Sensex snaps a choppy session almost unchanged; WPI inflation eyed

After rallying over a percent in last session, Indian benchmark equity indices consolidated their position around the previous closing levels on Wednesday. The psychological 5,150 (Nifty) and 16,900 (Sensex) levels proved as stern resistances as the key gauges failed to surmount those levels by the end. The key gauges displayed listless performance through the day as the aimless benchmarks appeared exhausted and showed only sideways kind of movement in a tight band, lacking any significant upside triggers.

After the disappointing industrial production data, market participants have now turned their focus towards the monthly WPI inflation data for May which is forecasted to accelerate at the fastest pace for the year in May at 7.6%. However, the investors are likely to keep a close eye on core inflation number as the fate of monetary easing by the RBI at its policy meeting on June 18 would depend on whether the core inflation remains above or below the 5% threshold.

Domestic markets got off to a quiet start as sentiments across global space remained uninspiring. Markets across the Asian region exhibited positive trend as market participants remained in positive mood on growing speculations that central banks globally could make further moves to stimulate the world economy and spur more rapid jobs growth. Though, investors took cue from one of Chicago Federal Bank’s President’s comments of favoring an accommodative policy, however, anxiety over Greek general elections scheduled later this week kept investors on the sidelines.

On the domestic front, investors speculated that the RBI will be compelled to cut key interest rates irrespective of what the headline inflation number, in order to bring Asia’s largest economy out of the doldrums. Meanwhile, the beleaguered rupee, which extended its streak of depreciation in morning, strengthened against the US dollar in afternoon trades and eased investors’ concerns to some extent.

Moreover, investors were busy squaring off their positions from the rate sensitive Automobile counter amid reports that the government is contemplating the idea of imposing an additional tax on diesel fuelled vehicles, which would increase the prices of diesel cars upto Rs 2.5 lakh and prove to be a double whammy for car manufacturers. Market leader Maruti Suzuki took severe beating as it plunged over three percent.

However, investors continued to show buying interests in Capital Goods counter, which surged over one and half a percent led by heavyweight L&T. The defensive players like FMCG and Healthcare too found takers in the session as they closed with notable gains.

On the global front, markets across the Asian region largely showed sign of consolidation in Wednesday’s trading session as most markets closed in close proximity with their previous closing levels. The European markets got a positive start but the major equity indices failed to sustain the gains and slipped lower in later part of the trade. Investors turned skeptical after German bonds yields rose amid rising concerns over contagion from Spain's banking trouble while this weekend's critical Greek elections too kept market men on the defensive.

Back home, the NSE’s 50-share broadly followed index Nifty, added single digit gains to settle above the psychological 5,100 support level while Bombay Stock Exchange’s Sensitive Index - Sensex gained less than twenty points to finish below the crucial 16,900 mark. Moreover, the broader markets too settled on a quiet note with the Mid Cap index suffering marginal losses and underperforming its larger peers.

The markets rose on weaker volumes of over Rs 1.36 lakh crore while the turnover for NSE F&O segment also remained on the lower side as compared to that on Tuesday, at over Rs 0.98 lakh crore. The market breadth turned optimistic by the end as there were 1,403 shares on the gaining side against 1,301 shares on the losing side while 145 shares remained unchanged.

Finally, the BSE Sensex gained 17.71 points or 0.11% to settle at 16,880.51, while the S&P CNX Nifty rose by 5.55 points or 0.11% to close at 5,121.45.

The BSE Sensex touched a high and a low of 16,944.11 and 16,792.87 respectively. The BSE Mid cap index was down by 0.21% and Small cap index up by 0.13%.

Hindustan Unilever up 3.03%, ONGC up 2.83%, L&T up 2.60%, Sun Pharma up 2.37% and Jindal Steel up 1.71% were the major gainers on the Sensex, while Maruti Suzuki down 3.38%, NTPC down 2.51%, Sterlite Industries down 2.21%, Tata Motors down 2.10% and Tata Power down 1.77% were the losers on the index.

The top gainers on the BSE sectoral space were, Capital Goods up 1.58%, FMCG up 1.06%, Health Care up 0.45%, IT up 0.45% and PSU up 0.25%, while Realty down 1.47%, Auto down 1.47%, Consumer Durables down 0.92%, Power down 0.81% and Metal down 0.34% were the top losers on the BSE sectoral space. 

Meanwhile, in a move to enhance investments in infrastructure sector, India’s Minister of Commerce, Industry and Textiles, Anand Sharma has invited the Brazilian investment in recently launched National Infrastructure and Manufacturing Special Economic Zone (SEZ) as well as in the food processing industries at a meeting with the Brazilian Minister of Development, Industry and Foreign Trade, in Brasilia.

With lot of opportunities in infrastructure sector, both the nations agreed that companies from both sides should actively participate in the infra space. Further, both the nations agreed the establishment of a Working Group in the Pharmaceuticals and Life Sciences, as a step towards furthering the cooperation between India and Brazil in the area.

Brazil showed its interest in joint production of essential drugs for fighting HIV Aids, malaria, etc. Moreover, both the nations also placed emphasis on the importance of re-initiating the India-Brazil CEOs Forum, a decision taken in the form of declaration at the Summit level in March 2012. India, on the other hand, to move bilateral cooperation of Hydrocarbon sector on fast track, sought for an early meeting of the existing Joint Working Group.

Further, a Memorandum of Understanding (MoU) between the Council of Scientific and Industrial Research (CSIR), through National Physical Laboratory (NPL) and the National Institute of Metrology (INMETRO) was signed. The main purpose of the MoU was to provide a framework for the exchange and enhancement of scientific & technological knowledge services and capabilities of both the nations in the areas of chemistry, physics and engineering measurement sciences along with development of certified reference materials for thermo physics properties, nanometrology, analysis of surface and thin films, biofuels, and biotechnology.

The S&P CNX Nifty touched a high and low 5,144.90 and 5,095.45 respectively.

The top gainers on the Nifty were HUL up 3.36%, Ambuja Cement up 3.15%, L&T up 2.45%, Sun Pharma up 2.45% and ONGC up 2.29%. On the flipside, Maruti Suzuki down 3.31%, Sterite Industries down 2.87%, NTPC down 2.32%, Tata Motors down 2.31% and Tata Power down 2.08% were the top losers on the index.

The European markets were trading mixed, as France's CAC 40 down 0.28%, Germany's DAX down 0.38% and United Kingdom’s FTSE 100 up 0.01%.

All the Asian equity indices barring Straits Times ended the day’s trade in the positive on Wednesday as traders remained optimistic amid speculation the Federal Reserve will stimulate the economy and after the European Central Bank endorsed a plan to guarantee bank deposits, although a slump in shares of European retailer Esprit capped the gains. Meanwhile, Hong Kong and Chinese indices rose 0.82% and 1.27% respectively, by strong led gains among Chinese insurers and utilities. The China’s two biggest insurers China Life Insurance and Ping An Insurance gained 7.20% and 6.50%, respectively, on reports that China’s insurance regulator is planning to reduce limitations on insurers' investments in infrastructure bonds. Moreover, Gains in a few large cap stocks boosted Japanese Nikkei up by 0.60%, but the broader market was weak as investors remained concerned about Spain’s struggle to finance its debt and looming elections in Greece.