Benchmarks make a flat closing after hitting all-time highs

Indian equity benchmarks ended Tuesday’s session on flat note due to profit booking seen at higher levels in late trades, after the domestic bourses hit fresh all-time highs in intra-day trade. Sentiments remained up-beat since beginning with key bourses opening with a huge gap on the up-side  and frontline gauges scaling past their crucial 22,000 (Sensex) and 6,550 (Nifty) bastions, as sentiments remained jubilant after the investment banker Goldman Sachs upgraded Indian equities to “overweight” from “market-weight” and raised its target on Nifty to 7,600, citing reduced external vulnerabilities, including a narrowing current account deficit, and potential for gains ahead of elections that conclude in May.

Supportive cues from US and Asian markets too provided some support to local bourses and sentiments remained up-beat as investors breathed easy with ebbing Ukraine concerns over the situation in Crimea even as the region voted in favor of quitting Ukraine. However, disappointing cues from European market took their toll on domestic sentiments in late trade and dragged the frontline gauges below the psychological 6,550 (Nifty) and 21,850 (Sensex) levels. Investors mainly resorted to profit booking following the decline in European markets.

Back home, Indian rupee too pared most of its initial gains and was trading at 61.07/08 versus its previous close of 61.19/20, but off its session high of 60.88, on demand for the dollar from oil refiners. Meanwhile, shares of software and technologies like Infosys and TCS ended lower on the back of an appreciating rupee as they earn most of their revenues from exports to the US. Additionally realty stocks viz. Godrej Properties, Prestige Estates Projects, DLF and Unitech all reversed intraday gains in choppy trade.

However, domestic benchmarks managed to keep their head above water as some support came from report that foreign institutional investors (FIIs) bought shares worth a net Rs 982.19 crore on Friday, as per provisional data from the stock exchanges. Buying in pharma stocks too supported the sentiments on report that the foreign direct investments in the sector has more than doubled to $1.26 billion during the April-December period of 2013-14 fiscal amid concerns over increasing acquisitions of domestic firms by multinationals. Shares of banking space too remained on buyers’ radar after the Wholesale Price Index (WPI) based inflation moderated for the third straight month and is likely to increase the clamour for the Reserve Bank of India (RBI) to cut interest rates in its next monetary policy.

The NSE’s 50-share broadly followed index Nifty rose by over ten points to end above its psychological 6,500 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over twenty points to end near the psychological 21,800 mark. Broader markets traded with traction and ended the session with a gain of around a percentage point. The market breadth remained in favour of advances, as there were 1,548 shares on the gaining side against 1,254 shares on the losing side, while 174 shares remained unchanged.

Finally, the BSE Sensex added 22.81 points or 0.10%, to settle at 21832.61, while the CNX Nifty was up by 12.45 points or 0.19% to settle at 6,516.65.

The BSE Sensex touched a high and a low of 22040.72 and 21785.38, respectively. The BSE Mid cap index was up by 0.95%, while the Small cap index gained 0.97%.

The top gainers on the Sensex were Maruti Suzuki up by 7.58%, SBI up by 2.72%, ITC up by 2.56%, Coal India up by 2.48% and RIL up by 1.04%, while Tata Motors down by 3.03%, Mahindra & Mahindra down by 1.51%, Wipro down by 1.23%, Infosys down by 1.19% and L&T down 1.17% were the top losers in the index.

On the BSE Sectoral front, FMCG up by 1.84%, PSU up by 1.35%, Power up by 1.27%, Consumer Durables up by 0.89% and Oil & Gas up by 0.87% were the top gainers, while IT down 0.82%, Realty down by 0.52%, Teck down by 0.47%, Capital Goods down by 0.35% and Auto down by 0.17% were the top losers in the space.

Meanwhile, the government has hiked the import tariff value of gold to $445 per 10 grams from $433, in line with global rates of the precious metals. Tariff value or the base price is set to determine the customs duty on the precious metals and to prevent under invoicing. However, the import tariff value of silver has been reduced to $694 per kg from $699 per kg earlier.

Gold is the second largest import item for India after crude oil. The government had taken various measures like high customs duty of 10% and 80/20 rule to curb gold shipments to check country’s widening current account deficit (CAD). Meanwhile, the government’s measures to contain the gold imports have started yielding results as imports of gold and silver declined by 70% to $1.6 billion during first eleven months of current fiscal from a year earlier. India’s gold import is likely to come down to around 550 tonnes in FY13 from 845 tonnes in FY13 due to these restrictions.

Shrinking gold imports also helped to contain the current account deficit (CAD) to $31.1 billion (2.3% of GDP) during the April-December’FY14 as compared to $69.8 billion (5.2% of GDP) reported in the same period of previous fiscal year.

The CNX Nifty touched a high and low of 6,574.95 and 6,497.65 respectively.

The top gainers of the Nifty were Maruti Suzuki India up by 7.54%, Power Grid Corporation of India up by 3.56%, IndusInd Bank up by 3.00%, State Bank of India up by 2.83% and ITC up by 2.78%. On the other hand, Tata Motors down by 2.99%, Lupin down by 1.65%, Mahindra & Mahindra down by 1.58%, Infosys down by 1.48% and Wipro down 1.34% were the top losers.Most of the European markets were trading in red, Germany's DAX was down by 0.53% and United Kingdom's FTSE 100 was down by 0.14%, while France's CAC 40 was up by 0.09%.

The Asian markets barring Jakarta Composite concluded Tuesday’s trade in green following a strong rally on Wall Street. Indonesia’s rupiah rose to a 19-week high after foreign funds pumped money into local stocks as Jakarta Governor Joko Widodo announced he would run in July’s presidential election. The country’s foreign debt accelerated in January on the back of growing demand from the private sector to finance their expansion. The foreign debt rose to $269.3 billion, or 7.1% year-on-year. The yuan tumbled to an 11-month low after the Chinese central bank doubled the currency’s permitted trading band as it continues to relax its control over the exchange rate. Hong Kong’s unemployment rate remained unchanged at a seasonally adjusted 3.1%, from 3.1% in the preceding month.