Indian shares ended largely unchanged on Thursday, as lackluster global cues ahead of tonight's FOMC decision and the rupee's weakness despite continued foreign fund inflows offset fresh hopes for fiscal reforms. Samajwadi Party supremo Mulayam Singh Yadav's attacks on Rahul Gandhi and UPA-II's "scams" as well as his comments that general elections may be held earlier than 2014 also kept investors cautious.
The government today said that several policy measures are on the anvil to arrest the slowdown and prop up investment climate. "Growth and investments will certainly happen and we see things moving from here on," media reports quoted Cabinet Secretary Ajit Seth as saying on the sidelines of a high level meeting on manufacturing.
Separately, Agriculture Minister Sharad Pawar said that monsoon rains have revived over the past few weeks, with deficit coming down to just about eight percent below average currently in the season so far.
Extending gains for a seventh day in a row, the benchmark BSE Sensex ended the session up 21 points or 0.12 percent at 18,021, with 19 of its components advancing. The broader 50-share Nifty index rose by 4 points or 0.08 percent to 5,435, while the BSE mid-cap and small-cap indexes ended on a subdued note, losing 0.2 percent and 0.3 percent, respectively.
FMCG stocks continued to attract much attention amid the revival in monsoon rainfall. ITC edged up 0.2 percent, while Colgate Palmolive and Hindustan Unilever rose about 1.2 percent each. Vijay Mallya-led United Spirits rallied 3.9 percent and United Breweries soared 12 percent.
Public sector enterprises were in the spotlight ahead of a Cabinet Committee on Economic Affairs meet tomorrow to consider PSU disinvestment. NMDC added a percent, Hindustan Copper rose 1.4 percent, Neyveli Lignite advanced 1.7 percent, Nalco rallied 2.1 percent and Engineers India jumped over 4 percent.
State-run oil retailers HPCL, IOC and BPCL rose between 0.7 percent and 1.9 percent, while oil explorer ONGC added 1.2 percent ahead of a ministerial meeting today evening to decide on fuel price hike.
Aviation stocks - Kingfisher, SpiceJet and Jet Airways - jumped 2-5 percent on reports the government will take a decision on allowing FDI in aviation at a Cabinet meet tomorrow.
ICICI Bank gained a percent after the largest private sector lender in the country cut interest rates on retail term deposits across maturities. State-run rival SBI rose half a percent on saying that it expects a 20 percent growth in housing loan portfolio this fiscal.
Two-wheeler manufacturers Bajaj Auto and Hero MotoCorp rose 1-2 percent on hopes for pick up in rural demand. BHEL advanced 1.6 percent on bargain hunting following recent steep losses on concerns over order cancellations. Coal India gained 0.9 percent on capex reports.
Among the prominent decliners, telecom major Bharti Airtel lost 2.9 percent, automaker Tata Motors fell 1.4 percent, metal stocks like Jindal Steel and Sterlite slid about a percent each, mortgage lender HDFC declined 0.7 percent and private sector lender HDFC Bank edged down 0.2 percent.
With investors betting on fiscal reforms, defensive bets like healthcare stocks ended in negative territory. Divis, Cadila, Piramal Health, Ranbaxy, Cipla, Biocon and Lupin fell 2-3 percent. Pantaloon Retail fell 2.4 percent and Shoppers Stop lost a percent amid reports a proposal to open multi-brand retail to foreign direct investment is not under consideration as of now.
On the global front, Asian stocks turned in a mixed performance and European stocks were subdued in early trading as positive sentiment in the wake of a crucial German court ruling on the Eurozone bailout fund gave way to caution ahead of Fed decision.
It is widely expected that Fed Chairman Ben Bernanke will announce a third round of asset purchases and extend the central bank's low-rate guidance into 2015 as the FOMC meeting draws to a close tonight. In an Aug. 31 speech in Jackson Hole, Wyoming, Bernanke defended the extraordinary steps the Fed has taken to date, saying two rounds of QE between 2008 and 2011 had created 2 million jobs and accelerated U.S. economic growth.
In news out of Europe, voters in the Netherlands overwhelmingly backed two pro-European centrist parties committed to debt-busting austerity, dispelling concerns that radical eurosceptics might gain sway in a core euro zone country.
by RTT Staff Writer
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