Markets end flat ahead of May WPI

Benchmark share indices ended flat on Wednesday ahead of May WPI data, amid a volatile trading session, as selling pressure in auto shares on reports of steep additional tax on diesel driven vehicles and weakness in Reliance Industries capped gains.

Further, investors remain cautious ahead of the WPI data to be announced tomorrow. Reuters poll sees wholesale price index rising 7.6% in May versus a year ago, the fastest pace for the year.

The 30-share Sensex ended at 16,881 up 18 points and the 50-share Nifty ended at 5,121 up by 6 points. The Sensex and the Nifty reached an intra-day high of 16,944 levels and 5,145 mark, respectively. The Sensex and the Nifty reached an intra-day low of 16,793 levels and 5,095 mark, respectively.

On the global front, most Asian shares ended positive in choppy trade on Wednesday as worries over contagion from Spain's banking sector were heightened after the country's bond yields hit record peaks.  Nikkei, Hang Seng, Taiwan, Kospi and Shanghai Composite gained between 0.2-1%.

European shares turned weak after positive start on Wednesday as worries over contagion from Spain's banking sector were heightened by a sharp rise in the country's borrowing costs. CAC, DAX and FTSE are trading flat with negative bias.

Back home, BSE Capital Goods and FMCG indices surged between 1-2%. Sectors like Healthcare, IT, PSU and Oil & Gas gained marginally. However, BSE Realty, Auto, Consumer Durable and Power indices witnessed selling pressure, all slumping between 1-2%.

Capital goods shares led by power equipment makers ended firm after the recent announcement by the government for expansion of power capacity by 18,000MW. L&T surged by almost 3% on media reports that Japanese engineering major Mitsubishi Heavy Industries is looking to acquire stake in L&T Shipbuilding. BHEL gained by nearly 1%.

FMCG major Hindustan Unilever was the top Sensex gainer, up over 3% on hopes that rural sales would get a boost in wake of the normal monsoon forecast by the MET department. The stock also touched also its lifetime high market price in an otherwise choppy market. ITC ended higher by almost 1%.

Software majors Infosys, TCS and Wipro spurted between 0.2-1%.

Other notable gainers included Sun Pharma, ONGC, ICICI Bank, JSPL and SBI.

On the losing side, shares of automobiles companies witnessed selling pressure on reports that the government may impose a special tax on diesel cars. According to media reports, the government plans to impose additional levies of 170,000 rupees on small diesel cars and 255,000 rupees on medium and large diesel vehicles such as sedans and SUVs. The notable losers from the auto space were Maruti Suzuki, Mahindra & Mahindra, Hero MotoCorp, Bajaj Auto and Tata Motors, down 1-3.4% each.

Index heavyweight Reliance Industries ended down by nearly 1%. According to reports, RIL has warned that production at its KG-D6 field will continue to decline as government is not approving investments needed to boost output.

Other notable losers were NTPC, Sterlite, Tata Power, HDFC Bnak, Cola India, Hindalco and HDFC.

Smart Movers

Shares of cement manufactures extended their Tuesday’s late afternoon rally on hopes of a favorable ruling from the Competition Commission of India (CCI) on cartelisation charges.

Ambuja Cements, India Cements, Madras Cements and UltraTech Cement ended higher by 2-6% on the Bombay Stock Exchange.

Venus Remedies ended 5% higher, extending its previous day’s over 5% gain on receiving patent from the US Patent Office for new antibiotic product which targets drug resistant infections.

Thinksoft Global Services soared over 11% to Rs 64.45 extending its past three days rally on back of huge volumes.

Reliance Communications (RCom) moved higher by 3% to Rs 69 after the company said that on June 12, 2012 the Singapore Exchange Securities Trading Limited has granted an “eligibility to list” to the business trust subject to the requisite conditions being satisfied.

Speciality Restaurants rallied 9% to Rs 217, a sharpest single day gain since its listing on May 30, on back of huge volumes.

Shares of Vijay Mallya-led UB Group companies have rallied on the bourses in otherwise subdued market in morning trades on back of huge volumes.

The broader markets ended mixed with Small-cap index up 0.1% and the Mid-cap index down 0.2%.

The market breadth in BSE ended marginally positive with 1,400 shares advancing and 1,300 shares declining.