Sensex negotiates minor gains; halts two session downtrend

Stock markets in India finally extended their consolidation phase on Tuesday as the benchmark equity indices halted the two session southward journey and negotiated their first positive close in last three sessions with slight gains.

After hitting the lowest point in the session, the frontline indices showed some signs of recovery in dying moments of trade and closed with a positive bias but did not budge a great deal from previous closing levels. It turned out to be a choppy session of trade as the frontline indices trading in an extremely tight range. The psychological 16,900 (Sensex) and 5,100 (Nifty) levels proved as strong support levels as the key indices despite repeated attempts refused to go substantially below those levels.

The local markets overlooked the largely pessimistic trend that most Asian markets exhibited since investors in the region remained concerned that the European crisis might not get a solution even in this weeks' Summit. Meanwhile reports that China has no imminent plans to introduce more stimulus policies to help revive vehicle demand in the world's biggest auto market, too dampened investors’ morale. But, markets in Europe traded on a cautious note with a slight positive bias ahead of this week's European Union summit.

On the domestic front, cues from the money market remained uninspiring for most part of the session as the rupee continued its streak of depreciation. However, the rupee bounced back sharply in late hours on the buzz that RBI probably sold dollars via state-run banks as the Indian currency approached a record low against the dollar.

On the BSE sectoral space, the Oil & Gas pocket surged over a percent after government allowed conditional oil import from Iran on cost, insurance and freight (CIF) basis for six months starting July 1, 2012 or till the issue is resolved. India also secured a waiver from US sanctions which prohibits import of crude oil from Iran in an attempt to check Tehran’s nuclear ambitions.

The beaten down Power counter too bounced back after getting pummeled in the last session and traded with gains of close to a percent. However, investors were seen booking profits in the defensive FMCG counter, which sank close to a percent and capped the upside chances for the benchmarks.

On the global front, the Asian markets are largely exhibiting weak trends and barring the Japanese benchmark which plunged close to a percent, most indices settled with about half a percent cuts. On the other hand, European counterparts too traded with flat note as Spain and its ailing banking sector remained particularly troublesome for markets. Moreover, reports that Cyprus has become the fifth Euro Zone nation to request a bailout, kept investors on the sidelines.

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 rose twenty four points to finish above the crucial 16,900 mark. Moreover, the broader markets too settled on a positive note with the Mid Cap index outperforming all its larger peers as it closed with gains of over one third of a percent.

The markets rose on large volumes of over Rs 2.3 lakh crore while the turnover for NSE F&O segment also remained on the higher side as compared to that on Monday at over Rs 1.5 lakh crore. The market breadth remained in favor of advances as there were 1,383 shares on the gaining side against 1,355 shares on the losing side while 137 shares remained unchanged.

Finally, the BSE Sensex gained 24.42 points or 0.14% to settle at 16,906.58, while the S&P CNX Nifty rose by 6.15 points or 0.12% to close at 5,120.80.

The BSE Sensex touched a high and a low of 16,946.66 and 16,815.87 respectively. The BSE Mid cap index was up by 0.36% and Small cap index up by 0.02%.

Gail India up 2.74%, Tata Power up 1.70%, ONGC up 1.52%, TCS up 1.40% and M&M up 1.36% were the major gainers on the Sensex, while HUL down 2.02%, Sterlite Industries down 1.21%, ITC down 1.12%, Infosys down 1.05% and Tata Steel down 1.00% were major losers on the index.

The top gainers on the BSE sectoral space were Oil & Gas up 1.20%, Power up 0.89%, PSU up 0.70%, Health Care up 0.65% and Bankex up 0.52%, while Consumer Durables down 0.98%, FMCG down 0.90%, Metal down 0.20%, Capital Goods down 0.06% and TECk down 0.06% were top losers on the BSE sectoral space. 

Meanwhile, Indian government has assured global investors that it is taking efforts to implement its decision to allow foreign direct investment (FDI) in multi brand retail.  While addressing the Global India Business Meeting 2012, Commerce and Industry Minister Anand Sharma, said, ‘we know that partisan politics delayed the implementation or notification (of FDI in multi-brand retail). We had to press the pause button, but we have not pressed the reverse button.’

Sharma had also written to three non-UPA chief ministers - Odisha’s Naveen Patnaik, Punjab’s Prakash Singh Badal and Uttar Pradesh’s Akhilesh Yadav seeking their support for early implementation of the government's decision. By adding further he said, the decision to open multi-brand retail to FDI has been taken in the best interest of farmers and consumers. Earlier, the government has allowed 100% FDI in single-brand retail.

The government’s contentious decision to liberalize FDI in multi-brand retail, which would open immense opportunities for domestic masses, had not gone down well with the BJP led NDA and other opposition parties while Trinamool Congress, one of the key allies of the ruling UPA government, too came out strongly criticizing government’s policy decision in the open, leading the government to defer the proposal to allow FDI in multi-brand retail.

The S&P CNX Nifty touched a high and low 5,134.55 and 5,095.50 respectively.

The top gainers on the Nifty were GAIL up 3.32%, Grasim up 3.06%, Tata Power up 2.07%, Power Grid up 1.99% and Siemens up 1.93%. On the flipside, SAIL down 1.89%, HUL down 1.88%, Sesa Goa down 1.12%, Sterlite industries down 1.06% and Infosys down 1.05% were the top losers on the index.

The European markets were trading in green, as France's CAC 40 up 0.02%, Germany's DAX up 0.02% and United Kingdom’s FTSE 100 up 0.10%.

Asian stocks fell today with Nikkei the most as the global rating agency Moody’s downgraded 28 Spanish banks on concerns of country’s sovereign debt and rising bad loans. Nikkei closed to its lowest level on concern that the European leaders will not be able to tackle Euro debt crisis. Shanghai Composite dipped due lack of improvement in vehicle demand. Strait Times had a low volume of trade due to looming of Euro crisis.

On the other hand Hang Seng managed to close in green as Chinese telecom companies hold the market from going down due to heavy volume of trading. Jakarta Composite too closed on a positive note.