The Sensex provisionally rose on Monday, led by recently hit banking stocks such as SBI, while ONGC gained after posting a surge in quarterly earnings over the weekend.
Unperturbed by the country’s slow economic growth and weak monsoon, overseas investors pumped nearly Rs 4,800 crore into stock markets this month so far. But sentiment remained cautious ahead of inflation data tomorrow. Wholesale prices are expected to have edged up in July, giving the Reserve Bank of India less room to cut interest rates at its policy review in mid-September.
In the absence of any positive upside trigger, benchmarks traded sideways up till the last leg of trade, as lack of policy inaction combined with the weak global set-up, prevented traders from putting their money into risky pockets.
The sentiment at Dalal Street were mainly minced after Fitch Rating, which recently lowered India’s credit outlook to negative, averred that possibility of downgrading the country’s sovereign rating is more than 50% in the next 12-24 months. Further prevailing caution ahead of July month’s inflation figure, with crude oil trading near three month high level, also weighed on the sentiment.
“Only two things can change the equation, otherwise the market is stuck in a tight range. If there’s any reforms announced, which is not very probable, or if the U.S. or European announce stimulus measures.” Jagannadham Thunuguntla, head research at SMC investments and advisors Ltd told Reuters.
Moreover, poor monsoon rainfall in India alongside a weakening Eurozone outlook has prompted the rating agency CRISIL to slash India’s growth forecast to 5.5% for FY13, just two months after pruning its projection to 6.5% from 7.0%. According to CRISIL, the revised growth forecast assumes that the stretched fiscal situation will limit the ability of the government to give a generous stimulus to the economy.
However, last minute cherry picking by chic investor’s acted as saving grace for the bourses. Additionally, gains of stocks belonging from Realty, Consumer Durable and Capital Goods counters also winded down a lot of bourses pressure, however Auto counter failed to come out of the blues.
State Bank of India rose 1 percent, after earlier falling as much as 1.5 percent. Shares of India’s biggest lender slumped 4.1 percent on Friday after reporting a surge in bad loans during the April-June quarter.
State-run producer Oil & Natural Gas Corp rose 0.6 percent after the company reported over the weekend a higher-than-expected jump in quarterly profit.
The Sensex provisionally ended up 0.43 percent at 17,633.45 points, while the Nifty rose 0.52 percent to 5,347.90 points.
Maruti Suzuki gained 1.6 percent on rising hopes the auto maker will announce a resumption of production at its Manesar plant after violent clashes between management and workers last month.
Shares in DLF gained 1 percent on local media reports that India’s biggest property developer has agreed to sell a 17.5 acre plot of land in central Mumbai to private developer Lodha Developers.
HDFC, DLF, RInfra, Sterlite Inds, Sesa Goa, Bajaj Auto, Siemens, Bharti Airtel, Wipro, BHEL and Maruti Suzuki were the top gainers on the Sensex and the Nifty.
Hindalco Inds, Tata Motors, Hero MotoCorp, HUL, Tata Steel and TCS were the top losers on both indices.
With inputs from Reuters