Sensex pares gains as GDP growth sags

The Sensex lost most of its early gains to end 0.1 per cent higher on Wednesday, after data showed the economic growth slowed in the December quarter to its weakest annual pace in almost three years.

The GDP rose 6.1 per cent in the period compared with a year earlier, as high interest rates and rising input costs hurt investment and manufacturing. “The GDP data was disappointing but the possibility of positive newsflow from the euro zone has held markets at the current levels, else it would have fallen more,” said Ambareesh Baliga, chief operating officer, Way2Wealth Securities.

The main 30-share BSE index, which rose as much as 1.5 per cent earlier in the day, closed up 21.56 points at 17,752.68, with 17 of its components rising. The index gained 3.3 per cent in February — its second monthly rise.

The Sensex has risen about 15 per cent in 2012, with foreign funds buying more than $7 billion of equity. Shares in state-run Oil and Natural Gas Corp gained 3.5 per cent, outpacing the wider market, ahead of a government share auction in the company tomorrow, which is expected to receive strong demand.

The government plans to raise at least $2.5 billion by selling a five per cent stake in the country's largest oil and gas producer.

Energy major Reliance Industries led the gains and ended three per cent higher. Traders said the company is expected to restart a 290,000 barrels per day (bpd) crude distillation unit (CDU) within one or two days.

Banks fell on worries that high inflation could make it difficult for the central bank to cut interest rates after Brent crude prices rose above $122 per barrel.

Private lenders ICICI Bank fell 0.5 per cent and HDFC Bank fell 2.5 per cent, while State Bank of India, the country's biggest lender, bucked the trend by rising 0.7 per cent.

Bajaj Auto rose 15.1 per cent and Tata Motors gained 13.7 per cent in February, making them the biggest gainers this month.

The monthly losers were led by Bharti Airtel, which fell 8.4 per cent, and Cipla, which lost 7.5 per cent.

European shares rose on Wednesday on hopes that a fresh cash injection by the European Central Bank will help further temper market tension and underpin risk appetite.

The 50-share NSE index ended 0.18 per cent up at 5,385.2. In the broader market, there were about 1.4 gainers for every loser on volume of 973.6 million shares.

Elsewhere, the MSCI's measure of Asian markets other than Japan was up 1.44 per cent.

Stocks on the move
Power equipment maker BGR Energy rose 9.6 per cent after its joint venture with Hitachi Power Europe GmbH emerged as the lowest bidder for a Rs 16,000 crore order from NTPC. Rival Larsen & Toubro, the country's biggest engineering conglomerate, fell three per cent.

Sanghvi Forging and Engineering rose 10.7 per cent after it said it won an order worth Rs 5 crore.