Benchmarks snap two-day losing streak

Benchmark equity indices snapped their two-day losing streak with respectable gains on Friday despite not very encouraging global cues. Bulls showed strength in the second half of the session after staying on the fence during early part of trade. Late pullback helped the BSE Sensex and the NSE Nifty to regain the crucial levels of 20,000 and 6,000 respectively during the session. Gains were aided by strong buying in consumer durables, metal and fast moving consumer goods space. On the other hand, auto, public sector undertaking and oil & gas stocks witnessed selective selling from traders. Tyre makers hogged the limelight in trade today on the back of the government's decision to slash import duty on natural rubber to 7.5% from 20% for dispatches to the tune of 40,000 tonnes until March 31, 2011. The Reliance Anil Dhirubhai Ambani Group (Rel-ADAG) companies witnessed sharp up-moves in late trades. On the flip side, the state-run oil marketing companies (OMCs) remained under pressure throughout the session as reports indicated that the Centre was likely to defer diesel price hike by few weeks. The broader indices matched the gains on the benchmark indices in trade today.

Meanwhile, the global cues remained negative during the session. The US equity markets finished on a mixed note in overnight trade while all the Asian peers, except Straits Times, edged lower in today's session. The European counterparts were also subdued in trade.

The domestic equity markets got off to a negative start this morning as weak global cues weighed on the sentiment. The main indices moved in a very tight range with a negative bias in the mid-morning session. The markets trimmed some of their early losses in late-morning trades. Similar trend continued in early-noon trade. The key indices turned positive in the late-afternoon session as investors rushed for bottom fishing at lower levels. Recovery in frontline counters also supported the afternoon recovery on the bourses. The markets consolidated at higher levels before scaling their intraday highs in last half an hour of trade. Finally, the key indices settled near their day's peaks. Total traded turnover for the session was at around Rs 1.23 lakh crore. The market breadth on the BSE was strong; the gainers thrashed the losers in a ratio of 1578:1266 while 153 shares were unchanged.

Among frontline counters, RCom, Rel Infra and Sterlite Industries gained anywhere between 10.60% and 2.50%. L&T added little over one percent in trade while RIL witnessed modest gains. 

On the other hand, Tata Motors, ICICI Bank and BHEL topped the small list of losers on the BSE Sensex.

Apollo Tyres up 3.29%, CEAT up 2.86%, MRF up 1.92% and JK Tyre up 0.66% were the star performers among tyre manufacturers in the day's trade.

The PSU OMCs lost around two percent each. BPCL shed 2.27%, IOC trimmed 2.18% and HPCL dropped 2%.

On the charts: The S&P CNX Nifty failed to cross 6,030-mark during the session, which is a strong resistance for the index in the near future. If the index breaks 5,938-mark next major support will be around 5,842 level. On the flip side, resistance will be around 6,030, 6,080 and 6,242.  

Finally, the BSE Sensex soared 90.78 points or 0.45% to settle at 20,073.66 while the S&P CNX Nifty jumped 31.60 points or 0.53% to end at 6011.60.

The BSE Sensex touched a high and a low of 20,086.42 and 19,880.36, respectively. RCom up 10.51%, Reliance Infra up 3.40%, Sterlite Inds up 2.58%, Hindalco Inds up 2.42% and ITC up 1.80% were the major gainers on the Sensex.

On the other hand, Tata Motors down 3.17%, BHEL down 1.01%, ICICI Bank down 1.01%, ONGC down 0.48% and HDFC down 0.28% were the major laggards on the index.

The BSE Mid-cap and Small-cap indices rose 0.25% and 0.32%, respectively.

Meanwhile, in order to cut the shortfall in coal availability, the coal ministry is charting a number of steps including urging the government to bring down the list of the 'no-go' areas as well as encouraging the state-owned as well as private companies to acquire coal mines in other developing countries particularly in the African region.

In context of reducing the 'no-go' areas, the ministry is now more hopeful particularly after having received the backing of Planning Commission in this context. Deputy Chairman of the Planning Commission had said on Tuesday that environment and forest ministry should show flexible attitude on defining 'no-go' areas. Union Coal Minister Sriprakash Jaiswal has now said on Thursday that the issue will come up before the Cabinet next week to work out a solution. 'We have circulated a cabinet note 15 days back. Hopefully, it will be taken up by the cabinet next week for discussion and some way out will be found,' Jaiswal said.

The minister also said that state-run companies would seek deals to buy mines in South Africa, Botswana and Mozambique when he visits the continent next month in a bid to plug a domestic shortfall. "The top priority is to buy coal mines," Jaiswal said in an interview in New Delhi, adding, "We already have two mines in Mozambique and the government is seeking more there and in other countries in Africa."

Coal India, India's publically owned coal miner, is the world's biggest producer of the fuel, and among the state-owned companies looking for deposits overseas to feed an economy growing at more than 8% a year. The coal ministry has projected that domestic supply may fall short of demand by 83 million tonne in the current fiscal year. Although India is quite a bit late in this race for resources, the economy growing at 8-9% can still rapidly generate enough resources to be spent on acquisition of natural resources.

The main gainers in the BSE sectoral space were Consumer Durables (CD) up 1.79%, Metal up 1.37%, Fast Moving Consumer Goods (FMCG) up 1.33%, Healthcare (HC) up 1.01% and Power up 0.78%.

On the flip side, Auto down 0.52%, Public Sector Undertaking (PSU) down 0.17% and Oil & Gas down 0.10% were the only losers in the BSE sectoral space.

The government has kick-started the deliberations on opening up the multi-brand retail space for foreign investors amidst surging prices of foods and vegetables and increase the ceiling of foreign direct investment (FDI) in some other sectors like defense production.

Key members of the Cabinet including the Finance Minister Pranab Mukherjee, Home Minister P Chidambaram, Defence Minister A K Antony and Commerce and Industry Minister Anand Sharma took part in the deliberations held on Wednesday. "We will be having more meetings. Policy formation is a dynamic process, and we are very progressive and forward-looking," said Sharma after the meeting.

The commerce minister though rejected the idea that government was looking into multi-brand FDI because of the recent surge in vegetable prices, particularly onions. Sharma said the government followed a progressive approach, and policy liberalization was incremental to it. He did not give any timeframe for implementing any of the steps that were discussed in the meeting.

The DIPP had earlier floated a consultation paper seeking the views of various government agencies and other stake holders on allowing the FDI into the multi-brand space. The DIPP advocated the move saying it would help push investment on back-end infrastructure, besides logistics and agro-processing. Currently, the government allows foreign investment of up to 51% in single-brand retail but the same in multi-brand is not allowed.

The S&P CNX Nifty touched a high and a low of 6,017.35 and 5,940.25, respectively.

RCom up 10.26%, Sun Pharma up 4.98%, RPower up 4.56%, Siemens up 4.13% and Suzlon Energy up 3.85% were the major gainers on the Nifty.

On the other hand, Tata Motors down 3.50%, BPCL down 2.23%, IDFC down 1.27%, SAIL down 0.75% and HCL Tech down 0.68% were the major losers on the index.

All the Asian equity indices barring Straits Times finished in the negative terrain on the last trading day of the week as investors' sentiment remained lackluster across the region ahead of Christmas holidays. Chinese stocks declined 0.70% on the back of reduced cash flows from crunch in the money markets and some speculative selling in large-cap auto stocks also supported the downfall. Japanese benchmark -- Nikkei dropped more than half a percent as the yen strengthened against the dollar and the euro in holiday-thinned trade while, Jakarta Composite remained closed on account of a public holiday.

Shanghai Composite declined 20.06 points or 0.70% to 2,835.16, Hang Seng slipped 69.17 points or 0.30% to 22,833.80, KLSE Composite shed 2.90 points or 0.19% to 1,511.58, Nikkei 225 dropped 67.29 points or 0.65% to 10,279.19, Seoul Composite was down 7.93 points or 0.39% to 2,029.60, Taiwan Weighted decreased 37.77 points or 0.42% to 8,861.10.

On the flip side, Straits Times was up by 6.02 points or 0.19% to 3,143.80.

European markets were trading in the red zone on Friday. France's CAC 40 shed 0.36%, Germany's DAX lost 0.14% and Britain's FTSE 100 slid 0.24%. 

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0HGzM7EwcDA==