Sensex ends with tepid gains

Major headlines

Export growth slows in July

Welspun Corp jumps on winning orders; the stock closes higher by 3.19%

Bajaj Auto August sales jump 55%; the stock ends 1.28% higher



Global signals

European markets traded on a flat note on Thursday (September 02, 2010), owing to caution ahead of the European Central Bank (ECB) interest rate decision and US pending home sales data.

All the major Asian indices closed in the positive terrain on Thursday except Jakarta Composite.

The US stock index futures indicate lower opening on the Wall Street today. The investors will focus on pending home sales data, initial jobless claims and factory goods orders data.

Indian indices

After rallying more than 200 points in the previous session and bouncing back from the lows of Tuesday (August 31, 2010), its seemed that the domestic markets turned into consolidation mode in today’s trade. However, selling pressure in the late trades wiped out most of the intraday gains in contrast to a strong start as the Indian indices ended the session with marginal gains. The indices climbed to its highest level in a week after the Finance Minister Pranab Mukherjee said that taxes paid by the companies increased, fueling speculation that the earnings will be good. One can also attribute this newfound confidence in equities to accelerating growth in the US and Chinese manufacturing data along with strong gross domestic product (GDP) data in European economy pushing the European indices higher. Small Cap and Mid Cap outperformed the Sensex.

The sugar sector did well today on reports of possible decontrol in sugar prices. Housing Development Finance Corporation, HDFC Bank and ITC were major gainers in the Sensex. Sterlite Industries, the largest copper producer, gained on the second straight day.

The key benchmark index - Sensex started the session 10 points higher at 18215 (day’s low) taking lead from the strong US markets and healthy Asian indices. The Sensex went on rising hitting the day’s high of 18356 in initial trades as Asian markets continued to trade higher. As the session progressed, the index traded in a very narrow range. The Sensex continued its rangebound trade in the afternoon session as the European markets did not show much movement at its opening. However, in the late trades, the Sensex pared most of its gains as selling intensified in heavyweights.

At the finishing line, the Sensex closed at 18236, 32 points higher. The Nifty closed at 5486, higher by 14 points.

Bond market update: India’s 10-year bonds dropped for a second day before a sale of Rs120 billion ($2.6 billion) of government securities tomorrow, which may leave investors with less cash to buy debt. India’s rupee was little changed as speculation of an increase in offshore capital inflows into local shares was offset by concerns about the widening trade deficit.

Market Outlook: We have unemployment claims, pending home sales and factory orders data in US today.

Market sentiment

The market breadth was strong as advancing stocks outpaced the declining ones. Of the 3,055 scrips traded on the BSE, 1,848 scrips surged while 1,085 scrips declined. Hundred and twenty-two shares remained unchanged.

Sectoral & stock screening

Consumer durables (CD) drew investors’ interest with the BSE CD up by 1.10%. Fast moving consumer goods (FMCG) and banking scrips were up with the BSE FMCG and the BSE Bankex rising by 0.79% each. The top loser in the sectoral index was BSE Information Technology (IT), down by 0.67%, followed by BSE TECk that declined by 0.64%.

Among 'A' group stocks, Suzlon Energy was the major gainer, up by 10.19%, followed by Gujarat NRE Coke that surged by 7.60% and Indian Overseas Bank that rose by 6.53%. Among the losers, Hindustan Copper fell by 4.10%, followed by Hero Honda Motors that slid 3.35% and Adani Enterprises that lost by 2.90%.

Viewing volumes

Wind turbine major- Suzlon Energy traded the most with over 1.27 crore shares changing hands on the BSE, followed by pharma company - Piramal Healthcare (1.24 crore shares), leading integrated steel makers - Ispat Industries (1.06 crore shares), sugar major - Shree Renuka Sugar (0.37 crore shares) and India’s second largest developer - Unitech (0.31 crore shares).