The benchmark indices ended on a subdued note in contrast with the insanity prevalent in the previous session. The Sensex ended at 17,560, higher by 54 points and the Nifty shut shop at 5275, up 17 points. The midcap index ended at 6583, lower by 14 points and the smallcap index ended at 7874, down 33 points. IT and oil stocks led the day's gains.
The benchmark indices had gone into a tizzy in the previous session on fears that the government may re-visit the Indo-Mauritius double taxation avoidance treaty in an attempt to tax capital gains on investments routed through Mauritius. And the woes were only compounded by the weak cues from the global market front in wake of the inability of European governments to agree on a loan payment scheme to spare Greece from default.
The return of stability across the Asian and European bourses seems to have soothed ruffled feathers back home, atleast for now. The oversold conditions, what with the markets hitting four-month closing lows on Monday, also facilitated the pullback in the current session. In fact, the BSE benchmark had soared more than 200 points in mid-morning trades before paring a considerable portion of its gains on Finance Minister Pranab Mukherjee's statement that India had indeed resumed talks with Mauritius on a double taxation avoidance agreement.
There was green across Asia, with the exception of Shanghai; Hang Seng, Nikkei, Straits Times and Seoul indices gained in the region of about a percent each. Ditto with the European indices, with the CAC, FTSE and DAX gaining in the same proportion in mid-day trades ahead of the vote of confidence to be faced by the newly reshuffled Greek cabinet later in the day, which could pave the way for another bailout. Euro-zone finance ministers have given Greece two weeks to unveil stricter austerity measures in return for another 12 billion euros in emergency loans. Trading in US index futures also indicates that the Dow could gain around 50 points at opening bell ahead of the FOMC meet starting today. There is speculation that the Fed may a third quantitative easing program after the current one expires in June 2011. The Dow Jones had climbed 76 points and Nasdaq had gained 13 points overnight.
The IT index broke a four-day losing spree to emerge as the leading sectoral gainer on the BSE. TCS soared by 3.2% at Rs 1104 to top the gainers list on the BSE. Index heavyweight RIL reversed its 7-day losing streak, adding 1.6% at Rs 848 and HDFC gained 1.7% at Rs 642.
On the other hand, Jaiprakash Associates weakened by 3.9% at Rs 75, DLF shed 2.9% at Rs 212 and Reliance Infra extended its previous day's losses, shedding 2.35% at Rs 537, on the news of being excluded from the BSE index. Banking heavyweights, SBI and ICICI Bank also shed a percent each. The other ADAG stock, Reliance Communication ended virtually unchanged at Rs 87 after the mauling received on the previous day.
The market breadth was negative. Out of 2898 stocks traded on the BSE, there were 1127 advancing stocks as against 1665 declines.
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