BSE Sensex gains 115; gold, silver hit multi-year low

The equity benchmarks closed firm after wholesale price inflation data hit a 40-month low at 5.96 percent. Core inflation data was also below 4 percent. Banking stocks closed with smart gains on hopes of a rate cut by the central bank in its credit policy on May 3.

The Sensex closed at 18357 up 115 points and the Nifty ended at 5568 up 39 points. 

Gold prices took a dramatic U-turn on Monday, reversing early gains to drop to a two-year trough after bullion futures fell on fears about central bank sales and holdings on global exchange-traded funds sank to their lowest in more than a year. Live Commodity Prices

Technical Analyst, Sudarshan Sukhani is of the view that speculative positions are getting unwound in gold and silver.

Stocks of gold finance firms Muthoot Finance  and Manappuram Finance were down 13 percent and 10 percent respectively. Falling gold prices increase the risk for gold loan firms as the probability of defaults by customers increase. Full article

Last month, Manappuram shares were hammered after the company said it would have to write off an amount larger than what it had indicated earlier, due to a section of customers defaulting on their loans.

Buying was seen in oil&gas, banks and FMCG stocks. Shares of oil marketing and exploration companies were up in trade today after US crude oil futures have dropped below USD 89 a barrel mark. Brent futures hit a nine-month low near USD 101 on Friday as a broad investor sell-off in commodities triggered falls of as much as USD 3 a barrel.

Tata Motors shares tumbled over 3 percent after ratings agency Moody's said lower market share in both passenger vehicles and commercial vehicles was a "credit negative."

Infosys ended with 2 percent gains today after shedding 22 percent on Friday. Brokerage house Motilal Oswal is bullish on the stock and sets a price taregt of Rs 2700.

Asian markets ended on a weak note after weak economic data from China and the United States raised concerns over the outlook for the global economy. Japan's Nikkei share average dropped on Monday, moving further away from near five-year highs tapped last week.

The market consolidated in afternoon trade on short covering. The Nifty was holding well above 5550 led by oil & gas, cement and bank stocks. The Sensex was up 124.56 points at 18367.12 and the Nifty added 46.25 points to be at 5574.80.

All oil and gas stocks including ONGC (up 5.6 percent), BPCL (up 6.1 percent), HPCL (up 4.2 percent), IOC (up 3.6 percent), RIL (up 2.2 percent) have surged as US crude oil futures dropped below USD 90 a barrel mark for the first time in more than a month as economic growth unexpectedly eased in China.

Other big gainers of the day were SBI, Bharti Airtel and L&T.

Meanwhile, Wockhardt tanked 5.8 percent to Rs 1,577 on reports that the US drug regulator has sought clarifications on the company's injectables facility in Aurangabad.

Tata Group stocks were dragging in the day as TCS was down 2.4 percent, Tata Motors fell 2.3 percent while Tata Steel lost 0.9 percent.

One stock that was battered badly on Friday recovered losses today as Infosys was 5 percent off day's low. The stock was trading at Rs 2313, up 0.8 percent on the BSE.

Sterlite Industries, Hindalco and Coal India were the other laggards of the day.

In macro data front, March inflation dropped to a 40-month low to 5.96 percent month-on-month.

The market is trading firm after March inflation data came in at 5.96 percent, much lower than estimates. This is the lowest data in last 40 months.

Rate sensitive stocks banks, auto and infra companies are seeing buying interest.

The Sensex is up 76 points at 18316 and the Nifty is up 35 points at 5563.

BPCL, ONGC, UltraTech Cement, Bank of Baroda and PNB are top gainers on the Nifty. TCS, Tata Motors, Infosys, Cairn India and Sesa Goa are top losers.

IT stocks are struggling in trade today. TCS slides nearly 3 percent, Infosys is down 1.8 percent, Tech Mahindra falls nearly 1 percent, Wipro and HCL Tech are also in red.

Gold loan finance companies slump after a crash in prices of the yellow metal, which will potentially reduce the value of the collateral held by these companies.

Muthoot Finance falls 16.5 percent, while Manappuram Finance is down 9.1 percent. Gold prices fell 5 percent on Friday, the biggest drop since December 2008.

The market recovered a bit as the Nifty struggled to move closer to 5550.  The Nifty was at 5523.55, down 5 points while the Sensex lost 33.07 points to be at 18209.49.

Oil and gas stocks were lending support to the indices ahead of Reliance Industries (up 1.2 percent) fourth quarter earnings expected on Tuesday.

ONGC, SBI, Bajaj Auto, GAIL and HDFC were the lead gainers of the day. ONGC is excited on reports that it is on the threshold of discovering additional oil reserves in the Mumbai offshore field.

JSL Stainless was up 5.6% today. The stock was a big gainer last week after the company signed an MoU with global steel giant, Posco. The management told CNBC-TV18 that they signed 2 MoU's with Posco for a period of three years and can be extended mutually. It is also looking at setting up a nickel smelter in Indonesia.

Meanwhile, gold loan companies like Muthoot (down 15.9 percent) and Manappuram (down 9.1 percent) crashed as gold prices continued to fall. Domestic gold price have declined 14.2 percent from its record high of Rs 32,500 per 10 grams in November-end 2012.

Tata Motors fell 3.5 percent as rating agency Moody's said the auto company's diminishing market share is credit negative. It added that Tata Motors' private vehicle market share has decreased to 11.8 percent vs 14.2 percent at the end of FY12. This longer-term erosion of market share is credit negative because it leads to weaker operating performance and key financial metrics.

Infosys cracked further (down3.5 percent) reeling under disappointing fourth quarter performance. Other top losers on the Sensex included TCS, Sterlite and Coal India.

The market opens on a weak note ahead of the inflation data today. March WPI inflation is expected to be slightly lower at 6.4 percent. According to a CNBC-TV18 poll, food inflation could fall due to high base while core inflation is seen at 3.8 percent.

The Sensex is down 52 points at 18190 and the Nifty is down 15 points at 5512.

BPCL, IndusInd Bank, Sun Pharma, HDFC and Tata Power are top gainers on the Nifty. DLF, Tata Motors, Sesa Goa, Jaiprakash Associates and Ranbaxy Labs are top losers.

Gold sank more than 5 percent on Friday followed by 3 percent today amid concerns about central bank sales and souring sentiment.

Gold finance companies like Muthoot Finance and Manappuram are down 8 percent each. Titan Industries is also down close to 3 percent.

China's economic recovery unexpectedly stumbled in the first three months of 2013 as the annual rate of growth eased back to 7.7 percent from the 7.9 percent pace set in the final quarter of last year, official data showed on Monday.