Sensex struggles in dull trade...Nifty flat on F&O expiry

The F&O expiry session turned out to be quite tepid to say the least with the main Indian equity indices closing nearly unchanged. Today’s session was unusually low on volatility and lacked any specific direction right from start to end, with the NSE Nifty gyrating in a narrow trading band. The struggle for direction today came in the wake of Standard & Poor's move to lower the outlook on India's debt ratings to 'negative' from 'stable'. Indecisive Asian markets and renewed weakness in European markets added to the uncertainty. The BSE Sensex ended at 17,131, down 21 points or ~0.12% over the previous close. It had earlier touched a day’s low of 17,084 and a day’s high of 17,193. It opened at 17,191. The NSE Nifty settled at 5,189, down 13 points or 0.25% over the previous close. It touched a day’s low of 5,179 and day’s high of 5,215. Out of the 50 stocks in the Sensex notable losers were Gail India, Hero Motocorp, Hindalco, Tata Power, Bajaj Auto and Sterlite Industries. Among the major gainers were, Coal India, Jindal Steel, TCS, RIL and ITC. Market breadth was weak as the Small-Cap index and the Mid-Cap index on the BSE also ended with a negative bias. The INDIA VIX on the NSE ended lower today by 1.1% to close at 18.74. The BSE Power index was the top loser, the index fell by 1.5%, followed by Realty, Auto, PSU and Banking indices. The IT index and the FMCG index were the top gainers adding 0.4% and 0.3%, respectively. "The undertone remains cautious as FII selling continues to put pressure on the market sentiment amid lack of clarity on the GAAR issue and the Vodafone tax controversy. Sticky inflation, widening twin deficits, policy impasse and global economic slowdown are among the other headwinds confronting the Indian markets. The 200 DMA has now become a critical point for the Nifty. It is placed at 5132 levels. A close below the 200-DMA could aggravate the selling pressure. The market's recent resistance will be tested if the Government continues to dither on reforms in the name of coalition compulsion. The cloudy outlook can improve if there is some movement on reforms in the coming days. But, given the track record of UPA II its like asking for too much," says Amar Ambani, Head of Research, IIFL. Globally, Asian markets were a bit cautious, the Nikkei index ended flat, while the Hang Seng index rose by 0.8%. European markets opened flat to higher but erased much of the early gains after a key economic sentiment index for the euro area fell more than expected in April. European indices have gained smartly over the past 2-3 years. The Federal Reserve on Wednesday left its key interest rates unchanged while reiterating its pledge to do more in a bid to sustain the ongoing recovery. In addition, Fed Chairman Ben S. Bernanke has said that the US central bank is ready to add to its stimulus if necessary. Yes Bank finished down 2.5% to Rs. 357.10 after about 2.9% of its equity was transacted in 2 block deals. EID Parry ended up 0.1% at Rs. 180.55 after 4Q group net income stood at Rs.1.38bn up 73% on year. Indiabulls Real Estate climbed 2.1%to Rs. 62.40 after 4Q profit increased three-fold on year to Rs. 560mn. Idea Cellular advanced 4% to Rs. 83.30 ahead of the company’s 4Q results which are estimated to come in at Rs.2.5bn. Mangalore Refinery rose 0.4% to Rs. 61.65 after it was given a court order to receive 31% of its water requirements that may allow it to operate parts of plant in southern India which was shut due to water shortage. Tata Metaliks surged 7.9% to Rs. 69.35 after 4Q profit came in at Rs. 149mn versus a Rs. 500,000 loss in the same quarter a year ago. United Spirits spurted 5.9% to settle at Rs. 782.40 extending Wednesday’s gains triggered by reports that beverage company Diageo was in talks to buy a stake in United Spirits. However, United Spirits said the report was factually incorrect. Bharat Electronics lost 1% to close at Rs. 1,465.95, after the company deferred its stock buyback proposal. The company’s 4Q net income came in at Rs.3.34bn versus Rs.4.48bn in the same quarter a year ago. However, the figure beat estimates of Rs.2.81bn. Nestle India declined 4.2% to finish at Rs. 4,731.30 after the company reported 1Q profit at Rs.2.76bn trailing estimates of Rs.2.99bn estimates. Sterlite Industries moved down 2.3% to end at Rs. 105.35 after 4Q net income fell 34% on year to Rs. 12.8bn falling behind estimates of Rs. 13.3bn.