Sensex manages to sustain above 18,000 level for second day in a row

Key domestic benchmarks managed to extend their current winning streak to seventh straight trading session, although both the frontline indices just about managed to hold in the positive territory. The BSE’s Sensex managed to sustain above 18,000 level for the second day in a row while, the NSE’s Nifty stayed above 5,400 level triggered by policy reform hopes. Sentiments also turned higher after state-owned oil marketing companies IOC, BPCL and HPCL edged up on reports that a Cabinet Committee on Political Affairs (CCPA) will meet later in the day for deciding diesel, cooking gas and kerosene price hike.

However, the bourses traded in the tight band throughout the day’s trade as investors turned cautious and booked profits ahead of the August headline inflation data due tomorrow and US Fed’s policy decision later today. The sentiments also got dampened after HSBC cut its GDP growth forecasts for FY13 and FY14 citing ‘the lack of reform traction’, a more ‘challenging’ global economic backdrop, and expectations of further delay in rate cuts by the Reserve Bank of India (RBI). HSBC expects India to grow 5.7% in FY13, down from its previous forecast of 6.2%. At the same time, buying in PSU space helped the gauges to trade above their neutral line as shares of select PSU companies edged higher amid media reports that the Union Cabinet on Friday will consider approving plans for selling some of the Government’s stake in five state-run companies.

On the global front, Asian stock markets rose on Thursday, underpinned by expectations that the Federal Reserve will announce new measures to stimulate the US economy, while the cautiousness ahead of the similar Fed meeting led to the slide of European equities.

Back home, some amount of support came in from Airline stocks, which gained after reports said that the CCEA would consider a plan to allow foreign airlines to pick up equity of up to 49% in Indian carriers. However, there is no certainty that the proposal to allow FDI in aviation sector will be approved by the CCEA on Sept 14. Meanwhile, Media shares like, TV18 Broadcast, NDTV and BAG Films and Media edged higher on renewed buying ahead of the October 31, 2012 deadline for cable TV digitization in four metro cities of Delhi, Mumbai, Kolkata and Chennai. However, gains remain capped as shares of Pantaloon Retail and Shoppers Stop after Union Commerce 7 Industry Minister Anand Sharma announced that the proposal to allow foreign retailers such as Wal-Mart and Carrefour to set up shop in India was not on the CCEA's agenda. The proposal to allow FDI in multi-brand retail has been kept in abeyance due to lack of political consensus and stiff opposition from local mom-n-pop traders.

The NSE’s 50-share broadly followed index Nifty, rose by just four points to end over the psychological 5,400 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex moved up by over twenty points to finish above the psychological 18,000 mark. However, the broader markets struggled to get traction throughout the session and ended in the red. Meanwhile, the market breadth remained in favor of declines as there were 1,258 shares on the gaining side against 1,591 shares on the losing side while 126 shares remain unchanged.

The BSE Sensex gained 21.13 points or 0.12% to settle at 18,021.16, while the S&P CNX Nifty rose by 4.35 points or 0.08% to close at 5,435.35.

The BSE Sensex touched a high and a low of 18,062.68 and 17,976.28 respectively. However, the BSE Mid cap index was down by 0.18% and Small cap index down by 0.25%.

Hero MotoCorp up by 1.87%, BHEL up by 1.57%, Hindustan Unilever up by 1.18%, ONGC up by 1.16% and Bajaj Auto up by 1.15% were top gainers on the Sensex, while Bharti Airtel down 2.85%, Cipla down 2.44%, Tata Motors down 1.41%, Jindal Steel down 1.27% and Mahindra & Mahindra down 0.95% were top losers on the index.

The major gainers on the BSE sectoral space were, FMCG up 0.58%, PSU up 0.55%, Oil & Gas up 0.44%, Capital Goods (CG) up 0.43% and IT up 0.42%, while Health Care (HC) down 1.15%, Realty down 0.53%, Auto down 0.37%, Metal down 0.21% and Power down 0.13% were top losers on the BSE sectoral space.  

Meanwhile, after slew of international credit rating agencies that have flagged concerns over India’s growth story, HSBC has now scaled down its economic growth forecasts for India for fiscal 2013 and 2014 from 6.2 per cent earlier to 5.7 per cent on account of 'the lack of reform traction', a more 'challenging' global economic backdrop and expectations the central bank will push back the timing for rate cuts. Further, the bank has also slashed its gross domestic product (GDP) forecast for economy for fiscal 2014 to 6.9% from 7.4%.

Earlier this month, US investment house, Morgan Stanley, citing a combination of weak external demand, low private investment and poor government finances, pruned India’s economic growth forecast to 5.1 per cent from previous projected figure of 5.8 per cent in the year ending March. It also reduced its estimate of GDP growth for 2013/14 to 6.1 per cent from 6.6 per cent. Besides, Morgan Stanley has also warned that policy sluggishness could push India’s growth further down to 4.3 per cent in the current fiscal year.

Confirming a sharp slowdown in Asia’s economy, Indian economic growth languished near its slowest in three years in the June quarter but was slightly better than expected at 5.5 percent.

The S&P CNX Nifty touched a high and low of 5,447.45 and 5,421.85 respectively.

The top gainers on the Nifty were BPCL up by 2.00%, Hero MotoCorp up by 1.95%, BHEL up by 1.49%, Bajaj Auto up by 1.13% and HUL up by 1.11%. On the flip side, Bharti Airtel down by 3.03%, Cipla down 2.74%, Ranbaxy down 1.87%, Siemens down 1.86% and Tata Motors down by 1.77% were top losers.

The European markets were trading in red, France's CAC 40 down by 0.71%, Germany's DAX down by 0.38% and United Kingdom’s FTSE 100 was down by 0.05%.

Asian stock markets ended mixed on Thursday, ahead of Federal Reserve’s decision later in the day. Investors remained optimistic of further stimulus action to boost economic growth of the world's largest economy. Japan's Nikkei ended higher, as dealers picked up stocks on better-than-expected earnings. However, Shanghai market ended lower as investors were cautious to make any strong position despite the cabinet saying yesterday it would take various measures, including speeding up payment of tax rebates to exporters, to bolster flagging exports.