors remained on sidelines on the penultimate day of F&O expiry. Benchmark indices moved in a narrow range for the major part of the day with bouts of volatility witnessed during the trade. Sentiments also remained dampened on report that foreign institutional investors (FIIs) sold shares worth a net Rs 339.16 crore on November 26, 2013, as per provisional data from the stock exchanges. However, the losses remained capped with some respite coming in from currency front where Indian rupee traded higher on corporate dollar inflows, trading at equity markets close at 62.21/22 versus its previous close of 62.50/51.

Positive opening in European counters helped domestic markets to regain their green terrain in last leg of trade. CAC, DAX and FTSE all traded in the green in early deals with investors awaiting data on consumer confidence in the US and Germany and durable goods orders in the world’s largest economy. Recovery in Asian markets too supported the domestic markets and most of the Asian equity benchmarks ended in the positive trajectory.

Back home, some support also came in after planning panel Deputy Chairman Montek Singh Ahluwalia, exuded confidence that economy will be back on high growth trajectory and said that GDP will expand by over 6 percent next fiscal and performance will be better in second half of this fiscal. Sugar stocks too remained jubilant with scrips like Balrampur Chini, Shree Renuka Sugar, Bajaj Hindusthan, Triveni Engineering etc edging higher on report that the Food Ministry will soon seek Cabinet nod for providing interest-free loans to cash-starved sugar mills to help them meet working capital requirements.

Meanwhile, shares of public sector oil marketing companies (PSU OMCs) viz BPCL and HPCL too remained on buyers’ radar after oil secretary Vivek Rae said that a delegation from India will shortly visit Iran to discuss the oil payment mechanism. However, profit booking was witnessed in dying hour of trade which dragged the frontline gauges in the red, largely due to selling in software and technology counters, led by software services exporters Infosys and TCS which hit by a strengthening rupee, with sentiment also remaining weak due to recent selling by foreign investors.

The NSE’s 50-share broadly followed index Nifty declined by just two points to end hold its the psychological 6,050 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by around five points, but managed to hold its crucial 20,400 mark.

Moreover, broader markets too struggled through the day and ended the session mixed. The market breadth remained evenly divided, as there were 1136 shares on the gaining side against 1137 shares on the losing side, while 158 shares remained unchanged.

Finally, the BSE Sensex declined by 4.76 points or 0.02%, to settle at 20420.26, while the CNX Nifty lost 2.00 points or 0.03% to settle at 6,057.10.

The BSE Sensex touched a high and a low of 20482.67 and 20348.06, respectively. The BSE Mid cap index was up by 0.25%, while the Small cap index was down by 0.14%.

The top gainers on the Sensex were Tata Motors up 2.31%, ITC up 1.03%, ONGC up 0.98%, Coal India up 0.84%, and Dr Reddys Lab up 0.77%, on the flip side Bharti Airtel down 1.76%, NTPC down 1.41%, SBI down 1.23%, SSLT down 1.22%, and Wipro down 1.06%, were the top losers on the index.

On the BSE Sectoral front, Consumer Durables up by 1.37%, FMCG up by 1.03%, Auto up by 0.97%, Metal up by 0.38%, and Capital Goods down by 0.22%, were the top gainers, while Power down by 0.88%, Realty down by 0.77%, IT down by 0.66%, Teck down by 0.65%, and Healthcare down by 0.48%, were the top losers on the sectoral front.

Meanwhile, amid rising concerns over the increasing financial costs of the Indian sugar industry, Food Ministry will soon seek Cabinet nod for providing interest-free loans to cash-starved sugar mills to help them meet working capital requirements. The ministry's move follows a meeting of informal group of ministers, headed by Agriculture Minister Sharad Pawar last week, which discussed current issues faced by the sugar industry. Presently, lenders are cautious for giving loans to sugar mills due to their poor financial condition.

Food Secretary Sudhir Kumar has said that if banks come forward to lend the sugar industry, food ministry will pay the interest accrued on loans from the sugar development fund, which is around Rs 12,000 crore. Meanwhile, if banks lend about Rs 3,000 crore for two years to the sugar industry, interest would be about Rs 380-400 crore against the excise paid by them over the last two sugar seasons.

Domestic sugar industry is facing financial problems owing to the increase in cost of production and sharp fall in domestic sugar prices on account of surplus supplies. Recently, sugar mills in Uttar Pradesh, the country’s second largest producer region, have refused to operate due to the high cane price of Rs 280 per quintal fixed by the state for 2013-14 marketing year (October-September).  Domestic mills cannot pay more than Rs 225 per quintal. Food ministry wants to take steps soon as if the logjam continues and crushing gets delayed, it will adversely impact the sugar production in the country. Meanwhile, sugar availability in the country would be sufficient to meet the domestic demand of about 220 lakh tonnes. India’s sugar production is expected to increase at 250 lakh tonnes in the 2013-14 season (October-September) as against 245 lakh tonnes in the previous year.

The CNX Nifty touched a high and low of 6,074.00 and 6,030.30 respectively.

The top gainers on the Nifty were Tata Motors up by 2.31%, BPCL up by 1.89%, Grasim Industries up by 1.48%, UltraTech Cement up by 1.15%, and Axis Bank up by 1.06%, On the other hand, Jaiprakash Associates down by 3.05%, Power Grid Corporation of India down by 2.18%, Bharti Airtel down by 1.54%, DLF down by 1.44%, and NTPC down by 1.41%, were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.13%, Germany's DAX was up by 0.21%, and United Kingdom's FTSE 100 was up by 0.19%.

The Asian markets barring Nikkei 225 and Straits Times concluded Wednesday’s trade in green with Chinese stocks moving higher on financial reform hopes. The head of China’s central bank assured the market of more financial reforms, including free deposit rates and a more flexible currency. People’s Bank of China head Zhou Xiaochuan also stated that China will allow more foreign institutions to invest in the domestic stock and bond markets. He added that China will not ease monetary policies but will speed up reforms in liberalizing interest rates and realizing capital account convertibility. Indonesia’s president stated that the economy is expected to grow 5% year-on-year in the fourth quarter if the US Federal Reserve starts trimming its massive stimulus program, the slowest pace in more than four years. Gross domestic product (GDP) in the G20 economy expanded by 5.62% in the previous quarter. Five percent growth would be the lowest since the third quarter of 2009.

Hong Kong’s total exports’ value rose by 8.8% to $323.1 billion in October over a year earlier, compared to a year-on-year increase of 1.5% in September, the Census & Statistics Department reported. Within this total, re-exports’ value rose 9.1% to $318.7 billion, while that of domestic exports fell 7.7% to $4.5 billion. For the first 10 months of 2013, total exports’ value rose 3.8% over the same period in 2012. Industrial production in Singapore fell more-than-expected last month. The Statistics Singapore stated that Singaporean Industrial Production fell to an annual rate of 8.0%, from 9.2% in the preceding month whose figure was revised down from 9.3%.