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Monday, 12 November 2012

Sensex ends flat on Diwali eve; United Spirits rallies 35%

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Sensex ends flat on Diwali eve; United Spirits rallies 35%
Clean Media Correspondent

Mumbai, Nov 12 (CMC) Indian shares closed flat with a negative bias on Monday ahead of muhurat trading session tomorrow. The market was positive in first couple of hours of trade ahead of September IIP data but much lower than expected industrial output data dented the sentiment in rest of the session.

 Indian shares closed flat with a negative bias on Monday ahead of muhurat trading session tomorrow. The market was positive in first couple of hours of trade ahead of September IIP data but much lower than expected industrial output data dented the sentiment in rest of the session.


Overall the market remained in a narrow range on Diwali day; the 30-share BSE Sensex fell 13.34 points to close at 18,670.34. The index was up 316 points before the muhurat trading session in 2011.

Meanwhile, the 50-share NSE Nifty was down 2.55 points to 5,683.70, which was near 5100 level before the previous year’s muhurat trading session.

“The last twelve months have been obviously very tough and eventful for the markets, Ratnesh Kumar, MD & CEO, Standard Chartered Securities says.

“It has survived a period of extreme pessimism at the same time last year, to a partial restoration of the faith and belief. This year, in Asia, India is probably the only market which has received the maximum amount of FII flows. But the road towards sustained positive momentum is still a long way ahead,” he explains.

Going forward, he would be slightly more optimistic on a three-six months’ horizon than on 12-months’ horizon.

Despite hopes that industrial slowdown may have bottomed out, the September Industrial output dropped to negative 0.4 percent much lower as compared to 2.3 percent in August and expectations of 3.2 percent, impacted by negative growth in capital goods, manufacturing and consumer goods sectors. Even the August output revised downward to 2.3 percent from 2.7 percent earlier (provisional).

C Rangarajan, chief of PMEAC, said the September IIP number was a disappointing figure, particularly when the August industrial production rate showed a pick-up. He said the government had initially estimated FY13 GDP growth rate at over 6.5% and later scaled it down to 6%. "But now it can be in the region of 5.5%," the advisor to the prime minister said, sounding cautious.

Consumber price index increased to 9.75 percent in October from 9.73 percent in previous month, driven by rising prices of food items such as sugar, pulses, vegetables and clothings. Wholesale Price Index inflation will be announced on Thursday.

The Indian rupee touched a two-month low today due to weak trade deficit data. It fell 27 paise to 55.02 against the US dollar at 15:31 hours IST. India's exports in October contracted 1.69 percent YoY to USD 23.2 billion due to the demand slowdown in US and European markets while imports rose by 7.37 percent to USD 44.2 billion in October, leaving a trade deficit of USD 20.96 billion.

The market will open for muhurat trading at 3:30 pm on Tuesday.

Country’s largest lender State Bank of India gained 1.6 percent after the bank said would revise down July-September slippages by around 1,400 crore. On Friday, SBI had said July-September slippages were Rs 8,495 crore, sending its shares down 4 percent.

Private sector lender HDFC Bank rallied 1.9 percent while its rival ICICI Bank closed flat.

Top telecom operator Bharti Airtel gained 1.6 percent on auction day for 2G spectrum.

Software services exporters TCS and Infosys rose 0.5-0.7 percent.

Steel producer Tata Steel lost 1.7 percent as brokerages downgrade the stock after disappointing operating performance in second quarter.

Cigarette major ITC and two-wheeler major Hero Motocorp fell 1.6 percent.

Engineering conglomerate Larsen & Toubro and state-owned oil & gas producer ONGC were down 0.7 percent each. Index heavyweights Reliance Industries and HDFC slipped 0.2 percent.

In the second line shares, United Spirits rallied 35 percent as brokerages upgraded the stock after Vijay Mallya sold stake in the company to UK-based Diageo.

Radico Khaitan rose 5 percent on sentiment effect of the deal.

Shares of DB Realty, Indiabulls Real Estate, HDIL, MCX, Financial Technologies, Aurobindo Pharma and Marico rallied 3-10 percent.

Dhanlaxmi Bank surged 7.5 percent ahead of second quarter numbers this week.

Pantaloon Retail, Suzlon Energy, Orchid Chemical, BEML, Hindustan Dorr-Oliver, Manappuram General Finance, IVRCL, GVK Power down 1-4 percent following poor numbers in September quarter.

Declining shares outnumbered advancing by a ratio of 788 to 650 on the National Stock Exchange.

On the global front, Asian markets closed mixed while European markets were trading mixed too.

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