Sensex struggles to a flat close…Metals fall, FMCG gain

The main Indian equity benchmarks ended with slender gains on Tuesday at the end of another rangebound session, as market participants continued to be cautious after pushing the BSE Sensex to 14-month high recently. Earlier, the main Indian indices had opened with a slightly positive gap, outperforming other Asian peers as the Government continued to take important policy measures aimed at restoring business confidence in a slowing economy. Shares of select power-related companies gained after the Cabinet on Monday unveiled steps to address the power sector's long-standing problems. However, the bulls were unable to capitalize on the early gains amid some concern about valuations in the wake of the sharp gains logged in the past few sessions. Negative vibes from the US and the Asian equity markets also dampened the mood on Dalal Street. European sock indices opened flat but soon turned negative as investors braced for key US economic data besides Spain’s announcement on Budget and banking audit. Finally, the BSE Sensex ended at 18,694, up by 21 points or 0.11% over the previous close. It had earlier touched a day’s high of 18,790 and a day’s low of 18,636. It opened at 18,708. The NSE Nifty settled at 5674, up 4 points over the previous close. It touched a day’s low of 5,652 and a day’s high of 5,702. Kotak Bank, BHEL, Hindustan Unilever, Cipla, ITC, Ranbaxy, Grasim, HDFC and BPCL were among the notable gainers in the Sensex and the Nifty. Jindal Steel, Cairn, JP Associates, Sterlite, Axis Bank, Maruti, Sesa Goa and Tata steel were the top losers in the Sensex and the Nifty. The INDIA VIX on NSE nose-dived by 9.1% to end at 17.11. It hit a day’s high of 18.83 and a day’s low of 17.11. Globally, Asian markets closed mostly lower in choppy trade amid nagging worries about the slowdown in leading global economies even as the eurozone leaders struggle to decisively deal with the region's long-running debt crisis. The MSCI Asia Pacific Index of regional shares swayed between gains and losses today after falling 0.3% yesterday. Last week, the Index lost 0.1%, halting a two-week advance. It had gained 5.4% this quarter through last week. The Asian benchmark is up ~8% this year. US markets closed marginally lower on Monday amid lingering worries about slowing global growth even as concerns about Greece and Spain resurfaced. Standard & Poor’s cut GDP growth forecast for most of the Asian economies while Germany's IFO business sentiment declined to a two-year low. The broader indices fared better than the large caps. The BSE Mid-Cap and BSE Small-Cap index rose 0.5% each. Most of the sectoral indices closed with gains despite a flat market. Realty was the biggest gainer, up ~2.1%. Other notable gainers were FMCG, Consumer Durables, Pharma and Power. Leading the list of laggards was Metals, down 1.4%, followed by Auto, PSU and Oil & Gas. On the BSE 500 index, United Breweries Holdings, Anant Raj Inds, Ansal Properties, Pantaloon Retail, United Spirits, Bombay Dyeing, Kingfisher Airlines, United Breweries, Godrej Inds, JSW Energy, Jubilant Lifesciences, Crompton Greaves, Deccan Chronicle and SKS Microfinance were the top gainers. On the other hand, Shree Renuka Sugars, Ess Dee Aluminium, Bajaj Hindusthan, Essar Oil and Tulip Telecom were the top losers in the broader market. Meanwhile, Deutsche Bank said in a research note that continuing rupee gains, subdued oil prices are a 'rare sweet spot' for Indian equities, positively impacting fiscal deficit, and give support to the RBI which has been waiting for inflation to cool. The German investment bank said in its note that policy focus will remain biased towards rupee appreciation. Expectations of muted global energy prices are a strong positive for India and have the potential to substantially reduce India's equity risk premium, Deutsche Bank said in its note. The German bank expects India equities rally to continue, reiterating Sensex target of 20,000 for December 2012. It prefers beta plays with recommendation for investors to stay overweight on banks, metals and some infra stocks, advises trimming positions in IT and Pharma.