Markets end 6-day rally amid profit taking

Markets ended lower on Thursday, following a rally in the previous six sessions, as investors booked profits in index heavyweights at higher levels. However, the downside was capped on buying demand in auto shares.

Meanwhile, investors waited for the outcome of the European Central Bank meeting scheduled later today and amid looming concerns over US fiscal cliff issue.

The 30-share Sensex ended at 18,846 down 56 points or 0.30% and the 50-share Nifty ended at 5,739 down by 21 points or 0.37%. The Sensex and the Nifty touched an intra-day low of 18,736 levels and 5,694 mark, respectively.

On the global front, the Nikkei stock average fell 1.5% to a three-week closing low on Thursday, as worse-than-expected domestic machinery orders figures increased concerns that Japan's economy was slipping into recession and as strength in the yen weighed on exporters.

The yen has gained on worries that the U.S. 'fiscal cliff', a mix of mandated tax increases and spending cuts due to extract some $600 billion from the U.S. economy in the new year, could push the United States and possibly the global economy into recession.

The euro traded near a two-month low on Thursday despite approval of a key austerity package by Greece, though activity was light before a key European Central Bank policy decision.

The ECB is widely expected to leave interest rates on hold at its meeting later on Thursday but comments by President Mario Draghi on the weak outlook and gloomy forecasts from the European Commission have raised speculation it may signal more willingness to ease in future.

Back home, the rupee dropped against the US currency on fresh dollar demand from banks and importers on the back of higher dollar in the overseas market.

On the sectoral front, BSE Capital Goods, Healthcare, Power and Oil & Gas indices plunged by 1% each. However, BSE Realty and Auto indices surged between 1-2%.

Index heavyweight Reliance Industries, the company with second-highest weightage on Sensex fell nearly 0.5%. The central information commission (CIC), the apex body under the Right to Information (RTI) Act, 2005 has directed the Securities and Exchange Board of India (Sebi) to share the details of several entities that were involved in the Reliance Petroleum Insider trading case in 2007. The commission also directed the market regulator to give the details of file notings on the consent order.

Capital Goods major L&T declined by over 2%.

Tata Power was the top Sensex loser, down over 2%. According to reports, delay in commissioning of gas pipelines passing through Odisha seems to have poured cold water over Tata Power's plan to set up a gas-based power plant in the state.

Software major like Infosys slipped by over 1%.

Banking and financial majors like ICICI Bank, HDFC and HDFC Bank plunged 0.2-1.5%.

On the gaining side, Tata Motors was the top Sensex gainer, up 5.52% on hopes of better second half (October-March) of the current fiscal on back of strong product plans.

“The company will launch six new models in the passenger car segment and 25 models in the commercial vehicle (CV) space in the second half in order to bring back momentum in its domestic sales, which have been hit by increasing competition and slow economic growth,” the reports suggests quoting Karl Slym, managing director, Tata Motors.

Bharti Airtel gained by nearly 1%. The Cabinet today approved levy of about Rs 31,000 crore as one-time fee on spectrum held by incumbent telecom firms such as Bharti Airtel and Vodafone in an attempt to create level playing field between old and new operators.

Finance Minister P Chidambaram said the Cabinet has approved the recommendation of an Empowered Group of Ministers that GSM-based telecom operators be asked to pay for airwaves they hold beyond 4.4 Mega-Hertz at an auction-determined price, while CDMA carriers pay for holdings beyond 2.5 MHz, for the remaining validity of their permits.

The broader indices ended on a mixed note. The market breadth in BSE ended negative with 1,459 declining and 1,369 shares advancing.

Smart Movers

Jubilant FoodWorks surged 4% after reporting a healthy 37% year-on-year (yoy) jump in its net profit at Rs 32.34 crore for the quarter ended September 30, 2012 on the back of higher sales.

L&T Finance Holdings (LTFH) rallied 5% to Rs 62 on back of heavy volumes.

Shares of Vijay Mallya promoted UB Group companies mainly United Spirits Limited (USL) and United Breweries (Holdings) rallied up to 7% on TV channel reports that top officials of USL are expected to meet Diageo today to continue discussing a potential stake sale.

OnMobile Global dipped 5% to Rs 40 on the National Stock Exchange after reporting a sharp 87% year-on-year (yoy) fall in its consolidated net profit at Rs 6.22 crore in the September 2012 quarter.

Ipca Laboratories tanked 6% after the company said that it has noticed a few non-conformances at the Indore manufacturing unit during the course of the internal quality assurance review.

Biocon rallied over 4%, extending its over 10% rally after the financial services unit General Electric Company; GE Capital has acquired nearly 8% in the company’s subsidiary Syngene.

Emami Limited ended higher by 4% at Rs 598 after reporting 17% year-on-year (yoy) jump in its consolidated net profit at Rs 59 crore for the quarter ended September 2012, on the back of robust sales of various brands, including Boroplus and Zandu.