Benchmarks witness consolidation ahead of Budget week

Defensive sector FMCG also witnessed a sharp cut of around one and half a percent

After witnessing biggest sell-off since July 2012 in previous session, key Indian benchmarks ended the session on a flat-to-negative note on last trading day of the week as sentiments remained cautious ahead of the Union Budget and Economic Survey of India to be released in the coming week. Markets traded choppy in first half as sentiments remained jittery after President Pranab Mukherjee, while addressing the joint sitting of the two Houses of Parliament, said that inflation is easing gradually, but is still a problem and expressed his hopes of recovery in economic growth. However, recovery witnessed in mid-noon trade proved short-lived as market participants booked all their gains at the end shrugging off firm cues from European counters.

On the global front, European markets traded on a positive note after better-than-expected German business confidence data. German business confidence rose to its highest level in 10 months in February, amid growing optimism that Europe's top economy has put the worst of the region's debt crisis behind it. Asian markets also recovered from Thursday’s sell-off after weak business conditions in US supported hopes that the Federal Reserve may not discontinue its economic stimulus earlier than expected.

Back home, selling in Aviation sector too dampened the sentiments as Jet Airways and Spicejet edged lower on concerns of increased competition after Malaysian budget carrier AirAsia recently announced the launch of its new airline in India in partnership with the Tata Group. Defensive sector FMCG also witnessed a sharp cut of around one and half a percent, while the metal stocks remained under pressure for the second consecutive day, losing another half a percent.

However, the losses remain capped as investors kept themselves busy in piling up positions in software and technology counters on the back of Gartners’ report that healthcare providers’ spending on IT will increase by seven percent this year. Meanwhile, high beta realty bounced back, gaining over one and half a percent for the day, though the housing ministry looks determined to introduce the pending legislation in Parliament’s budget session to set up a real estate watchdog, the private developers associations have disapproved the proposal saying that realty watchdog is only going to increase the number of clearances and checks, leading to further delay in housing projects.

Rally in telecom stocks too supported the sentiments as scrips like Bharti Airtel, Idea Cellular, MTNL, Tata Teleservices (Maharashtra) and Reliance Communications all edged higher after the Ministry of Communications & Information Technology on February 21, 2013, said that the Department of Telecom has decided that a separate auction will be held for the balance of Spectrum in 1,800 MHz band in compliance with the direction of the Supreme Court in its order dated February 15, 2013.

The NSE’s 50-share broadly followed index Nifty declined by only two points, managed to hold the psychological 5,850 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined ten points to finish below the psychological 19,3500 mark. Moreover, broader markets too traded near their pre-close mark and managed to keep their head above water in the end.

The overall volumes stood above Rs 1.42 lakh crore, which remained on the lower side as compared to that on Thursday. The market breadth remained in favor of declines as there were 1,043 shares on the gaining side against 1,072 shares on the losing side while 879 shares remain unchanged

Finally, the BSE Sensex lost 8.35 points or 0.04% to settle at 19,317.01, while the CNX Nifty declined by 1.95 points or 0.03% to end at 5,850.30.

The BSE Sensex touched a high and a low of 19,401.75 and 19,289.83, respectively. The BSE Mid cap index up by 0.02% and Small cap index was up by 0.11%.

The top gainers on the Sensex were, Bharti Airtel up by 4.64%, Wipro up 2.43%, Sun Pharma up 1.96%, ICICI Bank up 1.22% and Infosys up 1.06%, while Hindustan Unilever down by 2.60%, Coal India down by 2.31%, Maruti Suzuki down by 2.09%, HDFC down by 1.84% and Tata Motors down by 1.60% were the top losers on the index.

The top gainers on the BSE Sectoral space were Realty up 1.35%, TECK up 1.33%, IT up 0.83%, Health Care up 0.78% and Oil & Gas up 0.58%, while FMCG down 1.41%, Auto down 0.55%, Metal down 0.53%, PSU down 0.29% and Consumer Durables down 0.15% were top losers on the sectoral space.

Meanwhile, to make the capital goods industry more competitive globally, the Department of Heavy Industry (DHI) has planned to consider a policy particularly focusing on capital goods sector. DHI Secretary M F Farooqui said, the department will examine developing a policy specifically targeting the beleaguered capital goods sector and after examining the policy issues, the department would make recommendations to achieve the target of 17% growth in the sector as envisaged in the 12th Five-Year Plan.

The capital goods industry, which constitutes heavy machinery including machine tools, currently, contributes about 12% to the total manufacturing activity. The Indian capital goods sector gives employment to 14 lakh people, has an important bearing on the growth of the user industries. The sector's growth has been decelerating in the recent years as the capital goods manufacturers have not been able to effectively tap global opportunities due to major issues faced by them like high interest rates, tax structure, reduction in custom duties and unregulated second-hand machinery imports. 

The DHI expressed the need to encourage innovation and build competitiveness for the industry as this is the key sector for business expansion as well as it provides the sustenance for a large group of people. Further, the department also urged the government to consider giving the sector the same kind of support provided to the automotive sector.

The CNX Nifty touched a high and a low of 5,873.80 and 5,835.80 respectively. 

The top gainers on the Nifty were Bharti Airtel up by 4.51%, DLF up 3.51%, Wipro up 2.65%, PowerGrid up 2.25% and Sun Pharma up by 1.57%.

On the flip side, the top losers of the index were, HUL down by 2.79%, Coal India down by 2.69%, JP Associates down by 2.23%, Maruti down by 2.13% and HDFC down by 1.85%.

The European markets were trading in green, France’s CAC 40 up by 1.29%, United Kingdom’s FTSE 100 up by 0.73% and Germany’s DAX up by 0.51%.

Asian equity markets ended mixed on Friday after recovering from earlier session's steep falls as investors took some comfort from the Federal Reserve's commitment to ultra-soft monetary policy for now, but weak US and European data capped Friday's recovery. Meanwhile, Japan’s Nikkei closed higher, recovering from Thursday's drop. China’s Shanghai Composite went home with red mark after extending yesterday’s decline, as new home prices rose in most cities for third month, adding pressure on leaders to intensify policy-tightening to prevent asset bubbles.

Asian Indices	Last Trade	Change in Points	Change in %
Shanghai Composite	2,314.16	-11.79	-0.51
Hang Seng	22,782.44	-124.23	-0.54
Jakarta Composite	4,651.12	18.72	0.40
KLSE Composite	1,622.08	8.03	0.50
Nikkei 225	11,385.94	76.81	0.68
Straits Times	3,288.13	0.53	0.02
KOSPI Composite	2,018.89	3.67	0.18
Taiwan Weighted	7,947.72	-9.74	-0.12