Sensex ekes out slim gains…RIL shines; HDFC dips

After declining for two consecutive trading sessions, the Indian equity markets ended with modest gains on Tuesday. The slight upswing was seen despite negative cues from the Asian and European markets. Initially, it seemed like it will be another down day for the Indian markets. However, the main indices staged a spirited comeback in the mid-afternoon trade, buoyed by strength in select index bellwethers. The BSE Sensex ended at 17,440, up by 56 points or 0.3% over the previous close. It had earlier touched a day’s high of 17,452 and a day’s low of 17,308. It opened at 17,378. The NSE Nifty settled at 5274, up 20 points or 0.4% over the previous close. It touched a day’s low of 5,233 and a day’s high of 5,278. Gail, Jindal Steel, JP Associates, Reliance Industries, Tata Motors, Power Grid, BPCL, Reliance Infra and SBI were among the notable gainers in the Sensex and the Nifty. IDFC, HDFC, Cipla, Tata Power, Sun Pharma, Wipro anad Bajaj Auto were the top losers in the Sensex and the Nifty. Among the broader markets, the midcap stocks fared tad better than their small cap peers. The BSE Mid-Cap index rose 0.5% while the BSE Small-Cap index climbed 0.4%. All the sectoral indices closed in the green, barring Pharma and IT which ended absolutely flat. Leading the list of gainers was the BSE Realty index, up 1.6% followed by Oil & Gas, Power, Consumer Durables and Metals indices. On the BSE 500 index, EID Parry, Indiabulls Real Estate, Aban Offshore, Torrent Power, Opto Circuits, Den Network, Dish TV and Indiabulls Financial Services were the rising stocks. Blue Dart Express, S.Kumars Nationwide, Kemrock Inds and Tulip Telecom were the declining stocks on the index. The INDIA VIX on NSE ended lower by 4% at 16.59. It hit a day’s high of 17.28 and a day’s low of 16.59. The market breadth on the BSE was positive, with 1543 stocks ending higher and 1209 stocks closing lower. Overall investor sentiment continues to remain fragile, as they trade cautiously amid lack of progress on policy reforms. The ongoing spat between the Government and the BJP over the controversial coal block allocations remains a head wind. Economic data continues to be grim as well, with the first-quarter GDP growth just about holding above the 5% mark. The HSBC manufacturing PMI in August was near nine-month lows while exports slumped sharply in July. The GDP growth outlook has been scaled back by a number of private economists. Even the RBI and the Government have downgraded its FY13 GDP growth forecast recently. The Indian markets are also reeling under fears of a possible downgrade of India's sovereign debt rating if the expected reforms do not come through in the next few days. At the same time, investors are on a 'wait-and-watch' mode ahead of important policy meetings in Europe and the US in the next few days. The upcoming monthly jobs data out of the US is another key economic statistics to keep on one's radar. Globally, the Asian stocks closed mostly lower on Tuesday, as global investors await policy intervention by the world's leading central banks in the next few days amid no sign of bottom in worldwide economic gloom. Federal Reserve Chairman Ben S. Bernanke and ECB President Mario Draghi's recent speeches have generated quite a bit hope on further policy easing. The ECB policymakers are due to meet on Sept. 6 while the FOMC will hold a two-day meeting next week. Draghi skipped the Federal Reserve organised Jackson Hole event last week, sparking speculation of an impending announcement of sovereign bond buying by the ECB in the near term. The MSCI Asia Pacific Index fell 0.4% to 117.30 as of 4:29 p.m. in Tokyo. About 11 stocks dropped for every seven that gained on the index. The regional index was headed for a four-day decline, the longest losing streak since July 25 this year. Japan's Nikkei Average fell by 0.1% while the Shanghai Composite index dropped ~0.7%. The Hang Seng lost ~0.6%, while the Australia S&P/ASX 200 was down 0.6%. The Kospi in South Korea was down 0.3% while the Straits Times in Singapore and the Taiex in Taiwan were more or less flat. Most European stock indices fell today after Moody’s Investors Service cut the outlook on the European Union to negative and warned that the region could lose its "AAA" debt rating. The FTSE index in UK was down 0.7%, CAC index in France was down 0.4% and DAX index was down 0.3%. The euro gained against the yen. The 17-nation euro rose versus most of its major peers and approached a two-month high against the dollar. Australia’s dollar rose after the nation’s central bank left its benchmark interest rate unchanged at a developed-world high today.