Nifty closes below 6000; all eyes on Infosys, IIP, ECB

The lacklustre market finally ended in the red after opening with a 100-point gap up. The entire day was marred by profit booking across sectors. Midcap sector, which had been outperforming Sensex and Nifty, too had a disastrous second day. Volumes remained high at RS 1.5 lakh crore.

The 30-share BSE Sensex closed 3.04 points down or 0.02% at 19663.55, and the Nifty down 2.85 points or 0.05% at 5968.65.

Benchmark indices failed to take advantage of a positive Asian market, which were up on positive Chinese data. Infosys' third quarter numbers and the impending with IIP data are key triggers for market tomorrow. Crucial ECB meet later in the day will refdlect on the close of Europe, which will have an impact on tomorrow's trade.

The oil and gas sector had a decent run after the oil ministry moved a proposal to raise diesel prices to the cabinet. Oil India closed up 3.71 percent at Rs 493.55.  With 3.18 percent gains, ONGC was on top of the heap on Sensex. However, BPCL, HPCL, Reliance were down between 0.03 percent and 1.69 percent.

Meanwhile, Bank Nifty moved 0.6 percent at close after the Cabinet Committee on Economic Affairs approved infusion of Rs 12,517 crore into public sector banks.

Technology stocks were down ahead of Infosys' third quarter earnings tomorrow. IT bellwether Infosys was down 0.34 percent while TCS lost 1.35 percent.

Metals stocks closed in red for the third consecutive session. Tata Steel, Sterlite and Hindalco fell 0.6-1.5 percent.

State-owned power equipment maker BHEL tanked 2 percent. Housing finance company HDFC and FMCG major Hindustan Unileverl declined 0.7 percent each.

Telecom operator Bharti Airtel was down 1 percent as sources say Department of Telecommunication has issued one-time fee demand notice to telecom companies. According to notice, sources say the DoT has asked Bharti Airtel to pay one time fee of Rs 5,200 crore.

State-owned oil & gas producer ONGC closed near day's high, rising 3.41 percent to close at Rs 301.90.

Public sector lender State Bank of India was up 0.7 percent after Rs 12,200 crore bank recapitalisation proposal cleared by CCEA.

Commercial vehicle major Tata Motors gained for the second consecutive session, rising 2 percent. Its market cap crossed the Rs 100,000 crore joining what is now a 14-member club that also includes Reliance Industries, ONGC and Tata Consultancy Services.

Arshiya International fell 20 percent for second day on lay off of top level executives.

Indian stock markets are yet to react to the government's announcement that public sector banks, reeling under asset quality issues, be recapitalised. After a crucial meet of Cabinet Committee on Economic Affair, finance minister P Chidambaram told reporters that about 9-10 banks will be infused with Rs 12,200 crore. The BSE bankex barely moved post the announcement with 9 scrips scrips advancing against 5 declines.

At 14.15 PM, the Sensex was down 45.15 points or 0.23% at 19621.44, and the Nifty down 16.45 points or 0.28% at 5955.05.

SBI was trading flat while Bank of Baroda appriciated 1.30 percent. Top gainers on the Sensex were Tata Motiors, ONGC, HDFC  Bank, Coal India and Wipro with 0.44 percent to 1.97 percent gains. Top losers were BHEL ( down 2.11 percent), Bharti Airtel (1.34 percent), Sterlite (1.32 percent), TCS (1.27 Percent) and HDFC (1.07 percent).

Midcap index has seen a disappointing trade so far. There has been sharp fall in last two trading session. Shree Renuka, Balrumpur Chini, S Kumar, Punj Lloys, Mannapural continue to see profit booking.

Equity benchmarks continued to trade flat to positive after erasing morning gains. The 30-share BSE Sensex went up 18.89 points to 19,685.48 and the 50-share NSE Nifty gained 4.4 points at 5,975.90.

Oil & gas stocks remained on buyers' radar since yesterday on diesel price hike hope. PSU oil & gas producer ONGC rose 2.5 percent while BPCL and IOC were up 0.5-1 percent.

Meanwhile, Asian markets too were trading higher. Hang Seng and Nikkei moved up 0.7 percent while Shanghai rose 0.2 percent.

Back to home, commercial vehicle major Tata Motors gained for the second consecutive session, rising nearly 3 percent after foreign research firms CLSA and Credit Suisse upgraded the stock yesterday.

Country's largest lender State Bank of India advanced one percent on hopes of approval for fund infusion in today's cabinet meeting.

Private sector lender HDFC Bank jumped 1.37 percent whereas its rival ICICI Bank fell nearly one percent after Australia's Perdaman Chemicals threatened the bank with legal action .

Shares of Maruti Suzuki, Jindal Steel, Hero Motocorp and Wipro were up nearly one percent.

However, software services exporters TCS and Infosys were down over 0.5 percent ahead of third quarter earnings that scheduled to be announced tomorrow morning.

FMCG major Hindustan Unilever, top telecom operator Bharti Airtel and state-owned power equipment maker BHEL slipped 1-1.5 percent.

Indian equity benchmarks succumbed to profit-booking and gave up most of morning gains. The morning rally, which was on the back of the government's decision to hike railway fares after a decade, was short-lived with Nifty slipping below the psychological 6000 mark. The positive sentiments of it Asian peers, which were up following China's better-than-expected December exports number, too have failed to enthuse investors.

At 11.10 AM, the Sensex was up only 34.73 points at 19701.32, and the Nifty was flat at 5978.55 with a 7.05 points gain.
 
Top gainers on the Sensex were Tata Motors (2.80 percent), ONGC (2.18 percent) and Coal India (1.57 percent).

Oil and gas stocks like Reliance (up 0.21 percent), ONGC, IOC (1.48 percent), GAIL (0.66 percent), Oil India (2.12 percent), HPCL (0.3 percent) and BPCL (0.64 percent) rallied after the oil ministry moved a proposal to raise diesel prices to the cabinet. The oil ministry has proposed to raise diesel prices by 1 rupee per month for 10 months and to increase the number of subsidised cylinders. BPCL, CMD, RK Singh explained  in an interview on CNBC-TV18, that the proposaal to deregulate bulk diesel sales will save the government Rs 2,300 crore.

Tech major Infosys has not evoked much response from investors on the eve of its third quarter result announcement. The stock was trading flat at Rs 2318.95. However, Tech Mahindra, Mahindra Satyam and HCL Tech were  up between 2.5 percent to 3.5 percent.

Key indices were firm in early trade as the hike in rail fares ahead of the Railway Budget has raised hopes of more bold measures by the government, as it tries to narrow fiscal deficit.

The Sensex was up 86 points at 19752, and the Nifty was up 24 points at 5996.

While the mood remains positive, brokers said buyers were reluctant to take up big positions at higher levels till there is some better clarity both on the economy and corporate earnings fronts. Earlier this week, Fitch retained its negative outlook on India and warned of a ratings downgrade unless the government fixed the fiscal mess.

ONGC and BPCL rose about 3 percent each on hopes that the government will raise diesel and LPG prices shortly.

Other gainers included Suzlon Energy, Sutlej Jal Vikas and Pipavav Defence, up between 2-4 percent.

Among laggards, Lupin, Bharti Airtel, Glenmark Pharma and Idea were down between 1-2 percent.

Auto shares were firm even as auto sales are seen slowing to a 9-year low according to a report in the Mint newspaper.

Investors continue to shun defensives like FMCG and pharma as they feel these stocks will be unable to sustain their pricey valuations.

Brokerage house HSBC has retained its neutral view on the Indian market with a Sensex target of 21,700 for this calendar.

''India has seen a raft of reforms since Sep-2012. Direct transfer of subsidies could be transformational long term. Reforms positive for banks and energy, marginally so for telecom & media, real estate; need tweaking for other sectors,'' the HSBC note said.

''We remain neutral on India within an Asian context. We reiterate our Sensex target of 21,700 for CY13, which assumes a target 12-month forward PE multiple of 14.5 times,'' the note said.