Sensex, Nifty survive IIP scare

Indian markets extended last week's advance as the NSE Nifty surged past the 5400 levels for the first time since February 6, 2008. The BSE Sensex also flew past the 18,000 mark in the early trades. However, the euphoria was short lived as bulls were stunned to see a surprisingly weaker-than-expected IIP data.



The main indices pared early gains after the release of the IIP numbers. India's industrial output stood at 11.5% in May as against consensus estimates of 15-16%. Also, the Government pruned April's figure to 16.5% from 17.6%. The

Finally, the Sensex advanced 103 points or 0.6% to end at 17,937 after being as high as 18,010.

The Nifty rose 31 points or 0.6% to end at 5,383. It had earlier been as high as 5,402. This was the highest closing for the Nifty since Feb. 5, 2008.

"The Nifty has surpassed 5400 earlier also but has failed to stay above it for a sustainable period. So, it remains to be seen whether the Nifty manages to hold its own and stays above 5400 this time around. If indeed it does, the next stop the bulls are betting on is 5500," says Amar Ambani, Vice- President, Research, IIFL.

Within the Sensex and Nifty, the leading gainers were DLF, Unitech, Tata Motors, Wipro, TCS, BHEL, HDFC Bank, ICICI Bank, Idea and Cairn India.

The notable losers included the likes of Reliance Infra, Hero Honda, RCOM, ONGC, ACC and Maruti.

The broader market ended in the positive terrain, with the BSE Small-Cap index and the BSE Mid-Cap index up 0.6% and 0.3%, respectively.

On the BSE, Real Estate, Banking and IT indices were among the top gainers rising by 1-2.25%. Consumer Durables, Oil & Gas, Pharma and FMCG indices closed in the red. Select Telecom, Media, Capital Goods, Metals and Power stocks advanced while Auto shares were generally subdued.

Outside the frontline indices, the big gainers in the broader market were Marg, Polaris, Bajaj Electricals, Mahindra Lifespaces, Educomp, Opto Circuits, Jet Airways, Rolta, GSFC, Peninsula Land, future Capital, Gateway Distriparks and Dena Bank.

On the other hand, top losers included Tata Elxsi, Raymond, Provogue, Subex, Cox & Kings, Monnet Ispat, BPCL, Balrampur Chini, Bajaj Holdings, Renuka Sugars, Marico, Triveni Engineering and United Bank.

In global markets, Japan's stock market erased earlier gains in the wake of an election setback for the country's ruling party. The Nikkei Stock Average and the broader Topix each ended down about 0.4% each to close at 9548 and 857, respectively.

The yen weakened to a two-week low against the dollar on concern that efforts to cut Japan’s government debt will slow after the ruling party lost control of the upper house.

The MSCI Asia Pacific Index dropped 0.3% to 115.84 as of 4:53 p.m. in Tokyo. The benchmark has slumped 10% from its high this year on April 15.

Stock benchmarks rose elsewhere in Asia, except for Taiwan, which finished little changed at 7639.

China’s Shanghai Composite Index rose 0.8% to end at 2490 after starting the day in red. The Shanghai Composite climbed 3.7% last week, the most this year. It has slumped 24% in 2010.

The Hang Seng in Hong Kong rose 88 points or 0.4% at 20,467 while the Kospi in Seoul gained 11 points at 1734.

The S&P/ASX 200 index in Sydney advanced 13 points to 4409 and the Straits Times in Singapore was up 8 points at 2925.

European shares started with gains, extending last week's advance, but soon turned choppy ahead of the first batch of earnings in the US.

The Stoxx Europe 600 Index slipped 0.1% to 249.78 as of 10:55 a.m. in London, having swung between gains and losses at least four times. The measure surged 5.4% last week, the biggest rally in a year.

The UK's FTSE 100 index rose 11 points at 5144 while the German DAX index was nearly flat at 6067 and the French CAC-40 index lost 6 points at 3547.

Futures on the Standard & Poor’s 500 Index dropped 0.5% today. Alcoa is due to become the first member of the Dow Jones Industrial Average to report second-quarter earnings when it releases results after the close of New York trading. A total of 23 companies in the S&P 500, including Google and Citigroup will report earnings this week.

Copper, aluminum and oil retreated. The euro depreciated 0.5% against the dollar and the yen declined 0.3% versus the US currency.