Nifty holds 5100 on weak global cues, Essar Oil plunges

A quiet start for the stock markets today with the Sensex and Nifty opening flat despitr weak glbal cues. Sensex is up 23 points and the Nifty is holding on to the 5,100 mark, as investors digest a spate of negative newsflow from the overseas markets amid disappointment over the government’s measures announced on Monday to boost the Rupee. Once again, the broader indices are faring a tad better than their Large-Cap peers.

Sudarshan Sukhani of s2analytics.com believes this upmove is about to face a hurdle. Speaking to CNBC-TV18, Sukhani says “the chances are that we are going to see some kind of a correction coming in.” In such a scenario, his advise to investors is to step aside because corrections are difficult to trade. On the other hand, he advices traders to take up short positions. “A reasonable assumption is that one would see the Nifty drift down to a zone of 4,950 to 5,000,” he said.

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The rupee was largely flat in opening trade tracking overall caution in risk assets, with investors still disappointed about the lack of bold measures to prop up the currency. At 9.08 am. the rupee was at 56.90/93 to the dollar versus 57.01/02 last close. Traders said any RBI intervention will be closely watched if the rupee moves towards its record low of 57.32 hit on Friday

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TCS, DLF, Coal India, Maruti, BHEL, Tata Power, ONGC, L&T, Sun Pharma are among the gainers in Sensex and Nifty. Infosys, Wipro, Tata Steel, Bajaj Auto, ITC, PowerGrid, Axis Bank are among losers in Sensex and Nifty.

The BSE Small-Cap index and BSE Mid-Cap index was trading flat. OIL&GAS, Consumer Durables, Capital Goods, Realty, Power, PSU,HC indices are the gainers. FMCG, Teck, Metal and IT indices are the the losers.

It was assumed that something big lay in store as the Finance Minister himself had indicated over the weekend of significant new measures to bolster the battered rupee. However, the RBI’s package to shore up the local currency failed to impress the markets.

Meanwhile, the Finance Ministry will turn headless from today, as Pranab Mukherjee braces for the presidential polls. Who takes charge of this crucial ministry could have a bearing on the sentiment temporarily. What eventually will matter is the kind of policy action that UPA II opts for to revive the comatose economy.

European markets plunged on Monday, with peripheral indices pacing the slump, as optimism about the EU summit faded. Also, Moody’s has downgraded 28 Spanish banks while Cyprus has become the latest eurozone member to request a bailout. Greek finance minister Vassilis Rapanos has resigned for health reasons.

Stocks in news

SpiceJet rises 1.37 percent at Rs 33.20 aon BSE on report the company is in discussions with two West Asian airlines, Etihad Airways and Qatar Airways, for a minority stake sale.

Essar Oil declined 2.5% as Essar Energy plans to appeal HC’s decision in sales tax case (in case of Essar Oil) to SC. The Gujarat High Court on Monday rejected Essar Oil Ltd’s plea for relief in repayment of over Rs 8,000 crore due as sales tax deferment liability and directed the state to expedite the recovery.

Kingfisher Airlines is up marginally on reports that NBFC LKP Finance has acquired optionally convertible debentures worth Rs 160 crore of Kingfisher Airlines from an investment company owned by Vijay Mallya which will translate into an equity stake of up to 8% in Kingfisher Airlines upon conversion.

Manappuram Finance is up 8.5 percent after reports that Baring India Private Equity has picked up a 5.94 percent stake in the gold finance company for an estimated Rs 136 crore.

Ashok Leyland is up half a percent after India’s second-biggest truckmaker said it is adding small goods carriers and expanding overseas to claw back market share. The company plans to add 25 models in FY13.