Markets gain on August expiry day

Markets recovered from the day lows to end its four-day losing streak on Thursday, following the expiry of August derivative contracts, on short covering in financial shares after recent losses and buying interest in FMCG shares.

Markets remained volatile throughout the day as August futures and options series expired today as traders rolled over positions to the September series.

The 30-share Sensex ended at 17,542 up 51 points or 0.3% and the 50-share Nifty ended at 5,315 up by 27 points or 0.5%.

On the global front, Japan's Nikkei average fell below 9,000 to a two-week closing low on Thursday as hopes that U.S. Federal Reserve Chairman Ben Bernanke will signal more stimulus in his speech on Friday faded, while resources-related shares slid on a weaker outlook.

Uncertainty over central bank action to fight slower global growth sent world shares and industrial commodity prices lower on Thursday, while nervousness ahead of a meeting of central bankers in the United States also curbed risk appetite.

Investors are waiting to see whether U.S. Federal Reserve Chairman Ben Bernanke will provide any hints of a third round of monetary easing in a speech at the meeting in Jackson Hole, Wyoming, on Friday.

Back home, the rupee was trading at 55.6575/6650 versus previous close of 55.6250/6350. Pair has traded in a tight 55.6325-55.75 band ahead of GDP data and the speech from Fed's Bernanke on Friday.

On the sectoral front, BSE Realty index surged by almost 2% followed by counters like Healthcare, IT, TECk and Banks, all gaining by nearly 1% each. Sectors like Power, Consumer Durable, FMCG, PSU and Capital Goods ended marginally higher. However, BSE Metal, Oil & Gas and Auto indices ended marginally positive.

From the Realty space, DLF Limited ended higher by nearly 4% after the country’s largest realty firm decided to end its five-year long association with the Indian Premier League (IPL).

Shares of software exporters such as Infosys and TCS recovered from day lows and ended positive ahead of the key US economic data due for release on Friday. TCS gained nearly 2% while Infosys ended marginally up.

Financial shares ended positive on expectations that the RBI will start cutting interest rates in the coming months to support the slowing economy. HDFC, HDFC Bank, SBI and ICICI Bank ended higher between 0.04-1.2%.

Index heavyweight Reliance Industries witnessed profit taking at higher levels after over 3% gains last week. The stock is down 0.6%. .

Capital goods ended positive ahead of the Apr-Jun GDP numbers due for release on Friday. BHEL gained over 1% whereas L&T ended flat.

Auto shares like Tata Motors, Bajaj Auto and M&M gained between 0.1-1%.

Shares in Hero MotoCorp fell by over 1% after Credit Suisse downgrades the stock to "neutral" from "overweight" and cut its target price to Rs 2,056 from Rs 2,401. Auto shares extended yesterday’s losses on concerns that sales growth in August would remain subdued on account of high interest on auto loans and rising fuel prices.

Meanwhile, BSE Midcap index surged by 0.57% whereas BSE Smallcap index ended marginally higher. The market breadth in BSE ended positive with 1,401hares advancing and 1,347 shares declining.

Smart Movers

Tech Mahindra dipped 5% on reports that its foreign promoter British Telecommunications Plc (BT) is planning to sell part of its holding in IT service provider for $100 million (approx Rs 556 crore).

Shares of Network18 Group companies TV18 Broadcast and Network18 Media and Investments ended higher on report that the market regulator the Securities and Exchange Board of India (Sebi) has cleared the twin rights issues of these companies.

Glenmark Pharmaceuticals rallied 4% its three year high on back of huge volumes.

Hindustan Petroleum Corporation Limited (HPCL) dipped 1% on turning ex-dividend today. The board of state-owned oil marketing company at its meeting held on May 29, 2012, has recommended a final dividend of Rs 8.50 per share.

MphasiS moved higher by 4% on reporting 10% quarter-on-quarter (qoq) growth in consolidated net profit at Rs 209 crore on the back of improved operational performance.