Sensex consolidates further...Metal shares rally

The main Indian stock indices ended with modest gains on Wednesday, wiping out intraday losses after a positive start, as strength in select Metals, Realty, Capital Goods and Power stocks countered weakness in IT, FMCG and Oil & Gas stocks. It was the third straight day of consolidation for the Indian markets after last week's rally, as investors await the release of Q1 FY13 results, besides data on IIP and inflation. The RBI's month-end policy meeting is also likely to be crucial for the Indian markets. The Indian markets opened with a positive gap on account of overnight gains in the US and firm Asian markets. However, benchmark indices erased early morning gains after the European markets opened lower. Profit booking around 5320 levels dragged the Nifty to below the 5300 mark but the index managed to close just above it. The Sensex ended at 17,462, up 37 points or 0.2%. It had earlier touched a day’s high of 17,523 and a day’s low of 17,372. It opened at 17,473. The NSE Nifty settled at 5,302, up 14 points or 0.3%. It touched a day’s low of 5,273 and day’s high of 5,317. It opened at 5,310. Sterlite Industries, Sesa Goa, Jindal Steel, JP Associates, Bharti Airtel, Maruti, PNB, SAIL and Hindalco were the notable gainers on the Sensex and the Nifty today. ONGC, Asian Paints, Dr Reddy’s Labs, Kotak Bank, Wipro, Siemens and Coal India were among the notable losers on the Nifty. The INDIA VIX on NSE fell by 1.6% to close at 18.27. It hit day’s high of 18.83. It hit a day’s low of 17.48. The market breadth on the BSE was positive; 1771 stocks advanced and 1121 stocks declined. Oil & Gas, FMCG, IT and Pharma indices were among the major laggards. Once again the broader indices outperformed the frontline indices. The BSE Mid-Cap index gained 0.9% while the BSE Small-Cap index rose 0.9%. “Investors seemed to be cautious ahead of the policy meetings of the European Central Bank (ECB) and the Bank of England (BOE). They will also closely analyse the latest US monthly jobs report, due out on Friday, as the same can force the Federal Reserve to introduce yet another round of asset purchases. In the coming weeks, the Indian markets will be driven by the latest quarterly results. Latest data on IIP and inflation will also vie for investors' attention this month. One of the most important events will be held on the last day of the month. The RBI will take up a review of its monetary policy on July 31. A stubbornly high inflation, ballooning fiscal deficit, suppressed fuel prices and a weak rupee will make it difficult for the RBI to cut rates further,” says Amar Ambani, Head of Research, IIFL. Meanwhile, India’s services activity grew at a slightly slower pace in June compared to the previous month but still expanded for the eighth straight month as new orders picked up and hiring increased at the fastest pace in a year, according to a latest survey by HSBC Holdings and Markit Economics. The services purchasing managers' index (PMI) stood at 54.3 last month versus 54.7 in May. In global action, the Asian markets ended mixed. The Nikki index in Japan was up 0.4% while the Hang Seng index in Hong Kong and the Chinese markets ended flat with a slight negative bias. Australia's S&P/ASX index rose by ~1% while the Kospi in South Korea finished with slender gains. In Europe, the FTSE index in UK was down 0.2%, while the DAX index in Germany was down 0.6% and the CAC index in France slipped 0.5%. European banks were under pressure in the wake of the controversy surrounding the LIBOR scam. Energy shares declined after crude oil futures pulled back from five-week highs. Traded volumes were lower as Wall Street will be closed for the Independence Day holiday. The ECB is widely expected to ease it key rate by 25 basis points tomorrow while the Bank of England’s Monetary Policy Committee is expected to introduce another round of quantitative easing. Data released today showed that private-sector activity across the 17-nation eurozone kept up sharp contraction in June, but the pace slowed from May. The composite output index, which gauges performance of both the manufacturing sector as well as the service sector, rose to 46.4 in June from 46 in May. The flash estimate matched the May reading. Separately, China’s services industry activity in June declined, according to a business survey released on Wednesday. HSBC's China services PMI fell to a three-month low of 50.6 in June on a 100-point scale, down from 51.9 in May. A reading above 50 indicates expansion, while a sub-50 reading indicates contraction.