RTTNews - Continued profit taking ahead of the expiry of July series derivative contracts on Thursday and a lack of surprise from the RBI on the policy front dragged the Indian market down on Tuesday. However, the frontline indexes, the Sensex and the Nifty, ended well off the day's lows, helped by favorable global cues and net FII buying in the past few sessions.

The Reserve Bank of India (RBI) kept its key policy rates, the cash reserve ratio, the repo and the reverse repo rates, unchanged saying that it would maintain an accomodative monetary stance until there were signs of a recovery. The central bank revised upwards its inflation target for end-March 2010 to about 5% and kept its gross domestic product(GDP) forecast unchanged at 6% for FY10, but with an upward bias.

Second-line stocks outperformed large-caps significantly. While realty, auto, metal, power and public sector stocks ended firm, FMCG and banking stocks bore the brunt of the selling.

After opening modestly higher at 15,428, the BSE Sensex moved in a range of 15,463-15,241 before finishing at 15,332, down 43 points or 0.28% from its previous close, while the S&P CNX Nifty fell 8 points or 0.18% to 4,564.

On the BSE, the broad-based BSE 500 index rose 0.22%, the mid-cap index moved up 1.13% and the small-cap index advanced 1.68%. Gainers outnumbered losers by 1706 to 946, with 93 stocks closing unchanged.

Among the top losers, Hindustan Unilever plunged 7.28%, ICICI Bank fell 2.37%, Grasim eased 1.77%, SBI declined 1.70%, Infosys moved shed 1.51%, Reliance Industries lost 1.46%, HDFC Bank fell 0.66%, Hero Honda Motors edged down 0.56%, Larsen & Toubro slipped 0.34% and TCS edged down 0.09%.

On the other hand, Tata Motors climbed 10.47%, Reliance Infrastructure rallied 3.91%, DLF advanced 3.40%, Reliance Communication rose 2.98%, Maruti Suzuki gained 2.84%, Tata Steel added 2.54% and Tata Power ended up 2.30%.

ACC, NTPC, Bharti Airtel, Wipro, Mahindra & Mahindra, Sterlite, Sun Pharma and ITC were the other prominent gainers.

Realty stocks outperformed the broader market after the government announced tax sops for affordable housing. Unitech and Mahindra Life climbed over 8% each, Sobha Developers jumped nearly 6%, HDIL rallied 4.72%, Anant Raj Industries advanced 4.63%, Ackruti rose 3.76%, DLF gained 3.40%, Parsvnath added 2.31% and Indiabulls Real Estate ended up 1.55%.

Defensive FMCG stocks bore the brunt of the selling after Hindustan Unilever reported a modest 3.6% drop in its quarterly net profit. Hindustan Unilever plunged 7.28%, Godrej Consumer Products fell 3.44%, Britannia Industries eased 1.13%, Tata Tea gave off 0.73%, Colgate Palmolive slipped 0.25% and Marico Industries edged down 0.06%.

Banking stocks fell sharply after the central bank maintained a status quo stance on key policy rates. Among the top losers, Bank of India tumbled 4.21%, ICICI Bank fell 2.37%, Oriental Bank of Commerce declined 1.81% and SBI ended down 1.70%.
GAIL fell nearly 2% after its board approved Rs. 8,000-crore investment in pipeline projects to be implemented by 2012. Reliance Power edged up 0.34% after it secured financing with various banks and financial institutions for its 300- MW power project being set up at Butibori near Nagpur in Maharashtra.

Jet Airways closed up 0.75% on reports that it is cutting down its financial liabilities through debt repayment, extension of repayment period and deferring capacity expansion. SpiceJet soared 5.77% after it reported a net profit of Rs.26.34 crore for the first quarter ended June compared to a loss of Rs.129.22 crore in the year-ago period.

Areva T&D India tumbled 5.25% after reporting a 22% drop in its quarterly net profit. Petronet LNG advanced 2.24% on reports that it was in talks to buy liquefied natural gas from InterOil's project in Papua New Guinea.

Gammon India rallied 4.46%, shrugging off speculation that it could be banned for 2 years for its involvement in the recent metro mishaps in Delhi. Kotak Mahindra Bank eased a little over 1% despite reporting a 72% year-over-year rise in its June-quarter consolidated net profit.

HT Media fell 2.12% on reports that it will spend Rs 40 crore in capital expenditure in the current fiscal year. For the three months ended June, the company's net income fell 14% from the year-ago period.

Infosys is eyeing Tier-II cities for expansion once the global economy recovers from the current recession, reports suggest. The stock closed down 1.51%. Texmaco surged up 6.25% after it raised Rs 170 crore via a qualified institutional share placement. MRF rallied 4.33% on reporting a four-fold rise in its quarterly net profit.

Elsewhere, the other Asian markets except Japan, ended in positive territory on increasing optimism about a global recovery and European stocks were trading mixed in early trading, while U.S. index futures pointed towards a slightly weaker opening on Wall Street Tuesday morning.

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