Nifty closes flat; Jet Air, Dr Reddy's shine

Indian Equity markets closed flat as investors booked profits after a sharp rally following fiscal cliff deal yesterday. Analysts say buying interest may continue above 6020 levels, but profit booking may set in if the level is not maintined. Stocks in the oil & gas, IT and Telecom sectors were the main drivers in the market today. Traded volumes were limited to 1 lakh crore but advance decline ratio stood 2:1. European markets too were trading in the red after its rally post fiscal cliff deal.

The Sensex closed up 50.54 points or 0.26% at 19764.78, and the Nifty shut shop up 12.15 points or 0.20% at 6005.40. Profit booking was visible in banking stocks and momentum shifted to midcap and small cap counters.

Stocks with noticiable gains included Dr Reddy's and Jet Airways, closing up 4.70 percent and 2.35 percent respectively. Jet Airways rose on talks that its deal with Etihad are in the final stages. Dr Reddy's gained after the company announced that it had launched Finasteride tablets (1 mg), a bioequivalent generic version of Propecia in the US market.

In oil and Gas sector Cairn (up 2.24 percent), ONGC (1.95 percent), Reliance (1.51 percent) had a good run after Rangarajan panel suggested mandating a price of domestically produced natural gas at an average of international hub prices and cost of imported LNG instead of present mechanism of market discovery.

Infosys and TCS (up 1.24 percent each ) were the frontrunners in the IT space after Gartner revised IT spending growth forecast by 4.2 percent to USD 3.73 trillion in 2013.

Investors flocked telecom space on news that EGoM will put 34 blocks of liberalized spectrum up for next auction. Consequently, Reliance Communication (gain 4.65 percent), Tata Communication (3.54 percent), Bhart Airtel (1.99 percent), Idea Cellular (4.25 percent) and Bharti Infratel (1.64 percent) generated huge interest. The news of Bharti Infratel being included in the FTSE Global Equity Indices from January 7, 2013 also helped the stock.

After a decisive breakout, the mood in the market remained buoyant on the third trading day of the week. The 6000 mark which Nifty acheibed yesterday appears sustainable. At 2.34 PM, the Nifty was up 12.85 points or 0.21 percent at 6006.10. The Sensex was up 40.25 points or 0.20 percent at 19754.49.

Besides Jet Airways, which was up 5 percent as Etihad deal reach final stage, Dr Reddy's also had a good run after the company launched Finasteride tablets (1 mg), a bioequivalent generic version of Propecia in the US market. The other gainers were from the gold loan compnies like Mannapuram and Muthoot Finance.

Heavyweight stocks in the oil and gas space also continued to see buying interest. While Cairn India rose 1.98 percent, Reliance Industries and ONGC gained 1.42 percent and 1.04 percent each.

Investors also found the Telecom space attractive with Tata Communication (up 2.79 percent), Reliance Communication (2.5 percent), Idea Cellular (1.77 percent), Bharti Airtel (1.59 percent) and Bharti Infratel (1.49 percent). These were up on news that EGoM will put 34 blocks of liberalized spectrum up for next auction.

Indian equity bechmarks were trading flat with an upward bias. The BSE Sensex stood 0.15% (12.40PM) percent higher at 19744.14 in afternoon trade, while the Nifty remained at 6001.90 with 0.14 percent or 8.65 point gains.

Top gainers on the Sensex were Dr Reddy's (up 2.79%), ONGC, Reliance, Sterlite and SBI - each trading with sub 1 percent gains. Tata Power, Sun Pharma, Jindal Steel, HPCL and ITC saw huge profitbooking after yesterday's super run. These were all trading with a cut ranging from 0.5% to 1.6%. HUL, which was on buyers radar yesterday was trading flat.

After experiencing tepid interest in last few days, technology stocks moved up on expectations of better-than-expected third-quarter earnings for IT companies when they report results starting later this month.

Infosys gained 0.68 percent, Tata Consultancy Services rose 0.80 percent, while Wipro strode higher with 0.61% gains.

Shares of gold loan providers remained in focus after an RBI report proposed increasing the loan-to-value, or LTV, ratio to 75 percent from 60 percent currently. Earlier, shares of Jet Airways appreciated 6 percent, a day after a senior Indian government source told reporters the carrier was the front-runner to win an investment from Etihad Airways.

Shares of gold loan firms Manappuram Finance and Muthoot Finance shone in an otherwise listless market Thursday. The Nifty struggled to hold above the psychological 6000-mark as the market is trying to digest the gains of the last couple of sessions.

The Sensex was up 52.36 points at 19766.60, and the Nifty was up 16.25 points at 6009.50.

The buying frenzy in gold loan firms was triggered by the Rao Committee recommendations that non-banking finance companies be allowed to lend 75 percent against the value of the gold pledged, as against 60 percent at present. (More details)

Manappuram was up 20 percent at Rs 40.55 and Muthoot up around 17 percent at Rs 244.

Jet Airways shares climbed over 5 percent to Rs 612 on a report in Business Standard reports that Gulf-based Etihad will buy 24 percent in the company at a premium to market price.

Brokers said the broader market is likely to consolidate at current levels for a while as domestic macro-economic worries could deter buyers at higher levels. Also, investors will be watching third quarter corporate earnings before making up their mind.

The rally in the last couple of sessions was largely sentiment-led after US lawmakers cobbled up a last-minute deal to avert a fiscal crisis caused by the simultaneous expiry of tax breaks and a cut in government spending.

It is widely expected that the RBI will cut interest rates at its January 29 policy review meet. However, most players argue that a rate cut has already been priced in by the market, and that investors would be looking forward to signs of improvement in key macro-economic indicators like fiscal deficit, industrial output and inflation.

According to Rajeev Malik, economist at CLSA, there could be further slippages in government finances in the run up to general elections next year.

The BSE Sensex gains 0.09 percent, while the Nifty is up 0.1 percent. Technology stocks gain on expectations of better-than-expected third-quarter earnings for IT companies when they report results starting later this month, dealers say.

Infosys gains 1.1 percent, Tata Consultancy Services is up 1.3 percent, while Wipro 0.8 percent higher.

Shares in Jet Airways gain 6 percent, a day after a senior Indian government source told reporters the carrier was the front-runner to win an investment from Etihad Airways.

The BSE benchmark Sensex rose for the third straight day by adding over 27 points in early trade today on sustained buying by funds amid a firm trend in the Asian region.

The 30-share barometer rose by 27.16 points, or 0.14 percent, to 19,741.40, with metal, oil and gas and capital goods sectors leading the rise. The index had gained nearly 288 points in the previous two sessions.

Similarly, the wide-based National Stock Exchange index Nifty inched up by 2.85 points , or 0.05 per cent, to 5,996.10. Brokers said sustained buying by funds and retail investors amid a firm trend in the Asian region following strong overnight gains at the US market mainly influenced the trading sentiment.

Meanwhile in the Asian region, Hong Kong's Hang Seng rose by 0.06 per cent in early trade today. The US Dow Jones Industrial Average ended 2.35 per cent higher in yesterday's trade.