Markets end flat amid volatile trade

Telecom and OMCs gain

Benchmark shares indices end flat on Tuesday,  amid a volatile trading session, as gains in financials and telecom shares were erased by losses in FMCG and IT stocks. The 30-share Sensex ended up 27 points at 17,426 and the Nifty added nine points at 5,288.

The broader markets outperformed the benchmarks with the BSE midcap up 0.5% and smallcap indices up 0.8%.

The Asian markets closed in the green on hopes of a stimulus from the Federal Reserve. Hang Seng and Jakarta Composite up 1.5% each were the top gainers followed by Nikkei, Taiwan Weighted and Straits Times up 1% each.

European shares joined a global rally in stocks on Tuesday as expectations rose that major central banks will take more policy action to support the world economy, after factory data showed the negative impact of the euro zone debt crisis. DAX gained nearly 1% along with CAC and FTSE up 0.2% and 0.4%, respectively.

Back home, among the sectoral indices, Consumer Durables, Realty and PSU indices closed up 1% each followed by Metal, Oil & Gas and Bankex indices up 0.6 each. Meanwhile, IT and FMCG indices remained in the negative territory, down 0.5% and 0.8%, respectively.

In the financial space, mortgage lender HDFC was up 1.6% at Rs 672 while ICICI Bank was up nearly 1% each while SBI was up 0.3%.

Telecom stocks gained after The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Tuesday gave a split verdict on a challenge by mobile phone operators seeking to overturn a government order requiring them to stop offering 3G services beyond their licensed zones through mutual roaming pacts, lawyers said. Bharti Airtel was the top Sensex gainer up 3% at Rs 319. Idea Cellular was up 5% and Reliance Communications was up 2%.

IT index was down 0.5% as rupee rose to its strongest level in nearly a month against the Dollar. TCS down 1.4% and Infosys down 0.2% were the major losers.

FMCG stocks continue to witness profit booking after recent gains on concerns that weak monsoon so far may give rise to commodity inflation leading to higher input costs thereby hurting margins. HUL and ITC were both down over 1% each. ITC lost ground after the Uttar Pradesh government decided to increase taxes on tobacco products from 12.5% to 50%. The state contributes around 5% to ITC’s revenue from cigarette sales.

Shares of oil marketing companies such as HPCL, BPCL and Indian Oil have rallied more than 2% each on reports that since April, the revenue loss on diesel and cooking gas has come down by 36% and 44%, respectively. Among the individual stocks, HPCL gained 4% to Rs 346, followed by Indian Oil up 4% and BPCL up 2%.

The notable gainers among the Sensex stocks were Hindalco, Coal India, HDFC and Gail India up 2% each. Dr Reddy's Labs was up 1.5% after the company on Monday said it has launched generic tablets used for treating post- menopausal osteoporosis in the American market.

Maruti Suzuki extended its gains and was up nearly 1% after the company Monday said it has registered 20% jump in June sales.

Among the losers were BHEL, Jindal Steel and Hero MotoCorp down 1% each. Sun Pharma, Cipla, Tata Steel, Tata Motors and Tata Power down 0.2%-1.5% were the other notable losers.

Among other stocks, Shipping Corporation of India rallied over 5% at Rs 59.75. “The company will increase the freight rate by $200 per standard container effective from 1 July. The increase will apply to all cargo destined for ports in North Europe, the United Kingdom, the Mediterranean and Black Sea region,” the company said in a press release.

Shares of GTL Group companies – GTL and GTL Infrastructure soared 9-15% after the board of GTL Infrastructure has approved a proposal to restructure its outstanding Foreign Currency Convertible Bonds (FCCBs) and constituted a sub-committee to negotiate and finalise the terms for restructure of FCCBs.

The market breadth was positive as 1724 stocks advanced as against 1,141 declines on the BSE.