Markets turn negative but continue gyrating in a tight band

Benchmark equity indices edged lower in late-afternoon trades though the overall trading range remains very narrow. Lack of any major trigger caused sluggishness on the street at this point of time. The regional peers remained mixed while the US and the European index futures were flat in screen trade. Back home, the BSE's 30-share Sensex was finding strong support around the psychological 20,000-level while the NSE's 50-share Nifty continued to trade below the crucial 6,000-mark. Realty, healthcare and technology shares topped the gainers list in trade. On the flip side, oil & gas, capital goods and public sector undertaking stocks remained subdued at this point of time. Telecom stocks were witnessing some traction in trade. Reliance Anil Dhirubhai Ambani Group (Rel-ADAG) companies were also hogging the limelight in trade. Meanwhile, down-tick on the two index biggies -- RIL and ONGC -- was weighing on the market sentiment. The small-cap index of the BSE managed to stay afloat in trade. The market breadth on the BSE turned negative; the losers narrowly outnumbered the gainers in a ratio of 1388:1314 while 121 shares were unchanged.

The BSE Sensex shed 17.03 points or 0.09% to 20,011.90. The index touched a high and a low of 20,090.41 and 19,995.34, respectively.

The BSE Mid-cap index dropped 0.11% while the Small-cap index added 0.24%.

The main gainers in the BSE sectoral space were Realty up 0.48%, Healthcare (HC) up 0.47%, TECk up 0.27%, Metal up 0.24% and Fast Moving Consumer Goods (FMCG) up 0.20%.

The main losers in the BSE sectoral space were Oil & Gas down 0.90%, Capital Goods (CG) down 0.49%, Public Sector Undertaking (PSU) down 0.46%, Auto down 0.37% and Bankex down 0.19%.

Meanwhile, the Planning Commission, top economic strategy maker of the country, has decided to review the Build, Operate and Transfer (annuity) model of building roads as it has failed to pick up in India despite being most accepted model globally.

In the BOT (annuity) mode, the government pays the cost of building the road to the private partner every year or biannually after the beginning of commercial operations of the project. The BOT (annuity) mode has been the most popular one in Europe as well as the US. However, in India, a large section of the political establishments have not favoured the model.

In India, the other BOT mode has been more popular under which the constructer is allowed to recover his costs by collecting a toll over a specified period of time. One advantage of this model is that under it the builder knows that in case the project fails due to poor quality of construction, he will not be able to recover his money and therefore there is an inherent accountability.

 The major gainers on the Sensex were Wipro up 1.60%, RCom up 1.21%, HDFC Bank up 1.06%, Cipla up 1.04% and Bajaj Auto up 0.70%.

The major losers on the index were Tata Motors down 2.01%, RIL down 1.05%, L&T down 0.72%, ONGC down 0.72% and HUL down 0.62%.

Cotton traders want the government to begin soon the registration of the remaining amount of exports under the 5.5 million ceiling as decline in global prices going forward may hit prospects of shippers. The Cotton Association of India (CAI) has in urged the government to begin export registrations by the first week of January 2011.

The association feels that if the shipments are delayed, returns may decline due to potential correction in global prices. There is a possibility that as the US crop comes into markets, cotton prices may start softening going into 2011. However, as the government has to first ascertain the remaining quantity in the approved 5.5 million bales of exports, the actual registration is unlikely to begin till early days of January.

The S&P CNX Nifty trimmed 7.05 points or 0.12% to 5,991.05. The index touched a high and a low of 6,010.90 and 5,986.85, respectively. 

The top gainers on the Nifty were Wipro up 1.50%, Ranbaxy up 1.42%, RCom up 1.13%, HDFC Bank up 1.05% and ACC up 0.88%.

The top losers on the index were Tata Motors down 2.01%, Axis Bank down 1.41%, RIL down 1.02%, GAIL down 0.83% and ICICI Bank down 0.76%.

Among other Asian peers, Shanghai Composite slumped 1.74%, Hang Seng slipped 1.07%, Nikkei 225 declined 0.61% and Taiwan Weighted slid 0.24% while Jakarta Composite climbed 0.84%, KLSE Composite advanced 0.56%, Straits Times gained 0.48% and Seoul Composite rose 0.55%. 

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