Sensex ekes out slender gains…IT shares gallop; ITC down

The frontline Indian stock indices ended with modest gains on Thursday amid some choppiness in the afternoon trade as investors remained on guard ahead of the eagerly awaited ECB policy meeting later in the day. Indian markets had opened on a flat note and remained stuck in a narrow trading range in the first half. However, sentiment got a fillip after the European markets opened with smart gains and gained further ground as the day progressed. Nevertheless, the last half an hour of trades and intra-day traders saw traders lock in some gains from the day's high, dragging the Nifty below the 5250 mark. The BSE Sensex ended at 17,346, up by 32 points or 0.2% over the previous close. It had earlier touched a day’s high of 17,418 and a day’s low of 17,294. It opened at 17,320. The NSE Nifty settled at 5238, up 13 points or 0.2% over the previous close. It touched a day’s low of 5,217 and a day’s high of 5,260. Wipro, Ambuja Cement, ACC, Infosys, Jindal Steel, Tata Motors, Axis Bank, ICICI Bank and NTPC were among the notable gainers in the Sensex and the Nifty. BHEL, ITC, Bharti Airtel, Ranbaxy, IDFC, Hero Motocorp and Power Grid were the top losers in the Sensex and the Nifty. The INDIA VIX on NSE ended lower by 0.2% at 16.98. It hit a day’s high of 17.07 and a day’s low of 16.23. The market breadth on the BSE was positive, with 1446 stocks ending higher and 1333 stocks closing lower. The broader indices also gained moderately, leading to a favourable market breadth. The BSE Mid-Cap index rose 0.3% while the BSE Small-Cap index climbed 0.2%. Among the sectoral indices, IT and Teck led the pack of gainers, up ~2.6% and ~1.9% respectively, buoyed by weakness in the rupee. Auto Pharma and Bankex were the other sectors that advanced. Meanwhile, FMCG, Consumer Durables and Capital Goods were the only declining sectors. Power, Oil&Gas and Realty ended flat. On the BSE 500 index, Dalmia Bharat Enterprises, C. Mahendra Exports, Torrent Power, Elecon Engineering, OnMobile Global, Hathway Cable, KGN Enterprises, HSIL, Prestige Estates Projects, Den Network and Wockhardt were the rising stocks. Kemrock Inds, Deccan Chronicle Holdings, MVL, Chennai Petroleum Corp and Gujarat State Petronet were the losing stocks on the index. Earlier, the main Indian equity benchmarks had struggled for direction in the morning trade, tracking indecisive global cues as investors stayed on the sidelines before Thursday's important ECB policy announcements. Investors are betting on some sort of an announcement on new monetary stimulus from the European Central Bank (ECB) president Mario Draghi later today amid no sign of relief from the long-running debt crisis. Draghi favors unlimited purchases of government debt that will be sterilized to assuage concerns about its potential inflationary impact, according to media reports. His plan aims to lower borrowing costs in indebted countries and prevent a breakup of the euro. Economists are split over whether ECB policy makers will lower the benchmark interest rate to a new record low, reports said. Draghi will speak at a press briefing after the ECB’s Governing Council decides on interest rates. The odds of ECB president Mario Draghi announcing a bond-buying programme have been rising. One has to see if Draghi obliges the markets or disappoints by deferring the call on fresh monetary stimulus. A few economists expect the ECB to cut its main lending rate to 0.5% from 0.75%. Attention, however, is focused on bond-buying measures. Any ECB action will be linked to political developments. Plus, there are worries that Germany may turn out to be a party-pooper as far ECB’s bond-purchase plan is concerned. "The UPA II’s governance deficit continues to be a drag on the markets. The "coal-gate" remains a major overhang. With the economy on a downward spiral, lack of meaningful progress on market-friendly reforms will further dent investor sentiment. Then there is the looming threat of a debt downgrade, which may add to the long list of macro-economic woes," says Amar Ambani, Head of Research, IIFL. "The RBI is unlikely to budge on its monetary stance unless it sees material signs on fiscal reforms. Essentially, the situation is unlikely to change much in the foreseeable future for the Indian or for that matter world markets. That calls for a measured approach in the near term. Avoid needless adventures and stick to a stock-centric strategy." So far, there has not been any sign of bottoming out and a move below 5200 could see the Nifty test the 200 DMA (5120). Globally, European and Asian stocks rallied today, as investors remained optimistic that the European Central Bank (ECB) President Mario Draghi will today announce a new bond-buying programme to try and insulate larger eurozone nations from the debt contagion. The DAX in Germany was up 1.3% while the CAC 40 in France rose by ~1%. The FTSE 100 in the UK advanced by 0.6%. Japan's Nikkei Average ended almost unchanged by while the Shanghai Composite index was up 0.7%. The Hang Seng rose ~0.3%, while the Australia S&P/ASX 200 was up ~0.8%. The Kospi in South Korea gained 0.4% while the Straits Times in Singapore fell 0.25% and the Taiex in Taiwan was down ~0.5%.