Markets continue to remained subdued after posting four consecutive days of gains on back of lacklustre global cues.Nifty was unable to cross 5500 decisively, the 50 stock S&P CNX Nifty was up 17 points, at 5499 and the Sensex surged 46 points, at 18,342.
Among individuual stocks RCom (Reliance Communication) climbed 0.7% after falling as much as 2.8% after Anil Ambani was questioned on Wednesday by CBI regarding allocation of telecom spectrum. There are reports that brokerage JPMorgan cut target price on RCom by 49% to Rs 82. Other ADAG shares also pared some losses, Reliance Infrastructure was up 0.2% and Reliance Power was down 0.4%.
FIIs (Foriegn Institutional Investors) continued to remain underweight on India on account of macro concerns and downside risks to earnings. Michael Kurtz, Head of Strategy, Asia, Macquarie Securities Group, said, "there are concerns amongst investors that Indian companies are facing margin pressures from the rise in basic material and key input prices." Kurtz added, "while India has gotten cheaper than it was at the end of 2010 and relative to India's long term average, rest of Asia has gotten cheaper at the same time."
Moreover, FIIs do not see Union Budget as an important event for fund flows to come back. Kurtz said, "I don not think the Union Budget is going to be critical for FII flows. There more important events to occur such as Monetary Policy in the next 12 months. On political front, how the policies evolve before and after state elections need to be watched." FIIs have withdram $1.7 billion from Indian equities so far this year according to the data released by Securities and Exchange Board of India.
Metal shares were leading the gains. The BSE metal index was up 0.6%. Steel Authority of India gained 2.1%, Tata Steel surged 1.3% and Hindalco was up 0.5%.
Oil & Gas shares were trading in the red, the BSE oil & gas index slipped 0.5%. Cairn was down 1.5%, ONGC dipped 0.8% and GAIL was off 1.2%.
Broader markets outperformed the benchmark. The midcap and smallcap indices were up 0.8% and 0.9% each.
Top gainers on the Nifty were IDFC, up 2%, HDFC rose 1.9% and Ambuja Cements advanced 1.8%. HCL Technologies, down 1.4%, Kotak Bank off 0.9% and Hindustan Unilver fell 0.8% were the top losers.
