Nifty ends below 5400…Realty, Bank shares sink

Indian equity benchmarks closed modestly lower at the end of another quiet session, as political gridlock in parliament offset healthy FII inflows. Weakness in the global markets also weighed on the sentiment amid uncertainty about further policy intervention by leading central banks. Trading volumes continue to be low in US and European markets. Investors are also cautious ahead of crucial meetings between the Greek prime minister and leaders of Germany and France. Part of the minor pullback could also be attributed to profit booking after four weeks of gains. The NSE Nifty ended below 5,400 after having crossed the milestone earlier in the week. The Sensex lost ~0.5%. The broader indices too finished in the red, dragging the market breadth into negative territory. Realty and Banking sector indices were the top laggards followed by Power and Capital Goods. FMCG and Pharma indices managed to buck the negative trend. Rest of the sectoral indices were flat to marginally down. The BSE Sensex ended at 17,783, down 67 points over the previous close. It had earlier touched a day's high of 17,822 and a day's low of 17,725. It opened at 17,790. The NSE Nifty closed at 5,386, down 0.5% over the previous close. It earlier touched a day’s high of 5,399 and a day’s low of 5,371. It opened at 5,395. The BSE Small-Cap index and BSE Mid-Cap index were down 0.8% and 0.6%, respectively. Tata Steel, Jindal Steel, Hindalco, ICICI Bank, RIL, M&M, Tata Power, NTPC, Infosys, BHEL, Reliance Infra, DLF, JP Associates and Axis Bank were the top losers in the two main indices. ONGC, Coal India, BPCL and Maruti were the biggest losers in the two key indices. The undercurrent was a wee bit cautious due to a fall across global equity markets. Expectations for a quick stimulus from the Federal Reserve faded after one of the Fed officials opposed QE3 while data out of China and eurozone pointed to a stalling global economy. Stocks in the US slipped on Thursday amid doubts over further monetary stimulus. Asian and European markets were mostly down today as well. US reports on weekly jobless claims and 'flash' manufacturing PMI also turned out to be disappointing. However, investors in the Indian markets can take heart from strong FII inflows. The Sensex is up ~15% this year, buoyed by strong FII inflows. Foreign funds bought Indian shares worth US$22.31mn on Aug. 22, the 17th consecutive day of net purchases. FIIs have poured in US$11.5bn into Indian equities this year, according to the latest data from market regulator SEBI. That is the most this year among 10 Asian markets. China’s stocks fell, extending weekly losses, after PetroChina Co. posted a decline in profit and reports said that the government was studying further measures to strengthen its control of the property market. Japan’s currency headed for its biggest weekly advance against the dollar in 12 weeks. Gold futures retreated from a four-month high in electronic trading on Friday, but appeared set to post strong gains for the week buoyed by hopes of fresh stimulus by leading global central banks. Rupee dropped to 55.39/40 vs its previous close of 55.26/27, after four sessions of gains, tracking a weaker global risk sentiment. The rupee snapped a four-day rally after the RBI said that the nation’s budget and current-account deficits must be reined in. The rupee has pared this week’s gain to 0.6%. The currency has lost 4.3% this year. Meanwhile, the RBI says in its Annual Report that fighting inflation remains the cornerstone of its monetary policy. The RBI wants the Government to cut subsidies and step up in capex. It also wants the Centre to address widening twin deficits. GDP growth during FY13 is expected to stay below trend while inflation will be sticky ~7% with upside risks, according to the RBI's annual report.