Markets may end the week on a soft note after moving between gains and losses as investors booked some profit after the benchmark indices surged 7% in six sessions of uninterrupted run.
The benchmark Sensex re-captured the19k peak and touched a high of 19,032 in the opening session led by positive cues from the global bourses, but selling pressure seeped in dragging the Sensex to a low of 18,713. However, the Sensex erased some losses in the afternoon session and was trading at 18,781, down 63 points and the S&P CNX Nifty was trading 5,621 down 16 points at 14:30 hours. Markets are headed for clocking there second weekly gain.
Manufacturing activity in India fell to 55.3 in June against 57.5 in May according to Purchase Managers Index reported by HSBC Holdings Plc and Markit Economics. A number above 50 indicates that economy is expanding.
Analysts said that FIIs (Foreign Institutional Investors) have started putting money back into India as the government has started functioning after the summer impasse. The FIIs have poured in Rs 5083 crore in the Indian equities in past five trading sessions. Last week the government raised diesel and cooking coal prices and on Thursday the cabinet gave a conditional nod to Vedanta Resources for acquiring a controlling stake in Cairn India, the deal is valued at around $6 billion.
Cairn India stock was up 4%, at Rs 324. This decision may also boost ONGC’s share prices ahead of follow-on-public issue as Cairn India will have to share royalty payments with ONGC; the stock was up 1.6%.
On the other hand losses in heavyweight RIL (Reliance Industries) capped the gains on the indices. The Central Bureau of Investigation searched the house of upstream regulator V.K. Sibal after Comptroller General Auditor said that they inflated cost of production from KG D6 basin. RIL slipped 4%, to a low of Rs 861.
Auto maker Maruti Suzuki also slipped 2% to Rs 1,128 after it sold 80,298 units in June, down 9% against 88,091 units sold during the same time last year. Bharti Airtel which surged 4% in the past month, succumbed to profit booking and was down 3% after brokerage CLSA downgraded the stock to underperform.
