Markets end flat ahead of April F&O expiry

Weakness in Infosys, ITC and Sesa Sterlite weighed on the indices

Markets closed flat with negative bias as investors turned cautious ahead of the expiry of April derivative contracts on Wednesday. This decline came in the wake of a near-500 point rally over the last two trading sessions.

After both the Sensex and Nifty hit their respective record all-time highs for second consecutive session, benchmark indices edged lower in late trades amid profit booking emerged in select blue chips. 

At close, the Sensex ended down six points at 22,758 and the Nifty edged lower by two points to close at 6,815.

The market will remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month April 2014 series to May 2014 series. The April 2014 F&O contracts expire on Wednesday, 23 April 2014 as the stock markets would be shut on Thursday on account of Parliamentary elections in Mumbai.

Earlier in the day, both the Sensex and Nifty hit their respective record all-time highs for the second consecutive session. The Sensex had gained as much as 0.4% to 22,853, while the Nifty had advanced as much as 0.3% to hit a record high of 6,831.

Broader markets too reversed early gains and closed lower. The smallcap index added a single point while the midcap index slipped 0.1%,

Sectors & Stocks

On the sectoral front, BSE Capital Goods and Oil & Gas indices surged by over 1% each. However, BSE Metal, IT, Realty, Power, Auto and FMCG indices declined by 0.3-0.6%.

Oil and gas stocks have gained on renewed buying with shares of BPCL scaling record high and HPCL hitting 52-week high in intra-day trades.

Index heavyweight Reliance Industries trimmed intraday gains after hitting 52-week high. The stock was up 1% at Rs 968.

The main gainers on the Sensex were L&T, GAIL, ONGC, HDFC Bank and Hindalco, all gaining between 1-2%.

HDFC Bank firmed up after reporting a 23% increase in net profit for the quarter ended March 2014. The stock is trading at Rs 726, up Rs 9 or 1.2%, on the BSE.

Metal and mining stocks were mostly lower ahead of provisional reading of HSBC Holdings Plc and Markit Economics Ltd.'s China manufacturing purchasing managers' index due tomorrow.

The main loser on the Sensex was Sesa Sterlite down 4%.

Wipro, SBI, Infosys, and Maruti Suzuki down 1-3% were the other notable losers.

The market breadth was positive on BSE. 1,525 stocks advanced while 1,324 stocks declined.

Smart Moves

Novartis India surged 6% to Rs 497 on back of heavy volumes media reports that Eli Lilly and Company proposed to acquire Novartis' animal health business.

 

IL&FS Engineering and Construction Company was locked at the upper circuit of 10% at Rs 50.85 on the NSE after the company bagged an order worth Rs 268 crore.

 

Gujarat Gas Company dipped nearly 9% to Rs 374 on profit booking after its board approved the amalgamation and arrangement between group companies.

 

Supreme Petrochem was down 6.5% at Rs 62.15 after the company's net profit for the third quarter ended March 31, 2014 slumped 62.8% to Rs 9.78 crore compared with Rs 26.33 crore in the corresponding quarter last year.

Rupee

The rupee was trading at 60.81 after hitting 60.8250, its lowest since March 24 on the back of heavy dollar demand from oil importers. The unit closed at 60.59/60 on Monday, after posting its biggest single-day loss in more than a month.

Traders expect some consolidation in the pair later in the session. The pair is likely to hold in a 60.50 to 60.90 range for the rest of the session, dealers say.

Most Asian currencies are also trading weaker compared with the dollar. The Indonesian rupiah led declines among emerging Asian currencies with the dollar holding firm and as worries about liquidity and earnings in China hurt regional stocks.

Global Markets

In Asia, extended weakness in Chinese shares, driven by worries over liquidity and earnings, put a brake on other Asian stock markets on Tuesday despite Wall Street stocks rallying into a fifth session.

Japan's Nikkei share average began the day with a small gain and eventually fell 0.4 percent. MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat, while trading not far from a six-month high hit earlier this month.

The Shanghai Composite Index fell 0.8 percent to around 2,048 points on Tuesday, following a loss of 1.5 percent the previous day.

Chinese stocks have been hit by concerns about a potential share oversupply after the securities regulator released draft prospectuses for 28 new firms planning to list, marking the resumption of initial public offerings after a two-month hiatus.

Taking cues from Wall Street, European markets started higher with Britain's FTSE up 0.9%, Germany's DAX gained 1% and France's CAC added 0.7%.