Nifty snaps 4-day winning streak; midcaps outperform

Indian equity benchmarks snapped four-day winning streak with the Nifty closing 9 points down on Monday. The 30-share BSE Sensex fell 34.58 points to close at 19,305.32 while the 50-share NSE Nifty lost 8.9 points to 5,870.95.

The market saw profit booking as it had rallied 4.5 percent in the last four sessions on hopes of FDI clearance in retail. Experts feel the market will see small correction after sharp rally seen last week.

There is some more dampner ahead for the market as Fitch Ratings has warned that gross domestic product (GDP) at 5.3 percent in July-September confirms slowdown in Indian economy . Fitch expects FY13 GDP growth to fall to 6% and pegs FY14 growth at 7%.

Meanwhile, private sector lender HDFC Bank dropped 2.37 percent whereas its rivals State Bank of India and ICICI Bank were up 1.53 percent and 0.33 percent, respectively.

Cigarette major ITC and housing finance company HDFC moved up 0.7 percent each. Top telecom operator Bharti Airtel lost 1.76 percent.

Auto stocks were mixed after reporting sales numbers for November in last weekend. Commercial vehicle major Tata Motors went down 0.8 percent while two-wheeler majors Hero Motocorp and Bajaj Auto slipped marginally.

Country's largest car maker Maruti Suzuki and utility vehicle major Mahindra & Mahindra climbed 1 percent each.

Index heavyweight and private oil & gas producer Reliance Industries was up 1.23 percent

Steel producer Tata Steel and aluminium major Hindalco Industries were up over 1 percent. State-owned power equipment maker BHEL advanced 1.6 percent.

The broader markets outperformed benchmarks quite nicely. The BSE Midcap Index went up 1.2 percent and the Smallcap gained 0.86 percent.

Cement stocks topped the buying list with the ACC gaining 3.76 percent and Ultratech Cement rising 3 percent.

In the second line shares, Videocon Industries, CRISIL, Pantaloon Retail, City Union Bank and HT Media surged 6-12 percent whereas Blue Circle, Edelweiss Financial, Tata Communications, Sanofi India and 3M India were down 3-6 percent.

Advancing shares outnumbered declining by a ratio of 1613 to 1240 on the Bombay Stock Exchange.

The market reacted sharply to Fitch Ratings assertion that India's second quarter numbers for Gross Domestic Product (GDP) confirms slowdown in Indian economy, which can be revived only through reforms. Fitch expects FY13 real GDP growth to fall to 6% and pegs FY14 growth at 7%. Stock markets on Monday continued its downward trend since morning, with profit booking swallowing all gains made on Friday.

At 14.49 hrs IST, the Sensex was down 81.93 points or 0.42% at 19257.97, and the Nifty down 24.90 points or 0.42% at 5854.95. Ultratech Cement was the biggest gainer on Nifty registering a spike of 2.95% to trade at Rs 1,998.70. Mahindra and Mahindra, which reported excellent sales numbers despite slowdown, remained on top of the buy list and recorded lifetime high of Rs 964.45. All other auto stocks were trading up between 1% and 2%.

Meanwhile, November manufacturing PMI for UK came in at 49.1, up from 47.3 in October.

Accelerated profit taking has sent benchmark indices BSE Sensex and the Nifty into red. Despite a 5% hike in foreign institution investors' cap on debt investments, which is expected to lure FIIs, profit-booking has picked up pace. At 11.36 hrs IST, the Sensex was down 33 points or 0.17% at 19306.90, and the Nifty was trading down 9.10 points or 0.15% at 5870.75.

UltraTech Cement, which rose 3.21% on the Nifty, moved on account of the news that the company was in advanced talks to buy Jaypee's cement biz in Ahmedabad. CNBC-TV18 sources say Ultratech is keen to buy Jaypee's 4.8 MTPA facility at $160-165/tonne. The deal is seen around $760-890 million.

In another development, infrastructure major GMR obtained stay in Sigapore court, which will allow the company to continue operation in Male. Few days back, Maldives had abruptly decided to terminate GMR's airport contract.

Meanwhile, Mahindra and Mahindra, Tata Steel, Maruti Suzuki were top Sensex gainers, rising between 1.49% and 1.97%. The losers include HDFC Bank, Bharti Airtel and ITC - all losses were sub 2%.

Key benchmarks, Sensex and Nifty slipped after a firm start as investors are booking profits after last week's frenzied rally which pushed up the indices around 4.5%. The sharp upmove seen in the past few trading session helped Nifty breach short-term resistance level 5780.

The 30-share BSE Sensex fell 32.34 points to 19,307.56 while the 50-share NSE Nifty slipped 13 points to 5,867.05 after seeing a rise of 253 points last week. In a recent report, Nirmal Bang noted the short-term resistance for Nifty stood near the 5950 mark.

Private sector lender HDFC Bank dropped 1.5 percent whereas its rivals State Bank of India rose nearly 1 percent. Tulip Telecom rose nearly 5% as the news of the company paying FCCB dues favoured the stock.

Meanwhile, HSBC PMI numbers for India appeared good indicating reversing of negative sentiment. However, rupee remained weaker following equity markets. Brent was trading up at 111/USD.

Telecom operator Bharti Airtel and state-controlled oil & gas producer ONGC were down 0.6 percent each.

Cigarette major ITC and two-wheeler major Hero Motocorp fell 1 percent each.

Utility vehicle major M&M and top car maker Maruti were up 1.3-1.7 percent post good sales numbers in November.

Index heavyweight and private oil & gas producer Reliance Industries was up 0.5 percent.

The broader markets outperformed benchmarks with the BSE Midcap Index gaining 0.7 percent and Smallcap rising 0.5 percent.

In the second line shares, Jet Airways surged over 5 percent as media reports suggest that the company will approach Foreign Investment Promotion Board (FIPB) for permission to tweak its ownership pattern to facilitate an equity investment by Etihad Airways.

Another airline company SpiceJet too gained more than 5 percent as media reports suggest that Kalanithi Maran has decided to raise his stake in the company by 5 percent.

Tulip Telecom, Thermax and South Indian Bank rallied 4.5-5 percent whereas Bajaj Corp, Prism Cement, Tata Communications, Dish TV India and Blue Circle were down 2-4.5 percent.

Advancing shares outnumbered declining by 821 to 489 on the National Stock Exchange.

On the global front, Asian markets were mixed in morning trade on lack of cues from the US.

Key benchmarks, Sensex and Nifty were slightly up in early trade, while investors loaded up on second line shares in the hope they would outperform large caps hereon.

The Sensex was up 57.52 points at 19,397.42, and the Nifty was up 13.65 points at 5893.05. Both indices gained around 4.5% last week after positive statements from global players like Moody's and Goldman Sachs.

The BSE Midcap and Small cap indices were up close to 0.5% each, more than the main benchmarks.

Market breadth on the NSE was quite strong with more than 70% of the stocks quoting higher than their previous close.

And while second quarter GDP figure pointed to sluggish growth for the rest of this  fiscal, market participants appear to be focusing on the positive aspects for now.

MphasiS shares are up over 4% to Rs 409 on news of the company acquiring US-based data analytics firm Digital Risk for USD 200 million.

Early gainers include Thermax, United Breweries, Bayer Cropscience and National Aluminium, up between 4-8%.

Brokers say the rally over the last couple of weeks has been driven mainly by short term players like hedge funds, looking to ride the momentum. They say fund managers of India-dedicated funds have been cautious because of high valuations in the context of a slowing economy.

"I don't think any big legislative action can happen in this (Parliament) session," Sandeep Bhatia of Kotak Institutional Equities told CNBC-TV18. But he added that indices could gain around 5% this sentiment, driven by positive sentiment and liquidity.

Indian shares have performed better than expected so far this calendar, with much of the gains coming since October when the government announced some policy measures.

Traditionally, December has mostly been a good month for stock markets globally. That is partly also because fund managers make targeted purchases to boost the net asset value of their schemes so as to qualify for better bonuses.

Laggards in morning trade include Piramal Enterprises, Tata Communications, GlaxoSmithkline Pharmaceuticals, HDFC Bank and BPCL, all don 1-2%.