Nifty has to break out of 4,730-4,780 for the next move to be clear

The market closed flat even as the food inflation for the week ended 24th December turned negative.  A weak opening of the European bourses saw the indices giving up their gain in the second half of trade. The National Stock Exchange (NSE) traded on a volume of 51.89 crore which is above its 10-day moving average. The Nifty is moving in a narrow range of 50 points of 4,730 and 4,780. For a trend to emerge there needs to be a fresh move which could happen if the index strongly breaches the range.

The market opened unchanged as investors turned cautious ahead of the quarterly results season which kicks off in a few days. Eyes are also on the Reserve Bank of India’s (RBI) quarterly monetary policy review, slated to take place later this month. On the global front, Wall Street ended flat overnight on lingering concerns about Europe and reflecting the sentiment, markets in Asia opened weak this morning. Back home, the Nifty started the day unchanged at 4,749 and the Sensex gained 10 points to resume trade at 15,893.

Selective buying by institutional investors helped the indices stay in the positive zone till post-noon trade. While the Nifty rose to its intraday high of 4,780 at around 1pm, the Sensex touched a high of 15,980 in early trade.

A negative of the European markets ahead of a government bond auction in France and fears of a possible downgrade in the sovereign ratings of France and Germany pushed the domestic benchmarks into the red in the post-noon session.

While the market made half-hearted attempts to pull itself out of the red, selling pressure kept a cap on the gains, ensuring a flat finish. The Nifty closed unchanged at 4,740 and the Sensex lost 26 points to settle at 15,857.

The advance-decline ratio on the NSE was 962:796.

In line with the key benchmarks, the broader markets also closed on a flat note. The BSE Mid-cap index shed 0.01% while the BSE Small-cap index rose 0.21%.

The sectoral gainers were BSE Auto (up 1.21%); BSE Capital Goods (up 0.95%); BSE Bankex (up 0.46%) and BSE Consumer Durables (up 0.03%). Among the losers, BSE Oil & Gas (down 1.68%); BSE Realty (down 1.65%); BSE Metal (down 0.74%); BSE TECk (down 0.45%) and BSE IT (down 0.35%) topped the list.

Jaiprakash Associates (up 2.77%); Bajaj Auto (up 2.70%); Hero MotoCorp (up 2.33%); Tata Power (up 2.02%) and Mahindra & Mahindra (up 1.83%) led the Sensex gainers. The key losers on the index were DLF (down 4.06%); Reliance Industries (down 2.34%); NTPC (down 2.03%); Coal India (down 1.75%) and Maruti Suzuki (down 1.66%).

The top five stocks on the Nifty were Cairn India (up 4.44%); Punjab National Bank (up 3.93%); Bajaj Auto (up 3.05%); IDFC (up 2.97%) and Ambuja Cement (up 2.83%). DLF (down 4.20%); GAIL India (down 3.35%); BPCL (down 2.39%); NTPC (down 2.15%) and RIL (down 1.98%) were the major losers on the Nifty.

Markets in Asia settled mostly lower on lingering concerns about the debt problems faced by Eurozone countries. Meanwhile, china’s service sector was steady in December from the previous month, the HSBC China Services PMI showed. The weakening of the euro against the dollar ahead of the French bond auction also weighed on the sentiments.

The Shanghai Composite declined 0.97%; the Jakarta Composite shed 0.03%; the Nikkei 225 declined 0.83% and the Seoul Composite lost 0.13%. On the positive side, the Hang Seng rose 0.46%; the KLSE Composite gained 0.68%; the Straits Times added 0.07% and the Taiwan Weighted climbed 0.68%. At the time of writing, the key European markets were down between 0.60% and 0.85% and US stock futures were in the negative.

Back home, foreign institutional investors were net buyers of stocks aggregating Rs138.97 crore on Wednesday. On the other hand, domestic institutional investors were net sellers of equities totalling Rs83.41 crore.

JSW Energy today said one of its promoter entities, Sun Investments, has pledged 6.78% stake of the company. However, the financial details were not disclosed. As per the company’s filing with the exchanges, Sun Investments pledged 540,000 shares of JSW Energy on 28th December. The stock declined 3.70% to settle at Rs39 on the NSE.

State-owned explorer and refining company Oil and Natural Gas Corporation (ONGC) has discovered about 4 trillion cubic feet (tcf) of gas reserves off the Daman coast, which can produce 7 million cubic meters a day of gas in four years. The company is expected to invest $4 billion in developing the reserves and is currently working on a plan to develop the reservoir in the Arabian Sea. The stock fell 1.74% to close at Rs262.05 on the NSE.

Mahindra Lifespace Developers, the real estate and infrastructure arm of the $14 billion Mahindra Group, is looking to raise Rs250 crore in debt before the end of the fiscal to part-fund ongoing projects in various states. The stock rose 1.79% on the NSE to close at Rs252.90.