Indian stock markets witnessed a fairly stable day of trade on Tuesday as sanguinity got reinforced with the wilt in international crude oil prices on reports that OPEC was likely to enhance oil production in the bid to curtail spiraling prices. On the political front efforts were on between ruling UPA allies Congress and the DMK to come to a solution on seat sharing tussle ahead of elections in Tamil Nadu. While optimistic leads from the global front too supported domestic sentiments as investors at large traded with conviction as they scouted for attractive bargains after the recent sharp sell-off in equities since oil prices showed some signs of cooling in the session. The NSE's 50-share broadly followed index, Nifty jumped over a percentage point by the end of trade to regain the crucial 5,500 support level while the Bombay Stock Exchange's Sensitive Index, Sensex accumulated over two hundred points to settle around the 18,450 mark. The broader markets too snapped the day in the positive territory but failed to outperform the larger peers as the BSE's midcap index went home with 0.97% gains while the smallcap index climbed 0.76%. On the BSE sectoral front, Information technology counter witnessed hefty buying as it garnered around 2% as stocks like Tech Mahindra and Infosys amassed 9.26% and 2.53% respectively. The oversold Air line stocks, which drifted sharply during the last one month mainly due to increase in oil prices that accounts for a third of the total operational expenses of an airline, rallied in today's session as a slight fall in international crude prices lifted sentiments. Stocks like Jet Airways, Kingfisher Airlines and SpiceJet spurted 3.78%, 4.90% and 7.87% respectively. Telecom stocks also gained traction after telecom minister Kapil Sibal asked service providers to soon sink the differences amongst them as it could adversely impact growth of the sector. The telecom bellwether Bharti Airtel zoomed 3.16%, top gainer on the Sensex, while others like Idea Cellular and MTNL respectively amassed 3.51% and 2.82%. There remained no laggard in the BSE sectoral space however, Hero Honda remained the top loser on the Sensex after reports that Hero Investments would be buying Honda Motors' 26 percent stake in Hero Honda Motors for around $851 million in a deal that will see the Japanese automaker exit its joint venture in India after more than 26 years.
On the global front, all Asian equity indices settled in the green zone as crude prices eased a bit under $105 a barrel, but the gains remained limited as political unrest continued to shake the regime of Libyan leader Muammar Gaddafi as well as the country's oil fields. Hong Kong's benchmarks, Hang Seng remained the top gainer in the space as it went home after soaring well over one and half a percentage point. The European markets though exhibited mixed trend with CAC 40 climbing around half a percent, being the top gainer. On the other hand, the screen trading for US index futures indicated that the Dow could open on a positive note.
Earlier on Dalal Street, the benchmarks got off to a quiet start this morning after tumbling over 250 points on Monday on the back of geo-political concerns, rising oil prices and domestic political turmoil, as investors remained watchful given that the cues from overnight US markets too remained subdued. However the frontline indices gained traction immediately after the flat start as crude oil prices showed some signs of easing in the early hours. After gyrating in a narrow band for a long time, the market moved higher in late afternoon trade as investors resorted to hefty buying in fundamentally strong and beaten down shares and eventually snapped the day with gains of over a percentage point. Volumes for the markets remained on weaker side at over Rs 1.02 lakh crore while the turnover for NSE F&O segment too was abysmal at over Rs 0.89 lakh crore. Market breadth improved on late bargain hunting and remained positive as there were 1777 shares on the gaining side against 1059 shares on the losing side while 125 shares remained unchanged.
On Charts: The S&P CNX Nifty today closed above the 5460 levels which was very crucial on weekly chart. The index may face strong resistance around 5,540 levels if it breaks that next levels will be around 5630 mark. On the other hand, support will be around 5,452 and 5402 mark.
Finally, the BSE Sensex surged by 216.98 points or 1.19% to settle at 18439.65 while the S&P CNX Nifty gained 58.75 points or 1.08% to end at 5521.90.
The BSE Sensex touched a high and a low of 18466.81 and 18,266.62, respectively. The BSE Mid-cap and Small-cap indices gained 0.97% and 0.76%, respectively.
Bharti Airtel up 3.16%, Tata Motors up 2.91%, ONGC up 2.90%, Infosys up 2.53% and Jaiprakash Associates up 2.37% were the major gainers on the Sensex.
On the flip side, Hero Honda down 0.77%, Maruti Suzuki down 0.65%, ITC down 0.35%, and Tata Power down 0.04% were the only losers on the index.
Global financial services firm Morgan Stanley has scaled down its growth forecast for India's GDP in the fiscal year starting this April to 7.7%, which is its second cut since late January, as it expects domestic demand growth to be slower than earlier estimates. Earlier, the investment bank had lowered its expectations for economic expansion to 8.2% in the year ending in March 2012, from 8.7% it had forecast earlier.
In contrast, the government in its annual budget last week said that it expects India's economy to grow at 9%, plus or minus 0.25%, in the next financial year. The figure is much higher than what the investment bank is expecting. It said that the central government may slow its expenditure growth to single-digit levels in 2011/12, adding private consumption growth is also likely to moderate as higher inflation erodes purchasing power and higher rates encourage savings.
Morgan Stanley also cut its growth forecast for fiscal year 2012/13 to 8.7% from 9% adding that the current growth challenges that India is facing are cyclical. It said "We believe that India will be back to transitioning toward higher sustainable growth of 8.5-9% from F2013 (FY13) onwards."
The main gainers in the BSE sectoral space were TECk up 1.98%, IT up 1.90%, Metal up 1.49%, Bankex up 1.48% and Realty up 1.35%. There were no losers in the BSE sectoral space.
A court of enquiry has been set up by Air Force against Wing Commander A.K. Thakur in order to probe the case in which he took bribe from foreign aviation manufacturing companies to facilitate prominent static display of their aircraft during the recently concluded Aero-India 2011 exposition.
A.K. Thakur, a transport aircraft pilot who was among IAF officers deployed to oversee the arrangements at the airshow, was allegedly caught demanding and accepting Rs 20,000 from the French company officials for helping them display their aircraft prominently during the four-day held in Bangalore in mid-February.
The enquiry is being headed by a group captain rank officer. It would investigate whether Thakur had similarly received bribes from other companies at the show. Meanwhile, Thakur has confessed to his crime after being apprehended. A likely punishment would be a summary dismissal of the accused if the court of inquiry upheld the charges against him.
The S&P CNX Nifty touched a high and a low of 5,530.55 and 5,464.75, respectively.
The top gainers on the Nifty were Bharti Airtel up 3.28%, Tata Motors up 3.12%, Suzlon up 3.12%, ONGC up 3.09% and HCL Tech up 2.68%.
The top losers on the index were Cairn down 1.80%, Hero Honda down 0.84%, GAIL down 0.74%, Reliance Power down 0.57% and Dr Reddy down 0.55%.
European markets were trading in the mix on Tuesday. France's CAC 40 increased 0.35%, Germany's DAX rose 0.05% and Britain's FTSE 100 declined by 0.18%.
All the Asian equity indices finished the day's trade in the positive terrain on Tuesday as crude prices eased a bit to under $105 a barrel, but the gains remained limited as political unrest continued to shake the regime of Libyan leader Moammar Gadhafi as well as the country's oil fields. Japanese Nikkei edged higher in the trade as investors covered short positions after sharp losses in the previous trading session. Moreover, Hang Seng surged more than one and a half percent as global oil prices showed signs of easing which triggered bargain hunting after Monday's losses.
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