LACKLUSTER SESSION

Indian stock markets commenced the holiday truncated week on a lackadaisical note as the benchmark equity indices hardly budged from their previous closing levels on Tuesday. The key indices oscillated in an extremely tight range through the session as market participants remained on the sidelines lacking conviction amid the persistent worries over global financial stability. The sentiments took support from positive developments from Greece where PM Papandreou agreed to step down, clearing the path for a new government and ensuring it receives its next round of aid. However, reports that Italian government bond yields soared to their highest since 1997 as Italian Prime Minister Silvio Berlusconi defied pressure to step down, kept sentiments weak. But a weak coalition and doubts over Berlusconi's ability to push through austerity and reforms have heightened the unease in financial markets that Italy could need financial aid. The domestic markets sneaked out some gains by the end of trade tracking the European counters, which surged by over one and half a percent boosted by upbeat earnings announcement by Europe's blue-chips and on reports of an unexpected rise in German exports for a second month in September, helping Europe's largest economy weather the sovereign-debt crisis. Back home, sentiments were pressured by India's trade data which showed that nation's trade deficit widened to its four-year high level at $19.6 billion since decelerating western economies adversely hit India's exports performance. Meanwhile, most sugar stocks including Shree Renuka, Bajaj Hindustan, Balrampur Chini etc plunged in the session on reports that UP government has hiked Sugarcane prices by Rs 40 per quintal.
Earlier on Dalal Street, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the indices dropped into the red terrain sooner than later, lacking any significant upside cues. The indices moved only sideways thereafter but touched intraday lows in the late morning session. However, the frontline gauges managed to pare the losses and rise above the neutral line in the dying hours of trade and settled in close proximity with previous closing levels. Eventually the NSE's 50-share broadly followed index Nifty, settled with single digit gains below the crucial 5,300 support level while Bombay Stock Exchange's Sensitive Index Sense added merely seven points and closed above the psychological 17,550 mark. Moreover, the broader markets finished on a flat note in tandem with their larger peers. On the BSE sectoral space, the Consumer Durables index remained the top gainer in the space and settled with about a percent gains followed by the rate sensitive Oil & Gas pocket, which too went home with moderate gains. But the High beta Realty sector remained the top laggard in the space with over a percent cuts. The markets rose on weaker volumes of over Rs 0.92 lakh crore while the turnover for NSE F&O segment too remained on the lower side as compared to Friday at over 0.82 lakh core. The market breadth remained optimistic as there were 1,434 shares on the gaining side against 1,399 shares on the losing side while 131 shares remained unchanged.
Finally, the BSE Sensex gained 6.92 points or 0.04% to settle at 17,569.53, while the S&P CNX Nifty advanced by 5.15 points or 0.10% to close 5,289.35.
The BSE Sensex touched a high and a low of 17,632.23 and 17,455.22 respectively. The BSE Mid cap was index up by 0.21% and Small cap index down by 0.17%.
The major gainers on the Sensex were SBI up 1.70%, Tata Motors up 0.82%, Hindalco Industries up 0.47%, Sterlite Industries up 0.45% and Hindustan Unilever up 0.42%. While, Sun Pharma down 2.05%, DLF down 1.76%, Cipla down 1.43%, NTPC down 1.00% and Jaiprakash Associate down 0.88% were the major losers on the index.
The top gainers on the BSE sectoral space were Consumer Durables (CD) up 0.94%, Oil & Gas up 0.20%, Power up 0.19%, Capital goods (CG) up 0.15% and Bankex up 0.14%. While Realty down 1.38%, Health Care (HC) down 0.51%, Auto down 0.08%, Metal down 0.07% and FMCG down 0.02% were the major losers on the BSE sectoral space.
Meanwhile, the Reserve Bank of India's (RBI) deputy governor Subir Gokarn said, the RBI will stick to its exchange rate policy and the guidance provided on monetary policy would hold until further notice. 'We have repeatedly said that the rupee is now a floating currency within the boundaries of the regime of structural capital controls on debt inflows'. By adding further he said, 'there is no intent to intervene with a particular exchange rate target in mind.'
In the current year, rupee has been one of the worst performing currencies in Asia, it has fell by more than 9% against the American dollar. Today, rupee weakened by 18 paise to trade at Rs 49.28 against the dollar. On this, Gokarn said that the rupee's losses are due to global conditions and capital reallocations around the world have impacted many currencies.

The apex bank hiked its key policy rates for 13 times to tame high inflation which has been hovering around two digit mark for quite some time. However, RBI expects inflation to moderate from December 2011, which reduces the chances of another hike in short term lending and borrowing rates. Gokarn said it was unlikely to raise rates again in December and may remain on hold subsequently if inflation follows its projected trajectory.

'We gave the guidance two weeks ago. If we want to change the guidance we will change the guidance...Unless there is something dramatic that happens to change it, that guidance remains. So let us say, the guidance remains the same until further notice at this stage,' Gokarn said.
However, the government owned oil firms earlier this month raised petrol prices by almost 2.7%, the move, which is expected to reduce losses of oil firms, is likely to add pressure to stubbornly high inflation in Indian economy.  Earlier, RBI had said that it will only consider easing monetary policy if inflation falls below 7%. Experts from government and private sector are of the view that the RBI may consider reversing its tight monetary stance as inflationary woes start to recede next month.
The rupee plunged breaching the psychological barrier of 50 a dollar amidst a mood of negativity in the economy. The rupee has been depreciating on the back of debt crisis in European economies and fears of another slowdown in US. The uncertainties in the global economy were stronger than in 2009 when the rupee moved to similar low levels against major currencies. For more than a month, domestic foreign exchange markets were testing low levels the rupee could reach against the dollar.
The S&P CNX Nifty touched high and low of 5,304.25 and 5,252.00, respectively.
The top gainers on the Nifty were Cairn up 5.11%, Reliance Communication up 4.50%, Reliance Infra up 3.96%, Reliance Power up 3.06% and SBI up 1.77%. On the flip side, BPCL down 3.33%, Sun Pharma down 2.81%, IDFC down 2.79%, HCL Tech down 2.52% and DLF down 2.40% were the top losers on the index.
The European markets were trading in green. France's CAC 40 rose 1.52%, Britain's FTSE 100 up by 1.15%, and Germany's DAX increased by 1.71%.
Asian shares wiped off their earlier gains and ended the session on a weak note on Tuesday, weighed by concerns that surging bond yields could stifle debt-ridden Italy's fund raising ability and throw the euro zone deeper into financial turmoil, while Greece struggled to pick a new leader. Nikkei lost over a percentage point, weighed by a dive of almost 30 percent in scandal-hit camera maker Olympus as well as ongoing concerns over the euro-zone while, Chinese benchmark Shanghai Composite closed slightly lower as caution prevailed ahead of the release of the country's inflation data due the following day, with weakness in property issues offsetting gains in banking and energy stocks. Seoul shares too edged lower in the trade, pressured by falls in banks like KB Financial Group, with persistent concern over Europe's debt woes keeping investors cautious.