Sensex ends at one-month high on February F&O expiry

Benchmark indices increased for the fourth consecutive day amidst volatile trading and expiry of the Feb F&O contracts.

Benchmark indices gained for the fourth consecutive day amidst volatile trading and expiry of the February Futures & Options (F&O) derivative contracts. Gains of 2% in index heavyweight ITC also contributed towards the rise.

At close on Wednesday, the 30-share Sensex was up 135 points at 20,987, while the Nifty-50 had increased by 38.75 points at 6,238.80.

The markets remain closed on Thursday on account of Mahashivratri.

Broader markets underperformed the benchmark, with the BSE Mid-cap and Small-cap increasing by 0.10% and 0.23% respectively, compared to Sensex's gain of 0.65%.

At 61.96, the rupee was down by 0.02  points compared to Tuesday's close of 61.94 versus the dollar. Demand for the dollar to meet month-end requirements of importers was the primary reason for this, according to dealers.

Breadth of the market was just about positive, with 1356 advances, 1336 declines, and 149 scrips remaining unchanged.

Says Sahaj Agrawal, Deputy VP - Derivatives Research, Kotak Securities: “Markets witnessed significant volatility in the February series. Every correction got bought into led by an up-move in the index. Considering the rollover into the March series we expect upsides to be limited. Selling pressure can be expected around 6300-6350 levels. On the downside strong support is seen at 6100 levels below which 5950 can be tested. For the medium term we remain positive on the market and advice accumulation of select stocks.”

Global Markets

Major Asian indices remain mixed on Wednesday afternoon as concerns over opaque policy moves in China kept investors on edge. Singapore's Straits Times was down by 0.50% at 3,088, while Hong Kong's Hang Seng was up 120 points at 22,437. Japan's Nikkei closed 81 points, or 0.54%, lower at 14,971 after the yen strengthened overnight. It had earlier touched a three week high of 15,071 yesterday.

European markets remained marginally down on Wednesday morning trades as investors remained cautious ahead of the release of the second estimate of U.K. GDP data of the final quarter of last year. The FTSE-100, which had closed at its highest level in 14 years on Monday, was down 0.43% to 6,801.

"Investors have become cautious as they think the market is due for a correction after rising too far, too fast. They are waiting for some catalysts before pushing the FTSE 100 towards record highs," Tom Robertson, senior trader at Accendo Markets, said, adding the market focus will be on UK GDP figures.

Other European indices like the CAC-40 and DAX also showed modest declines, decreasing by 0.39% and 0.22% respectively.

Sectors and Stocks

The S&P BSE Metal index was down 1.8% and hit a four-month low of 8,542 amidst concerns of slowdown in China. The metal index has lost almost 6% in the last six trading sessions, compared to 1.4% rise in the Sensex. Realty was also down, reducing by 0.5%.

Apart from these two indices, all the other sectors were in the green. FMCG, Healthcare, Bankex, Auto, Consumer Durables, Power, and Capital Goods were each up between 0.3-1.0%.

GAIL was the biggest gainer in the Sensex, rising by  almost 3%. Sun Pharma, Dr. Reddy's, State Bank of India, Bharti Airtel, Mahindra & Mahindra, and Wipro also gained by 0.7-1.8% each.

Tata Steel and Sesa Sterlite extended yesterday's fall to decline by 3.2% and 2.4% respectively, as metal companies continued their struggle after a weak global outlook for the industry. They were the worst performer in the Sensex.

Dr Reddy’s Laboratories gained nearly 2% at Rs 2,823, after touching a record high of 2,845 earlier in the day, after the company said it has launched Sumatriptan Injection USP in the US.

State Bank of India (SBI) was up by 1% to Rs 1,522 after the country’s largest public sector lender said that its board schedule to meet next week to consider interim dividend to shareholders of the company.

Smart Moves

Amongst other shares, Sanofi India was up more than 3% at Rs 2,728 after the company reported robust earnings with net profit rising over 100% during the fourth quarter ended December 2013. The results were announced on late Tuesday.

Polaris Financial Technology surged over 14% to Rs 164.75 after the company clarified that it is not planning to sell a stake in the company.

ABB India soared almost 5% to Rs 706, after earlier touching a 52-week high of Rs. 735, on back of heavy volumes. The stock opened at Rs 679 and hit a low of Rs 672 so far. The counter has seen nearly two-fold jump in trading volumes.

Paper Products gained over 8% to Rs. 90.75 after its Indian promoters sold his entire stake which was of 3.01% in the company to its foreign partner Huhtavefa BV for Rs 190.11 per share on Friday, 21 February 2014.

Ramco Systems rose almost 3% to Rs 199 on the NSE after the company said that US-based firm Columbia Helicopters has successfully deployed its aviation software.

Panoramic Universal edged 2% higher at Rs 7.24 after the small-cap IT company closed down and de-registered its wholly owned subsidiary in Namibia in accordance with the law of the land, the company said in an exchange filing.