Markets trim gains post CAG report

L&T, HDFC Bank among top Sensex losers

Markets closed with marginal gains with the Nifty up four points at 5,367 and the Sensex ended up 24 points at 17,681(provisional)
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(Updated at 14:34pm)
Benchmark share indices trimmed most of the early gains in late noon trades on Friday on profit taking after the Comptroller and Auditor General of India's (CAG) tabled a report in the Parliament on allocation of coal blocks, aviation and mega power projects which rendered huge undue benefits to select companies.
 
The Sensex was up 35 points at 17,692 after touching an intra-day high of 17,801 and the Nifty was down 4 points at 5,367 after touching an intra-day high of 5,399.95

Meanwhile, European stocks and the euro both gained on support from German Chancellor Angela Merkel for European Central Bank intervention to calm the euro zone's debt troubles. In Asia, the Nikkei and the Hang Seng gained 0.8% each while the Shanghai COmposite and Straits were marginally up. Among major European share indices, CAC-40, DAX and FTSE-100 were trading with marginal gains.

Among the sectoral indices on the BSE, FMCG, IT were the top gainers up over 1% each while Realty, Power and Metal indices were down 1.5% each.

Tata Power was among the top Sensex losers, down 3.2% on reports that the Comptroller and Auditor General’s (CAG) has accused the government of favouritism and benefiting the company in some large power projects.

Larsen & Toubro was down 1.2% after the stock was quoted ex-dividend today. The board of directors of L&T recommended a dividend at the rate of Rs 16.50 per equity share for the financial year 2011-12.

Metal shares such as Tata Steel, Hindalco and Jindal Steel were trading lower by 0.6-3.6% each.

Meanwhile, ITC and software majors which had surged in early trades today also pared some of their gains on profit taking after the CAG report.

ITC was up 1.4% at Rs 262 on buying support at lower levels after the stock witnessed selling pressure yesterday.
on concerns about regulatory action at home after reports that Australian court has approved logo ban on tobacco packs from December 1.

Software exporters such as Infosys and TCS were up 1.4% on back of positive economic data from the US. All these companies earn a major portion of their revenues from exports to the US.

Index heavyweight Reliance Industries which was trading flat after gains of nearly 1% in early trades. RIL recently said it has proposed to drill the first exploration well in almost five years in the flagging KG-D6 gas fields in an effort to reverse the falling output. The report by Goldman Sachs that RIL can potentially become a $100-billion in market capitalisation by 2016-17 also boosted sentiment.

Tata Motors was the top Sensex gainer up 2.4% at Rs 241 after the auto major on Thursday said that global sales, including for luxury unit Jaguar Land Rover, were up 21% in July.

Maruti Suzuki which was up 1% in early trades was trading flat. The company said it would lift the month-long lockout and resume production at the violence-hit Manesar unit from August 21.

In the financial segment, mortgage lender HDFC and India's largest lender SBI which were up 0.4% and 0.2%, respectively, after rising nearly 1% in late morning deals.

In the broader market, both the BSE Small-cap and Mid-cap indices were trading flat with positive bias.

Among other stocks, Reliance Power fell more than 6 percent on Friday after the CAG said the company unduly benefited from a government decision allowing the power producer to use surplus coal from its captive block for another project it was not meant for.

The market breadth turned negative with 1,430 losers and 1,263 gainers on the BSE.