Sensex fails to hold 20K, ends flat

The Sensex touched 20000 levels in trade today but could not hold the same and shuts flat owing to sell-off in banking and realty shares

Major headlines

Hero Honda gears up on Honda's stake sale; the stock closes 17.99% higher

Ispat Industries rises as JSW Steel, JSPL in race for stake buy; the stock ends 10.64% up

Tata Chemicals to buy 100% stake in British Salt; the stock closes 0.46% higher



Indian indices

The Indian markets failed to hold on to intraday gains and ended the session on a flat note. The Sensex touched the 20000 levels in today’s trade but closed below those levels. The auto, technology, cement and select metal companies' shares along with Cipla, Housing Development Finance Corporation, Hindustan Unilever and Bharat Heavy Electricals supported the markets. Even Reliance Industries was quite supportive but wiped out its gains in late trade. The sell-off in banking and realty companies’ shares along with Oil & Natural Gas Corporation, Dr Reddy's Laboratories, Sterlite Industries, ITC, DLF, Larsen & Toubro and Ranbaxy Laboratories capped some gains.

Hero Honda shot up by 17.99%. The company said royalty payment to Honda would be at 3-5% of sales. All existing products will have no royalty after 2014 and royalty on new products will be in line with current rate. In the mid-cap space, Ispat Industries, ARSS Infrastructure Projects, CMC, Rashtriya Chemicals & Fertilizers and United Breweries gained by 7-12% while HCL Infosystems, Money Matters, KS Oils, United Phosphorous and Max India fell by 3.6-5%.

The Sensex started the session 95 points lower at 19770 owing to the discouraging set of cues on the Asian front and soon hit the day’s low of 19711. As the session progressed, the Sensex began to trim losses and turned positive in the afternoon session. The index extended gains tracking positive European markets and strength in auto and information technology (IT) space, hitting the day’s high of 20006. However, the index could not sustain that level and started to erase gains to close the session on a flat note.

At the closing bell, the Sensex shut 24 points higher at 19889 and the Nifty closed mere two points lower at 5947.

Bond and Rupee update: India’s 10-year bonds rose as the central bank’s plan to repurchase Rs480 billion ($10.5 billion) of debt over the next month helped offset the impact of a cash shortage in the banking system. India’s rupee traded at a one-week low as military tension on the Korean peninsula damped demand for emerging-market assets.

Market sentiment

The market breadth was positive as rising shares outnumbered the declining ones. Out of the 2,991 stocks traded on the BSE, 1,499 gained while 1,317 fell. Hundred and seventy-five stocks traded unchanged.

Sectoral & stock screening

Of the 13 sectoral indices, five ended in green, while rest eight shut in red. Among gainers, BSE Auto was the biggest gainer rising by 2.30% followed by BSE IT up by 1.73% and BSE TECk gained by 0.85%. On the flip side, BSE Bankex was the major loser declining by 1.39%, followed by BSE Realty down by 1.37% and BSE Healthcare (HC) fell by 0.85%.

Among 'A' group stocks, top three gainers - Hero Honda Motors gained by 17.99%, EIH rose by 5.85% after SEBI okays its rights issue and Rashtriya Chemicals & Fertilizers advanced by 5.67%. Top three losers - United Phosphorus slid by 4.60%, Dr Reddy's Laboratories declined by 4.31% and Indiabulls Real Estate lost by 3.31%.

Viewing volumes

Industrial finance company - IFCI was traded the most, with over 1.28 crore shares changing hands on the BSE, followed by state-run fertiliser firm - Rashtriya Chemicals & Fertilizers (0.57 crore shares), wind turbine major - Suzlon Energy (0.35 crore shares), sugar major - Shree Renuka Sugars (0.23 crore shares) and state-run power utility firm - Power Grid Corporation of India (0.20 crore shares).

Global signals

The European equities inched higher in thin year-end trading, helped by firmer utilities and automobile shares. However, tensions in the Korean peninsula and the lingering euro zone debt crisis capped some gains.

All the major Asian markets closed on a negative note owing to tensions in the Korean peninsula. China’s Shanghai Composite ended down over 1%.

The US stock index futures point to a higher opening on the Wall Street. The investors will keep an eye on the fourth-quarter financial results of Adobe.

Market Outlook: There is no major data in the US tonight.