Sensex ends flat in dull session...Nifty holds 5300

After showing some strength in the previous trading session, the Indian stock benchmarks closed nearly unchanged at the end of another lackluster trading day. Overnight losses in the US market and weakness in the Asian markets dragged the key indices lower at open. However, the frontline indices recovered gradually after hitting intra-day lows in early trades. Markets could not sustain the momentum and surrendered intraday gains towards the close of trade, as investors continued to be cautious ahead of important events such as corporate earnings, IIP data, inflation report, monsoon's progress and the month-end RBI policy meeting. The market breadth was weak today, as the broader indices too were under some pressure today after out-performing the Large-Cap shares in the past few sessions. Realty, Metals, Consumer Durables and Capital Goods indices were the major laggards. On the hand, the FMCG and Banking indices were the top gainers. The Sensex ended at 17,374, down 17 points or 0.1% from the previous close. It had earlier touched a day’s high of 17,554 and a day’s low of 17,425. It opened at 17,546. The NSE Nifty settled at 5,316, down 10 points or 0.2% over the last close. It touched a day’s low of 5,287 and day’s high of 5,327. It opened at 5,324. Jindal Steel, Sesa Goa, Maruti, Asian Paints, Sterlite Industries, DLF, Tata Power, L&T and Infosys were the notable losers on the Sensex and the Nifty today. ICICI Bank, M&M, Hindustan Unilever, HDFC, Cipla, TCS, ITC, Coal India, BPCL and Dr Reddy’s Labs were among the gainers on the Nifty. The INDIA VIX on NSE fell by 1.7% to close at 18.04. It hit day’s high of 18.63 and a day's low of 18.04. In Asian trading, most stock indices closed lower barring China, as lingering worries about the deteriorating global economic backdrop countered the monetary easing announced by the European Central Bank (ECB), the Bank of England (BOE) and China's central bank. China's Shanghai Composite index witnessed a late surge and closed ~1% higher. Most Asian indexes posted losses for the week. Investors feared that the latest policy easing by the world's leading central banks won't be enough to bolster the fragile global economy. Cautious comments from the ECB president Mario Draghi about the precarious state of the eurozone economy and jitters ahead of the US monthly jobs report on Friday also forced investors on the sidelines. The ECB and the People’s Bank of China cut their benchmark borrowing costs yesterday, while the Bank of England (BOE) expanded the size of its asset-purchase program. “Downside risks to the euro-area economic outlook have materialized,” ECB President Mario Draghi said yesterday after cutting the main refinancing rate by a quarter-percentage point to a record low of 0.75% and reducing interest on overnight deposits to zero. “Economic growth in the euro area continues to remain weak with heightened uncertainty,” he said, adding that the rate cuts may have only a muted effect. The euro is headed for its biggest weekly decline in more than six months amid signs that the region’s debt crisis is curtailing economic growth. The euro is poised for a 2.3% drop this week, the sharpest decline since the five-days ended Dec. 16. The 17-nation currency held a two-day fall against the yen. A downbeat report on the US services sector activity along with disappointing retail sales added to the ongoing worries about global economic growth. The reports come ahead of Friday’s closely watched jobs report from the Labor Department. Economists expect nonfarm payrolls to increase by 100,000 in June compared with 69,000 in May. "Sometimes markets behave in a bizarre fashion, confounding most pundits. The reaction of world equity markets to monetary easing by three top central banks falls in this category. Major global stock indices have lost ground despite the monetary stimulus unleashed by central banks in China, Europe and the UK to contain the global economic mess," said Amar Ambani, Head of Reseach, IIFL. "The Rupee remains under pressure as overseas investors are not convinced about ongoing attempts to shore up growth. Foreign investors are perhaps waiting for more decisive action, which is unlikely this month due to the looming Presidential election," he said. "As always, the month-end RBI policy meeting will be important in the wake of fresh policy easing done by other central banks. Before that, we will have to contend with data on industrial production and WPI inflation. Progress of monsoon and corporate earnings are among the other key variables," said Amar. "Friday’s monthly jobs data out of the US will be closely tracked to gauge the state of the world’s largest economy. The US employment report due on Friday will likely show more jobs added than in April or May, but the pace will still be sluggish, according to majority of the economists," he added.