Markets: Quiet consolidation

The markets took a pause after touching fresh 30-month highs in the early part of the trade. Building on the 100+ point gains of the previous trading session, the benchmark indices added around half a per cent this morning, only to succumb to tiredness with the passage of time. The Sensex ended at 18172, down 44 points and Nifty ended at 5447, down 21 points. The midcap index ended flat at 7522, while the smallcap index gained 44 points at 9561.

The US stocks had risen in thin trade on Wednesday as retailers' earnings and a report showing a slight improvement in private employment boosted optimism ahead of Friday's payrolls report. The Dow gained 44 points to 10,680 and Nasdaq advanced 20 points to 2,303 overnight. But the Asian markets had a mixed session; Hang Seng pared its early gains to end flat, while the Nikkei added 119 points, regaining most of the ground it had lost the day before. The European markets are trading in the positive though, with the DAX, CAC and FTSE gaining in the region of half a percent each.

In the process, the indices chose to ignore the easing in food inflation. The food price index rose by an annual 9.53% in the week ended July 24  compared to 9.67% in the the previous week as the prices of fruits and vegetables fell by 3%. The fuel price index rose by an annual 14.26% in the week to July 24 as against a 14.29%  reading in the previous week, although the government had hiked fuel prices in end-June.

Select auto stocks came back into the reckoning after a period of consolidation. Tata Motors gained 2.1% at Rs 860 to emerge as the leading gainer on the BSE, and giving it company was Maruti, which gained 1% at Rs 1225. And IT continued from where it left on the previous day. TCS strengthened by 0.8% at Rs 877, Wipro added 0.5% at Rs 431 and Infosys inched higher by 0.2% at Rs 2873. And ITC saw bottom-fishing to end up 0.7% at Rs 156; the FMCG major had adjusted lower for the past two sessions after going ex-bonus.

Meanwhile, in the broader market space, most of the frontline shipping stocks gained 4-14% each after shipping companies reported robust financial numbers for the quarter ended June 2010. Varun Shipping, Essar Shipping and Shreyas Shipping gained around 10%, while Mercator Lines, Garware Offshore, Shipping Corporation of India, Great Eastern Shipping, Chowgule Steamship, Bharati Shipyard and ABG Shipyard added 4-10% each on the BSE.

Continuing its recent downward trajectory, RCom weakened by 2% at Rs 173 to emerge as the top loser on the Sensex. In the auto pack, M&M ended lower by 1.3% at Rs 645 and Hero Honda ended down 1.2% at Rs 1866. And index heavyweight RIL inched towards the 1000k mark yet again, shedding 0.8% at Rs 1006.

The market breadth was marginally positive. Out of 3069 stocks traded on the BSE, there were 1581 advancing stocks as against 1381 declines.