Markets have a tepid closing; Nifty holds 8,200

The Sensex recovered around 250 points from the lows of the day; oil and banking have a decent session, while IT drags

The benchmark indices ended the day virtually unchanged, amid another volatile session of trade, on continuing concerns over a delay in passage of reform-centric legislative proposals, tepid corporate earnings and forecasts of a sub-par monsoon season.

The Sensex ended at 27,206, lower by 45 points and the Nifty settled at 8,224, down 11 points.

In the broader markets, the BSE Midcap and Smallcap indices outperformed their large counterparts to end higher by nearly 1% each at 10,526 and 10,972 respectively.

The Sensex had soared by 373 points and the Nifty had jumped by 108 points on Wednesday. However, the benchmark indices failed to build on the momentum in this session as the tug-of-war between the bulls and bears swung the Sensex by 300 points between a high of 27,293 and a low of 26,948 in the course of the day before leading on to a listless closing.

ECONOMY

The wholesale price inflation softened further for the sixth straight month to a low of -2.65 per cent in April compared to -2.33 per cent in March. Retail inflation, announced last week, has also fallen to a four-month low of 4.87 per cent that adds more strength to the hopes of a rate-cut from Reserve Bank of India.

RUPEE

The rupee ticked up 9 paise to 63.91 against the dollar in early trade today at the Interbank Foreign Exchange after the American currency weakened overseas on disappointing retail sales report.

EXPERT VIEW

"WPI inflation remained in deflationary territory for the sixth consecutive month as fuel and manufacturing components of the index showed a contraction. It is important to note that energy and manufactured goods prices at the wholesale level continued to decline during the previous month showing that the pass through of global commodity price declines was still taking place," said Anis Chakravarty, senior director, Deloitte in India.

"That said, given the reversal in commodity prices over the last month , we would expect inflation rates to move up in the second half of the year. On the food front, we are seeing divergent trends as vegetable prices declined by 0.23% while prices of fruits firmed up by 7.67% from the previous month. Overall food inflation moved down to 5.73% in April from 6.31% in March due to a favourable base effect. Going forward, we expect the fiscal and monetary authorities to be vigilant on the food price front as the threat of another bad monsoon season looms large," he adds.

SECTORS AND STOCKS

The IT index declined by around 1% to emerge as the top sectoral loser on the BSE as the rupee rebounded from the key 64 level. Wipro, Infosys and TCS shed between 1% and 2% each on the BSE.

On the other hand, the BSE oil index ended higher by around 1%. BPCL, HPCL, Oil India and ONGC jumped by more than 1%; RIL, however, ended lower by 0.7%.

The BSE banking index rebounded from the day's lows post the WPI data. The day clearly belonged to the PSU banks, with State Bank of India (SBI), Punjab National Bank, Canara Bank, Bank of India, IDBI Bank and Indian Overseas Bank surging by 2%-3% each. Oriental Bank of Commerce, Allahabad Bank, Syndicate Bank, Union Bank of India and Andhra Bank rallied more than 4% each. However, the private banks had a sluggish session, with ICICI Bank, Axis Bank and Kotak Mahindra Bank shedding upto 1% each.

NTPC gained over nearly 1% after the Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, on Wednesday approved the disinvestment department’s plan to sell stakes in Indian Oil and NTPC as part of the Centre’s Rs 41,000-crore divestment target for public sector undertakings. Indian Oil, however, ended marginally in the red.

On the results front, Aditya Birla Nuvo jumped by 2% to Rs 1,865 after reporting a healthy 89% year-on-year (yoy) growth in consolidated net profit at Rs 332 crore for the fourth quarter ended March 2015 (Q4) on account of lower employee costs.

Ashoka Buildcon suged 6% at Rs 164 after reporting a over two-fold increase in consolidated net profit at Rs 37.80 crore for the quarter ended March 31, 2015.

Emami zoomed by 8% at Rs 1016 after posting a 24.5% year-on-year growth in its net profit for the quarter ended March at Rs 138 crore on the back of a similar growth in sales and increased market share.

The market breadth was positive, with 1474 advancing stocks as against 1220 declines on the BSE.