Mkt shrugs off FDI win, Nifty ends in red but above 5900
07 December 2012
The stock markets closed in the red, discounting the UPA government's victory in Rajya Sabha where it voted on FDI in multi-brand retail . The 30-share Sensex closed 62.70 points down at 19424.10 while the 50-share Nifty shaved 23.50 points to close at 5907.40. The equity benchmarks had stayed flat most of the day suggesting the final verdict on FDI in retail was already factored in.
The week saw a significant rally on Thursday with Nifty closing at 20-month high. However, it nosedived to close the week down 0.4 percent. Sensex closed down 0.5% while CNX Midcap stayed flat. IT Index lost 4 percent in the week.
Speaking to CNBC-TV18 Sanju Verma said the FDI verdict was a foregone conclusion. It is important to note that valuation-based rally is almost over and an earnings-based rally will play itself out now .
Retail stocks Pantaloon, Trent and Phoenix Mills closed in the green, while Shoppers' Stop lagged behind.
Country's largest car maker Maruti Suzuki topped the buying list, rising 2 percent while shares of Tata Motors and M&M gained over 0.5 percent.
State-controlled power equipment major BHEL and private power producer Tata Power were up over 0.7 percent.
Top lender State Bank of India rose 0.16 percent whereas its rivals ICICI Bank and HDFC Bank were down over 0.2 percent. Housing finance company HDFC fell 0.76 percent.
Software services exporters Infosys and TCS lost 0.8-1 percent, continuing the downtrend since yesterday.
Healthcare majors Cipla, Sun Pharma and Dr Reddy's Labs declined 0.4-0.5 percent. Steel producers Tata Steel and Sterlite Industries tanked 1-2 percent.
Index heavyweight and private oil & gas producer Reliance Industries slipped 0.9 percent.
Realty major DLF and private sector lender Axis Bank were down 2.5-3 percent.
In the second line shares, Hexaware plunged over 9 percent as the company lowered revenue guidance from 20 percent to 18 percent for Q4.
Equity benchmarks BSE Sensex and Nifty were trading flat ahead of the vote on Foreign Direct Investment or FDI in multi-brand retail in Rajya Sabha today. The Government's chances of a win were bolstered after Mayawati announced her decision to support the motion. Experts say mild profit booking may hit markets after it closed at 20-month high on Thursday. Experts say as Rajya Sabha gets closer to vote on FDI, market will find direction.
Despite today's lacklustre mood, analysts remain optimistic of the end result. According to Ramesh Damani, there's nothing stopping Sensex from touching 21,000-level .
At 12.42 pm, the 30-share Sensex was up 17.08 points or 0.09 percent at 19503.88, and the Nifty was trading with 0.75 points or 0.01 percent gains at 5931.65.
Meanwhile, shares in Maruti Suzuki India touched a 52-week high registering 3.4% on media reports of price hike in January. It was currently trading with 2.62 percent gains. Among other auto gainers, Tata Motors had risen 2.1 percent, but fell mildly after profit booking. Mahindra and Mahindra restarted its run-up with a 1.45% percent jump. Dealers say January may see a lot of auto manufactures going for price hike after December inventory gets sold off.
General Motors Co's Indian unit said Thursday it will raise car prices in the country by 1-3 percent from January due to high input costs and currency fluctuation.
Other Sensex gainers were BHEL and Coal India. Top losers include HDFC, Tata Steel, TCS, HDFC Bank and Sterlite Industries. ITC fell around 0.5 percent on profit booking after it touched an all-time high of Rs 303 earlier in the day.
On the broader BSE 500, GMR Infra shares were down 2 percent. The stock has come under selling pressure after a Singapore Supreme Court order that gave the control of Male international airport that GMR was developing, to the Maldives government.
Indian equity benchmarks remained directionless since early trade despite positive Asian markets. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices gaining 0.8 percent each.
The 30-share BSE Sensex moved up 33 points to 19,519.93 and the 50-share NSE Nifty was up 6 points at 5,936.95.
Auto stocks gained quite smartly. Commercial vehicle major Tata Motors rallied 2.4 percent and top car maker Maruti Suzuki surged 3.6 percent. Utility vehicle major Mahindra & Mahindra was up nearly 2 percent whereas two-wheeler majors Hero Motocorp and Bajaj Auto declined 0.2 percent each.
Country's largest lender State Bank of India rose 1 percent whereas its rival HDFC Bank fell 0.5 percent.
Engineering conglomerate Larsen & Toubro and state-owned power equipment maker BHEL climbed 1 percent and 2 percent, respectively.
Private oil & gas producer Reliance Industries moved up 0.5 percent and top telecom operator Bharti Airtel went up 1.4 percent.
Meanwhile, shares of Infosys, ITC, TCS, HDFC, HUL, Tata Steel, Dr Reddy's Labs, NTPC and Sterlite were down 0.5-0.8 percent.
In the second line shares, Tuni Textile, Puravankara Projects, MTNL, Parsvnath and Motherson Sumi surged 4.5-6.5 percent whereas Hexaware Tech, Shree Global, National Fertiliser, Standard Chartered IDR and Bhushan Steel lost 1.5-5 percent.
On the global front, Shanghai rose 1.16 percent while Hang Seng and Taiwan gained 0.2 percent. Straits Times went up 0.9 percent and Kospi was up 0.5 percent.
Equity benchmarks Sensex and Nifty crawled higher in early trade, but investors continued to lavish their attention on mid and small cap shares as they have been doing over the last few sessions.
The Sensex was up 66 points at 19554 and the Nifty was up 15 points at 5946.
Dealers said frontline shares could consolidate for a while, as most of them were beginning to look over valued, and also, market operators had trimmed their long positions by partly realizing profits.
Auto, capital goods and power shares are among the best performers, while pharma, FMCG and IT shares are lagging.
Midcaps, however, continue to be the centre of action. The BSE Midcap and Smallcap indices are up around 0.5 percent each.
"Prices of most mid-caps have almost doubled from their lows in July, and we still continue to find great value in them," said Ramesh Damani, BSE broker.
Indiabulls Financial Services, Phoenix Mills, Andhra Bank, Strides Arcolab and
Ruchi Soya led gainers among second line shares, gaining 3-4%.
Brokers expect the market to trend higher during this month, but they also expect some intermittent corrections as the shares try to digest the steep gains made over the last one month. Both Sensex and Nifty are quoting around their highest levels in the last 19 months.
Brokers say the uptrend will be driven more by sentiment and liquidity, rather than fundamentals. High inflation and gaping fiscal and current account deficits will make it harder for the Reserve Bank of India to cut interest rates, something the market is betting on.