W-shaped recovery…Nifty regains 5150

Indian markets ended with modest gains on Wednesday after a volatile day. Markets took a hit after industrial output data showed a drop in March at 13.5% from 15.1% in February. Economists had forecast a reading of ~15%. Industrial production had grown by 16.7% and 17.7% in January and December.

However, as the day progressed, "markets showed some resilience as compared to its international peers. The benchmark indices managed to stage a smart come back with the key indices managing a W-shaped recovery", says Amar Ambani, Vice President Research IIFL. Pharma, FMCG and Banking stocks were among the major gainers.

Telecom stocks were battered for a second day running after TRAI said that telecom companies will have to pay a one-time fee running into crores of rupees for holding 2G spectrum in excess of 6.2 MHz. Aggressive bids by telcos in the ongoing 3G auction has also raised concerns about the financial health of the telecom operators.

In addition, stocks like Infinite Computers shone on account of impressive earnings, while Bajaj Auto slipped despite Q4 net profit quadrupling.

The BSE Sensex advanced 54 points to end at 17,195 and NSE Nifty gained 20 points to close at 5,157. Among the 30 components of Sensex, 19 ended in the positive terrain and 11 ended in the red.

Markets in Asia ended mixed; the Nikkei in Japan was down 0.2%, Australia's S&P/ASX was up 0.5%, the Hang Seng index in Hong Kong was up 0.4% and Shanghai SE Composite was down 0.3%.

European indices were trading with mixed, the DAX in Germany was flat, the CAC 40 index in France was up 0.2% and the FTSE in the UK was down 0.4%.

Among the BSE sectoral indices, BSE Pharma index was the top gainer, the index gained 1.6% followed by BSE FMCG index up 1.5% and BSE Consumer Durables index up 1%. On the other hand, BSE Teck index was down 0.6% and BSE Power index down 0.4%. Even the Mid-Cap index ended flat and the Small-cap index fell 0.4%.

Outside the frontline indices, the big gainers in the broader market were Jubilant Org, Neyveli Lignite, Union Bank and Allahabad Bank. On the other hand, losers included Gujarat NRE, Piramal Health, Jain Irrigation and TTML.

Shares of Rural Electrification Corp. Ltd. (REC), Adani Enterprises Ltd. and Piramal Healthcare Ltd. were in demand on Wednesday after they were added to the MSCI India Index. Idea Cellular has been removed from the MSCI India index.

REC ended with smart gains, however, shares of Adani Enterprise and Piramal healthcare erased early gains and ended in the red. Idea also fell 8.2% to end at Rs54.80.

MSCI also added 51 Indian stocks in the Global Small-Cap indices while removing 12 stocks from the index.

These changes result from the May 2010 Semi-Annual Index Review and will come into effect from May 26.

Forty-two securities were added to and 45 securities were deleted from the MSCI Global Standard Indices.

Five hundred eleven securities were added to and 188 securities were deleted from the MSCI Global Small Cap Indices.