The broader market outperformed the benchmark indices as focus shifted to value buying in mid-cap and small-cap shares after the sharp gains on Friday. The Sensex was down 31 points at 17,399 after trading in a 123-point range and the Nifty closed flat at 5,278.
In the broader markets, the Midcap and the Smallcap indices both ended up nearly 1% each.
On the macro front, India's factories in June stepped up production and hired workers at the fastest rate in more than two years, but sagging demand abroad took a toll on growth in new export orders, a survey showed on Monday. The HSBC manufacturing Purchasing Managers' Index (PMI) rose to 55.0 in June, a four-month high, from 54.8 in May. It has kept above the 50 mark that divides growth and contraction for more than three years.
Meanwhile, India's exports fell 4.16 percent year-on-year to $25.68 billion in May, while imports fell 7.36 percent year-on-year to $41.9 billion, government data showed on Monday. May's trade deficit was $16.3 billion.
In Asia, Japan's Nikkei average erased earlier gains to end almost flat on Monday after an early rally spurred by an agreement to stabilize euro zone banks sputtered out as investors waited for more details. The Nikkei ended at 9,003.48, almost unchanged, after having hit two-month high of 9,103.79 at one point.The other notable gainers were Hang Seng, Jakarta Composite, Straits Times up 1-2%
Gains in European markets were capped by the weakening growth outlook. CAC remained closed for the day while DAX and FTSE added 0.8% and 0.5% respectively.
Back home, among the sectoral indices, gains were led by realty up 2% followed by consumer durables, bank, power and metal shares up between 0.6-1%.On the other hand, FMCG, auto and IT closed in the red down 0.2-2%.
Auto index slipped 0.6% on mixed June sales figures. Country's second largest two-wheeler maker Bajaj Auto reported a 1.38% decrease in its motorcycle sales in June at 318,377 units on a y-o-y basis. However, Maruti Suzuki India reported a 20% y-o-y jump in its total sales in June 2012, on back of robust sales growth in Swift, Estillo, Ritz and DZire.Country's second-largest carmaker Hyundai Motor India Ltd today reported a 3.49% rise in its total sales at 54,354 units in June.
IT index clsoed down 0.3% after a foreign brokerage downgraded the sector. Macquarie Equities Research has downgraded IT services sector to "underweight" from "overweight" citing demand concerns as Infosys , which already has 30 percent of staff on the bench, delays joining dates for new hires.
FMCG index lost 2% as ITC and HUL dropped 3% and 1.6% on concenrs that weak monsoon so far may give rise to commodity inflation leading to higher input costs.
The top gainers among the Sensex stocks were HDFC Bank,Bharti Airtel,Sterlite, BHEL,Tata Steel and HDFC, up 1-2% each. Maruti ended up 1% after the company announced 20% jump in total sales during June.
Meanwhile, Jindal Steel lost 2% followed by Tata Motors,TCS, Hero MotoCorp and Bajaj Auto, down 1% each.
Shares of companies engaged in retail business rallied in late noon trades on reports that the government plans to give a big push to foreign direct investment (FDI) in multi-brand retail after the presidential polls this month. Pantaloon Retail (India), Shoppers Stop, Provogue (India), Koutons Retail India and CESC have rallied 3-19% on back of huge volumes on the Bombay Stock Exchange.
Among other stocks, Jubilant FoodWorks rose 5% to Rs 1,224 in noon trades after the company said Domino's Pizza has launched its new product offering – all new stuffed garlic bread.
Punj Lloyd has soared 4% to Rs 51.00, extending its Friday’s 4% gain, on hopes of resuming work on pending projects in Libya.“The company, backed by Warburg Pincus LLC, plans to resume work next month in the North African nation where it has $800 million (Rs 4,400 crore) worth of projects,” the report suggests quoting company’s Chairman Atul Punj.
Ramco Systems soared 8% to Rs 147, its highest level since February 2008, on the Bombay Stock Exchange.
The market breadth was very positive as buying shifted to mid-cap and small-cap shares. 1807 stocks advanced while 1033 stocks declined on the BSE.
