Indian Market Ends Volatile Session Modestly Higher

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RTTNews - Thursday, the Indian market ended a volatile session higher after budget expectations more than offset continued profit taking and weak European cues. However, indications that the government could make dividends taxable in the hands of shareholders restricted big gains.

The economic survey tabled in the parliament on Thursday suggested a strong push for economic reforms and infrastructure development. The Survey recommended phasing out all cesses and surcharges on taxes and securities transaction tax, fringe benefit tax and proposed the introduction of a new income tax code. It suggested 100% foreign direct investment in health and weather insurance and targeted Rs.25,000 crore through disinvestment in state-run companies.

The survey has also called for decontrolling sugar, fertilizer and drug prices. The next round of stimulus could include both tax cuts and increase in government expenditure, it said.

Meanwhile, the headline inflation rate stayed in the negative zone for the third week in a row, declining 1.3% for the week ended June 20 from 1.14% in the previous week, government data released on Thursday showed. Wholesale prices rose 11.91% in the corresponding week last year.

Except for a while in the afternoon, the BSE Senex traded mostly in negative territory all through the day. After trading in a range of 14,694- 14,470, the Sensex finished at 14,658, up 13 points or a modest 0.09%. Meanwhile, the S&P CNX Nifty edged up 8 points or 0.18%, the broad-based BSE 500 index rose 0.23%, the mid-cap index gained 0.33% and the small-cap index added 0.74%.

On the BSE, the market breadth was fairly positive, as gainers outnumbered losers by 1452 to 1150, with 90 stocks closing unchanged. Sector-wise, while metal, public sector and realty stocks received good buying support, capital goods and auto stocks bore the brunt of the selling.

Among the top gainers, ONGC jumped 7.02%, Tata Steel soared 6.37%, Grasim Industries rallied 4.20% and Sterlite and DLF rose over 3% each.

On the other hand, BHEL fell 3.03%, Reliance Industries and Bharti Airtel ended down over 2% each, Reliance Communication declined 1.83% and Tata Motors closed down 1.67%. Maruti Suzuki, State Bank of India, Hero Honda, Hindustan Unilever, Larsen & Toubro and TCS were the other prominent losers.

Bajaj Hindustan fell 1.09% after its management committee approved the issuance of 3.54 crore equity shares to institutional buyers at a price of Rs. 204 per share. Bajaj Auto fell over 3% after its June vehicle sales fell 2% year-over-year. Indiabulls Financial Services gained 1.79% after the execution of a block deal at Rs.193 per share on the NSE.

Punj Lloyd rose 1.38% after it bagged three contracts worth Rs.1,873.18 crore from the housing and infrastructure board, Libya. Likewise, McNally Bharat Engineering was locked at the 5% upper circuit limit after securing two orders worth Rs.46.88 crore.

Public sector stocks rose after the economic survey suggested a minimum 10 percent stake sale in all unlisted public sector enterprises to rake in Rs.25,000 crore every year. GAIL, ONGC, Power Finance Corp, Hindustan Copper, REC and Mahanagar Telephone Nigam were the top gainers.

Kavveri Telecom Products advanced 4.15% after its Canadian unit acquired Montreal-based Trackcom Systems International to access a portfolio of products used for space defence and telecom applications.

Tech Mahindra added 3.16% a day after the company said it had not received a significant response to its tended offer to purchase 20 percent of Satyam from the shareholders. Maytas Infrastructure was locked at the 5% upper circuit limit on reports that banks have approved a restructuring package.

Strides Arcolab rose 1.57% after it repurchased foreign currency convertible bonds worth $20.5 million. Housing Development & Infrastructure fell 1.27% after it completed a QIP issue at Rs.240 per share

Indian Bank fell nearly 2% after it reduced its benchmark prime lending rate by 50 basis points with effect from July 1.Hindalco gained 1.38% after it reached an agreement with its banks to change the terms of a $982 million bank loan.

While state-run oil companies rose following a hike in fuel prices overnight, stocks of auto makers fell sharply on concerns of possible demand slowdown. Bajaj Auto fell over 3%, and Escorts, Ashok Leyland and Tata Motors fell around 2% each. Maruti Suzuki declined 1.53%, Hero Honda Motors eased 0.96% and Mahindra & Mahindra slipped 0.27%.

Prakash Industries edged up 0.56% after the company proposed to raise funds through various modes. IT stocks such as TCS and Infosys ended in the red after the rupee rose to a two-week high on Thursday amid a weaker dollar and hopes of improved capital portfolio inflows.

Elsewhere, the other Asian markets ended mostly weaker looking for direction from the U.S., European stocks were trading in the negative territory in early trading and the U.S. stock futures pointed to a negative opening on Wall Street Thursday ahead of the key U.S. non-farm payroll report that could shed light on the pace of recovery in the world's largest economy. Light sweet crude oil futures for August delivery were last trading at $68.23 a barrel, down $1.08 from its previous close at New York.

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