MUMBAI: It was a day of consolidation for benchmarks after a stupendous rally of over 5 per cent in previous trade. Broader indices ended a choppy session on a flat note.

Market found support in rate sensitives like realty and banks following the financial stimulus. Shares of metal companies rallied after global commodity markets gained momentum on expectations of bailout of US auto industry.

Bombay Stock Exchange’s Sensex ended 0.1 per cent or 9.44 points lower at 9,645.46, bouncing back from a low of 9,441.97. The high of the day was 9,746.01.

National Stock Exchange’s Nifty closed at 2920.15, down 0.28 per cent or 8.1 points. The broader index touched a high of 2945.30 and a low of 2861.55.

“Markets are in a rally backed by renewed FII interest. We have bounced from the lows and 3100 is expected on the Nifty. In the short-term basis, market outlook is positive,” said Amitabh Chakraborty, President-Equities, Religare Securities.

The government is likely to come out with a second stimulus package to propel economic growth. The second stimulus package would be aimed at generating employment and ensuring that the credit needs of the companies are met, said Commerce and Industry Minister Kamal Nath.

While the benchmarks were lacklustre, the day belonged to second rung stocks. Buying momentum was seen in shipping stocks and shares of Reliance group stocks both Mukesh Ambani and Anil Ambani surged. Reliance Petroleum, Reliance Communication and Reliance Natural Resources ended higher.

BSE Midcap Index up 1.86 per cent and BSE Smallcap Index up 1.42 per cent.

“Some of the beaten down sectors like metals and real estate are under-owned and may see some buying coming in,” he added.

In an unusual development, the government on Thursday withdrew its affidavit in the Bombay High Court, wherein it had asserted Reliance Industries cannot sell its Krishna-Godavari basin gas to anyone without its approval to the pricing formula. This led to a bounce back in shares of Reliance Industries and a surge in RNRL.

Market discounted moderating inflation figure which dipped to 8 per cent for week ended November 29 from 8.4 per cent previous session.

This may come as welcome news as far as interest rates are concerned but on the macro economic front, India’s infrastructure sector grew 3.4 per cent in October as compared with year-ago period, but was lower than the growth rate in September, which was 4.8 percent. The infrastructure sector accounts for 26.68 per cent of the total industrial output.

“Market has already factored in low October IIP data and is expecting it to dip to 2 per cent. Any surprise on the upside may lead to an upmove. Apart from this, a lot depends upon the year-end results by US financial companies like Goldman Sachs, Citigroup, Morgan Stanley and. It will drive the sentiments and global markets,” he added.

Centre for Monitoring Indian Economy in its monthly report has said that India’s Industrial output is expected to grow by 6.3 per cent in FY 09 as against the earlier estimates of 8.3 per cent.

US companies will start announcing year-end results beginning December 16.

Biggest Sensex gainers were Jaiprakash Associates (10.63%), Sterlite Industries (8.43%), Reliance Communications (4.8%), ACC (2.81%) and Reliance Industries (2.58%).

Technology biggies dragged the most in the Sensex pack. Tata Consultancy Services lost 6.24 per cent, Satyam Computer declined 5.18 per cent, Wipro fell 4.45 per cent and Infosys Technologies slipped 3.23 per cent. Other losers in the 30-share index comprised Hindalco Industries down 4.38 per cent, BHEL down 2.75 per cent and ONGC down 1.77 per cent.

BSE IT Index was down on fears of spending slow-down in the sector and appreciation of rupee against the dollar. Indian rupee was at 48.33, up 65 paise against the dollar over the previous close of 48.98 following renewed FII interest in domestic stock market.

State-owned banks are planning to cut rates on small-ticket home loans by up to 300 basis points by Friday, as RBI separately considers ways to help the banking sector make small home loans available at cheaper rates and relaxed norms. It lifted sentiments in realty and banking stocks. BSE Realty Index closed 2.12 per cent higher and BSE Bankex ended 0.89 per cent up.

Owing to the broader market participation, market breadth on BSE remained healthy with 1557 advances against 911 declines.

Meanwhile European markets were mixed and US stock futures were pointing towards a positive open. Dow Jones futures were up 0.14 per cent, S&P 500 futures moved 0.07 per cent higher and Nasdaq 100 gained 0.68 per cent.

source: Economictimes

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