Sensex, Nifty end in red for 3rd straight day; ONGC up

After a volatile trading day, the market closed on a negative note. The Nifty struggled a lot to stay above the crucial 5550 mark and ended just at 5553.25, down 21.50 points. The Sensex fell 86.41 points to close at 18423.2.

Midcaps clawed back today while oil and gas stocks added strength to the indices. ONGC (up 2.2 percent), Reliance (up 1.8 percent), BPCL (up 1.5 percent) were major gainers among the oil and gas stocks.

Adding 7.2 percent, Maruti remained the star of the day as broking firms re-rated the stock on lower royalty payments and import cost, denominated in yen. The Japanese currency hit 3-1/2 year low.

Sugar stocks were excited in trade after the cabinet decided to do away with the regulated release mechanism and the obligation of levy on sugar mills. Balrampur Chini gained 3.2 percent while Shree Renuka was up 2.4 percent.

Meanwhile, on the losing side were HDFC, ITC, NTPC, Bharti Airtel and ICICI Bank. ITC was down 2.8 percent at the end of the day as dealers said the company has hiked select cigarette brands' prices by Rs 20 for a pack of 20.

Adani Power cracked 3.7 percent as reports suggested that the Haryana govt has decided to challenge CERC's order on Adani Power. Adani Power had asked for a tariff hike of around Re 1 a unit, which pushes up the cost of power for Haryana discom to around Rs 4 per unit.

The Nifty is consolidating around 5550 after breaching it on the downside during the day. Blue chip stocks like L&T, JP Associates, Reliance Industries took a breather in trade today after heavy battering in previous sessions.

The Nifty has lost 173 points or 3 percent in last two days. FIIs have turned net sellers in the market pulling out close to Rs 700 crore in the same period.

Political uncertainty and deteriorating economic data is dampening the mood of investors and traders at Dalal Street.

The government is pressing hard to revive the slowing economy by taking measured steps. Last evening, the government partially decontrolled sugar sector with certain riders. Sugar companies realisations will go up post this move.

The Sensex is down 80 points at 18428 and the Nifty is down 28 points at 5547.

Maruti Suzuki is star performer of the day. The broking firms are re-rating the stock on lower royalty payments and import cost, denominated in yen. The Japanese currency has hit 3-1/2 year low.

Wipro, GAIL, ONGC, Jindal Steel are top gainers on the Nifty. NMDC, NTPC, HDFC, IDFC and ITC are top losers.

The market saw very slight recovery as the Nifty climbed back above 5550 led by Maruti, BPCL and GAIL. The Nifty was at 5563.90 down 10.85 points while the Sensex fell 25.83 points to 18483.87.

Among the other lead gainers in the Sensex were Bajaj Auto, Jindal Steel and ONGC up around 2 percent each.

Meanwhile, ITC cracked nearly 2 percent as dealers said the company has hiked select cigarette brands' prices by Rs 20 for a pack of 20.

HDFC (down 3.2 percent), NTPC, ICICI Bank and Bharti Airtel continued to be laggards of the day.

In the forex market, the euro rose to 1.29, while the dollar index was just below 83. The yen gained some ground after slipping to 3.5 year lows. In commodities space, brent crude was subdued around 106 dollar levels.

Important data to watch out for in the US today is farm pay rolls for the month of March which is expected to dip to 200,000. However, unemployment rate is expected to remain unchanged at 7.7 percent.

The much hyped support level of 5550 for the Nifty by technical analysts has been breached in trade today. The Nifty is now trading at 5540, a level last seen on 20 September last year. FIIs have sold shares worth Rs 700 crore in last two years. One needs to keep an eye on FIIs trading activities in days to come.

Technical Analyst, Sudarshan Sukhani is of the view that traders should sell on every rally. A close below key support level of 5550 for two successive days will suggest more downside for the Nifty.

Nifty 5200 Put has added 2.8 lakh shares in open interest, an ominous sign for the market. India VIX is up 3.7 percent at 16.44.

The Sensex is down 94 points at 18414 and the Nifty is down 32 points at 5543.

Maruti Suzuki, GAIL, HCL Tech, UltraTech Cement and Jaiprakash Associates are top gainers on the Nifty. HDFC, NMDC, NTPC, ITC and Ambuja Cements are top losers.

The rupee is heading towards 55 mark tracking euro's gains versus global dollar. Local stocks see two sessions of big falls, raising concerns about foreign fund pullout. Technical charts show next key resistance at 55.15, the March 4 high and the important 76.4 percent retracement on the 55.89-52.87 decline.

European markets open flat in trade today. Gold fell for a fourth day on Friday, holding near its lowest point since May last year, as investors await US jobs data for more clues on the health of the world's largest economy.

The market was still reeling under selling pressures. The Nifty broke the crucial 5550 level on the downside. The Nifty was at 5540 down 35 points while the Sensex lost 108 points to18400.

Realty and oil and gas stocks were lending strength to the indices.

Maruti (up 4.4 percent) was the big index gainer today. CLSA has a buy rating on the stock with a target of Rs 1850. It says the outlook for Maruti's margins has improved with the weakening yen.

GAIL (up 2.7 percent) was doing well after UBS upgraded the stock to a buy with a target of Rs 405. The transmission business seems to have bottomed out and concerns are priced in.

Essar oil was up 3.3% after the company completed the process of exiting the corporate debt restructuring loan facility, set up in December 2004 to help construct its Vadinar refinery in Gujarat.

Meanwhile, big losers of the day included NTPC, HDFC, ITC, ICICI Bank and Wipro.

Adani Power (down 2.9 percent) was under pressure. Reports suggest that the Haryana govt has decided to challenge CERC's order on Adani Power. Adani Power had asked for a tariff hike of around Re 1 a unit, which pushes up the cost of power for Haryana discom to around Rs 4 per unit.

The Sensex is down 50 points after trading flat for first one hour of trade. The Nifty is not making an attempt to past above 200 Day Moving Average. Analysts feel 5500-5550 remains a good support level for the market.

The Nifty is down 12 points at 5563. The breadth of the market is positive. About 1065 shares have advanced, 781 shares declined, and 1708 shares remain unchanged.

FMCG and IT stocks are major laggards in trade today. Auto stocks see some buying after stocks getting hammered this week on sluggish sales forecast for FY14.

The yen slumped to three and half year low on Friday after the Bank of Japan unveiled a bold plan to pump money into the economy.

Analysts say weakness in yen to benefit Maruti Suzuki. It will improve operating margins since royalty payments which are denominated in yen account for 5-6% of its sales. Also cost of component imports which contributes 19-20% of sales will come down. The stock is up 3 percent.

Sugar stocks are up 5-7% as the CCEA last night announced measures for partial sugar decontrol. Brokerage houses estimate realisations of sugar companies will improve on abolition of levy obligation mechanism.

DLF is up 2 percent after the company sold wind assets worth Rs 250 crore today. The company says sale is in line with divesting its non core assets. It will use the proceeds to pare off the debt. DLF will close the deal on Karntaka power asset sales very soon.

Essar oil is up 5 percent as the company has exited from the CDR loan facility set up in December 2004 and has raised 500 million dollars. 

Sugar shares surged in early trade Friday following the Cabinet decision late yesterday to decontrol sugar sales . But the broader market continued to be under pressure as investors were wary of buying stocks despite the steep correction in prices over the last few sessions.

The BSE Sensex was down 33 points at 18476 and the Nifty down 7 points at 5567.

Shares of Bajaj Hindusthan, Balrampur Chini and Shree Renuka Sugars were up 7-9 percent as realizations are expected to improve now that government intervention has been scrapped.

"We estimate the impact on earnings for Balrampur at Rs 3.5/share annually and the fair value impact at Rs 25/share based on cost of equity of 14 percent," said a note by brokerage house Jefferies.

"Whilst we await the fine print and timeframe of its applicability, we estimate removal of the 10% levy quota if effective from April 1, 2013, would imply average sugar realizations improving 4% and street EPS estimates having upside of  around Rs 3 for Balrampur Chini and Rs 0.6 for Shree Renuka Sugars," said a Morgan Stanley note to clients.

Brokers said the mood in the market was quite nervous following the steep fall in large cap shares in the last couple of sessions. Talk is that foreign-owned exchange traded funds investing in Indian equities have turned sellers as they are facing redemption pressures in their home market. This in turn, could trigger selling by other fund houses as they try to cash out before stock prices decline further.

Maruti, GAIL and Bhel were the key gainers in the Sensex, up 1-2 percent, while ITC, HDFC and Wipro were among the laggards, down around a percent each.

DLF shares were up 1.5 percent after the company said it had raised Rs 240 crore by selling renewable energy assets, a non-core business.

Essar Oil shares were up around 5 percent on a report that the company has exited the corporate debt restructuring cell, and that it would use the external commercial borrowing (ECB) route to refinance its debt.

Among second line shares, MMTC, AstraZeneca Pharma and Jain Irrigation were among the key gainers, up around 2 percent each.

Overall, midcap shares were faring better than their large cap counterparts, where there worries about further selling by foreign institutional investors.

Shares from the realty, auto, and oil & gas sectors were in demand, while those from the IT and FMCG sectors were slack.

According to Ajay Srivastava of Dimensions Consulting, the market was likely to be volatile for some time, as most investors would prefer to take short term calls.