Rate cut hopes lifted Indian shares for a second consecutive session on Wednesday, although concerns that the European debt contagion may spread kept gains in check. Other Asian markets turned in a mixed performance, while European stocks erased early gains, resulting in a volatile trading.
The benchmark 30-share Sensex moved in a narrow band on both sides of the unchanged line before ending up 18 points or a modest 0.11 percent at 16,881, with only 12 of its components advancing. The broader 50-share Nifty index rose by 6 points or 0.11 percent to 5,121, while the BSE mid-cap and small-cap indexes ended narrowly mixed.
The rupee was well on its way to snap three days of losses, while crude traded flat ahead of a key OPEC meeting in Vienna and weekend elections in Greece. The International Energy Agency, which advises on energy policies of oil consuming nations, today nudged down its global oil demand forecast for 2012, citing uncertainty over summer power sector oil demand and non-OECD stockpiling.
In stock-specific action, software majors Infosys rose 0.6 percent on bagging a contract from Nordic retailer Dansk Supermarked, while rival TCS edged up 0.2 percent and Wipro advanced 0.9 percent.
Industry veterans Azim Premji and NR Narayana Murthy slammed the government over the current state of affairs yesterday, joining HDFC Chairman Deepak Parekh who said on Monday that the only thing holding India back at this juncture is "lack of political will."
FMCG giant Hindustan Unilever rallied 3 percent and rival ITC rose 0.6 percent on continued hopes for a good monsoon this year.
Banking stocks turned in a mixed performance, with SBI gaining 0.7 percent and ICICI Bank climbing 1.2 percent, while HDFC Bank fell 1.3 percent and Axis Bank lost 1.1 percent. Realtor DLF also shed 0.9 percent on profit taking after recent sharp gains on rate cut hopes at the upcoming policy meeting next Monday.
Investors eagerly await May inflation numbers due out tomorrow as the data will be key in determining whether the RBI will take an aggressive stance.
State-run oil explorer ONGC rallied 2.8 percent, a day after it extended a pact with Hinduja Group to source liquefied natural gas from Iran and other Middle East nations by one more year. Engineering & constrained giant Larsen & Toubro jumped 2.6 percent on reports that Japan's Mitsubishi Heavy Industries is in talks with the company to buy a stake in its shipbuilding unit "within a few years."
Drugmaker Sun Pharma rose 2.1 percent, steelmaker Jindal Steel gained 1.7 percent and state-run power equipment manufacturer BHEL ended up 0.6 percent.
Auto stocks came under selling pressure on reports that the oil ministry has proposed imposing a special tax on diesel cars. Maruti Suzuki tumbled 3.4 percent, Tata Motors lost 2.1 percent and Mahindra & Mahindra slid 1.8 percent. Two-wheeler makers Hero MotoCorp and Bajaj Auto also retreated, ending down 1.7 percent and 0.7 percent, respectively.
Copper producer Sterlite Industries fell 2.2 percent on profit taking, snapping a three-day rally. Energy giant Reliance Industries declined 0.8 percent after it reportedly warned of continuous decline in production at its KG-D6 fields until the government approves its investment plans.
Power producers like NTPC and Tata Power fell about 2 percent each, state-run miner Coal India lost 0.7 percent and telecom major Bharti Airtel slipped 0.3 percent. GAIL edged down 0.3 percent on news that it is setting up a 1,000-MW power plant in Punjab.
Reliance Communications rallied 2.6 percent after it received regulatory approval to list its sub-sea cable infrastructure network in Singapore through a business trust. UB group shares were in demand, with Kingfisher Airlines and United Spirits climbing over 6 percent each, while United Breweries Holdings soared 20 percent.
Ashok Leyland roe half a percent as the Hinduja group flagship firm unveiled plans to raise Rs 750 crore through issue of securities on a private placement basis. Nagarjuna Agrichem hit the 5 percent upper circuit limit after inaugurating its state-of-the-art R&D centre in Andhra Pradesh. Thinksoft Global Services soared 19 percent, extending its three-day rally amid heavy volumes.
Fortis Healthcare advanced 0.9 percent after Super Religare Laboratories, the diagnostic subsidiary of the company, signed definitive agreements with International Finance Corporation and private equity firm NYLIM Jacob Ballas who would jointly invest Rs 370 crore in its diagnostic chain.
Elsewhere, other Asian markets ended mostly higher in choppy trading, as gains in the U.S. and Europe overnight on hopes of more stimulus measures from the Federal Reserve and talks that the European Central Bank has resumed bond buying kept investors in a good mood.
Having said that, the looming Greek election, Fitch's warning of an impending European bank funding crunch and nervousness ahead of Italian bond auctions today and tomorrow kept gains in check.
European stocks slipped and the Dow futures pointed to a subdued start on Wall Street on nagging worries concerning Greece and Spain after the results of debt auctions showed rising borrowing costs for Germany and Italy.
by RTT Staff Writer
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