The Indian market ended a lackluster session on a flat note Wednesday, as reports about India resuming talks with Mauritius on the double tax avoidance treaty and the weather office's prediction of a "below normal" monsoon this year overshadowed relief over Greek bailout.
Lingering concerns over inflation and interest rate hikes and reports that most foreign institutional investors are underweight on Indian equities also kept underlying sentiment subdued.
The other Asian markets closed mostly higher for a second consecutive session today, with Japan's Nikkei climbing 1.8 percent on short covering, after the Greek government won a vote of confidence from parliament, taking embattled prime minister George Papandreou a step closer to pushing through austerity measures to avoid a sovereign default.
However, European stocks fell and the euro lost ground against the dollar, as investors took a cautious stance ahead of the U.S. Federal Reserve's policy statement that will come out later in the global day.
Meanwhile, the International Monetary Fund's warning that the Spanish economy is facing "considerable" risks despite strong and wide-ranging policy response over the last year added to concerns about the euro zone.
Though the policy response to the serious economic and financial challenges has helped the country to gradually recover and get the necessary rebalancing underway, the repair of the economy is still "incomplete," IMF said in a report.
After moving in the range of 17,679-17,492, the benchmark 30-share Sensex ended down 10 points or 0.06 percent at 17,551, while the broader Nifty index rose by 2 points or 0.05 percent to 5,278. Second-line stocks came under significant selling pressure and the market breadth was fairly negative, with about 1800 decliners versus 1036 gainers on the BSE.
Sector-wise, stock-specific buying in oil/gas, capital goods and banking stocks offset losses in consumer durable, realty and FMCG shares.
FMCG player Hindustan Unilever (down 3.4 percent) led the losses in the Sensex pack on news related to the monsoon rains. Car maker Maruti Suzuki lost 2.4 percent, telecom giant Bharti Airtel fell 2.3 percent, steel maker Jindal Steel declined 1.5 percent, two-wheeler manufacturer Hero Honda Motors shed 1.4 percent and property developer DLF closed down a percent.
Tata Motors eased 0.2 percent after the Kolkata High Court directed the automaker to serve a notice to the state government on an ex-parte petition filed by the company concerning the Singur land rehabilitation and development bill, 2011. TCS fell 1.9 percent, a day after the software exporter allayed concerns over weakening of demand.
Among oil/gas companies, ONGC recovered from a 52-week low to close over 2 percent higher and Cairn India added a percent, while Reliance Industries edged down 0.3 percent. HDFC Bank eased 0.3 percent on reports that it will buy 1 percent stake in the Bombay Stock Exchange through the preferential route.
Tata Steel posted a modest 0.2 percent loss after the company said it has received about $130 million as part of an arbitration settlement between its subsidiary and certain third parties relating to the Teesside Cast Products business. Dr. Reddy's Laboratories slipped 0.1 percent after it received the U.S. drug regulator approval to launch Levofloxacin tablets in the U.S. market.
Mahindra Satyam shed a percent after it signed a strategic pact with Swedish defence and security company Saab to establish a technology center. MRF slumped 4.1 percent after the tyre maker declared a lock-out at its Kottayam plant.
Coal India fell 2.8 percent amid reports that it will call for fresh bids for exploratory drilling at two coal blocks in Mozambique. Indian Oil Corporation eased 0.7 percent on fund raising reports.
Among those that gained, utility vehicles manufacturer Mahindra & Mahindra rose 2.4 percent, drug maker Cipla gained 2 percent, two-wheeler manufacturer Bajaj Auto added 1.7 percent, power producer and Tata Power advanced 1.6 percent. Larsen & Toubro edged up 0.4 percent after the engineering & construction giant said it had bagged fresh orders worth Rs.4,100 crore in buildings & factories segment.
Axis Bank rose 1.1 percent after announcing a change in directorate. Orchid Chemicals & Pharmaceuticals climbed 4.9 percent after its Chennai-based facility successfully cleared a U.S. FDA inspection, paving the way for continuous supply of active pharmaceutical ingredients to developed markets.
Sun Pharmaceutical Industries advanced 1.4 percent on receiving the U.S. health regulator approval to market a generic version of Sumatriptan Succinate injection. MindTree rose 1.5 percent after launching MWatch, an integrated IT infrastructure management services platform. Four Soft jumped 6.3 percent on bagging a contract from a Mexican company.
GAIL (India) rose a percent after the company reportedly signed a pact to evaluate the possibility of setting up two gas-fired power plants in Uttarakhand.
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