Market flattens ahead of Fed, ECB meets

It was the fourth straight trading session on Dalal-Street which saw the Indian equity markets end with gains. After no surprises from the Reserve Bank of India on Tuesday where the apex bank kept key interest rates unchanged, frontline Indian indices closed flat in a rangebound session today. Today’s modest gains were seen despite overnight losses in US markets and select Asian markets. Market did manage to gain ground in the mid afternoon trades. Profit booking in the Metals, Oil & Gas, Oil & Gas and select Telecom stocks kept those gains in check. The broader markets outperformed the benchmark indices as the Mid-Cap and the Small Cap stocks which were badly beaten down witnessed some bargain hunting. The BSE Mid-Cap index gained 1% while the BSE Small-Cap index rose 1.1%. The 30-stock BSE Sensex ended at 17,257, up 21 points over the previous close. The broader NSE Nifty closed at 5,240, up 11 points over the previous close. Cipla, Kotak Bank, Ambuja Cem, JP Associates, Reliance Infra and BHEL were the notable gainers on the Sensex and the Nifty today. Coal India, ONGC, Sesa Goa, Hero Motocorp, TCS and Tata Steel were among the losers on the Nifty. However, the RBI sounded its concerns and reduced the estimate of growth to 6.5% from 7.3%. Inflation is forecast at 7% at the end of the year, against earlier estimates of 6.5%. "Downbeat manufacturing data from China added to uncertainty ahead of two important central bank meetings of US and Europe this week. Participants are likely awaiting cues from global developments such as the US Federal Reserve’s interest rate decision and Federal Open Market Committee meeting on Wednesday and the European Central Bank meeting on Thursday," says Amar Ambani, Head of Research, IIFL. On the home front, the HSBC manufacturing Purchasing Managers' Index (PMI), which gauges business activity at India's factories but not utilities, fell to 52.9 in July, from 55.0 in June. Reports stated that export orders fell slightly for the first time in nine months. Manufacturing activity grew at a slower clip in July on the back of power outages, HSBC survey said. In global market action, Asian markets ended mixed with Japan’s Nikkei down 0.6%, China’s Shanghai Composite up nearly 1% and Singapore Straits Times up 0.5%. Hong Kong’s Hang Seng, South Korea’s KOSPI and Australia’s S&P/ASX 200 ended flat. Meanwhile, European markets were trading tad up with London’s FTSE up 0.55%, France’s CAC up 0.35% and Germany’s DAX trading flat. Cipla advanced after the Pharma company reported 1Q net profit up 52% on year at Rs.4.01bn that beat estimates. EID- Parry moved up after the company recorded profit in 1Q at Rs.224.7mn versus a loss of Rs.71.8mn in the same quarter a year ago. Radico Khaitan rose after its 1Q profit came in at Rs.211.1mn as against Rs.207.4mn in the same period a year ago. Bhushan Steel fell after its 1Q net income declined 1.9% on year to Rs.2.06bn, trailing estimates of Rs.2.84bn. Deccan Chronicle Holdings slipped to a new closing low after a financial services firm filed a forgery case against the promoters of DCHL leveling allegations of misrepresentation among other things. IDBI Bank declined after its 1Q net income of Rs.4.27bn trailed estimates of Rs.4.98bn.