Weekly Report: Markets end flat on expiry week

Markets ended the last week of the financial year on a flat note. Volatility ruled the roost as traders rolled over positions in the March series on Thursday. The Sensex advanced 42 points at 17,404. Nifty was up 17 points at 5,295.

Markets slipped on Monday, dragged by banks and heavyweights. However, bourses recovered on Tuesday before slipping once again on Wednesday. Banks weighed on investors' sentiments, on worries that their mark-to-market losses on government securities would increase after benchmark yields surged as the government announced major part of its borrowing programme in the first six months of the next fiscal. However, Friday saw the markets gaining once again as investors bought shares from the metal and realty pack.

Meanwhile, finance minister Pranab Mukherjee said today that holders of participatory notes, or P-notes, will have no tax liability and a clarification on these notes will be issued in due course.

P-notes are issued by foreign portfolio investors registered with the Indian market regulator, or by their sub-accounts, to investors overseas and they offer the buyer anonymity.

The IT index lost 0.2% at 6,082 levels. Shares of software majors Infosys and TCS ended down over ... each on concerns that profit margins could be impacted after local media reports that the United States had raised the cost of processing H-1B employment visas. Mphasis was also amongst the loser from this space.

BSE power index dropped 2% to 2,091. Consumer durables and PSU indices also slipped, followed by bankex and realty indices.

Shares of telecom companies faced selling pressure after a business daily reported that the Department of Telecom is likely to impose a combined penalty of Rs 1,000 crore on Bharti Airtel, Vodafone and Idea Cellular for violating 3G license norms. Bharti Airtel ended flat at Rs 337. Reliance Communications was also down 6% at Rs 84.

Tata Steel surged 4.7% to Rs 470. Wipro added 3.4% to Rs 439. Auto shares moved up - Maruti Suzuki added 3% to Rs 1,349. Hero MotoCorp advanced 1.8%, followed by Mahindra & Mahindra and Tata Motors.

Meanwhile, heavyweights - ICICI Bank and Infosys slipped 1-3% each.

Unitech declined over reports that the real-estate developer sought the Company Law Board's approval to move a case on a dispute over their telecom joint venture with Norway's Telenor to an arbitration panel, potentially escalating the row. Unitech slipped 3.4% to Rs 28.75.

According to media reports, the Reserve Bank of India will monitor banks’ overseas operations of Indian banks, which have expanded their global operations substantially in the past few years. “SBI, ICICI Bank and Bank of Baroda are among the prominent banks that will face the RBI inspection as some banks have as high as a fifth of their total assets beyond the shores,” the report suggests. ICICI Bank was down 2.6%, SBI slipped 3.2% while HDFC Bank added 1.2% respectively.

Shares in Reliance Industries were hit by concerns about its exploration and production (E&P) business, primarily due to continued regulatory uncertainty over the development of its KG-D6 block. Output from KG-D6 has been declining for more than a year, resulting in a sharp fall in India's gas output and forcing the country to resort to increased imports of expensive liquefied natural gas (LNG). The stock managed to rebound and ended up 0.5% at Rs 748.

Kingfisher Airlines traded lower by 8% at Rs 16.55 as worries about the company's financial stability continued. According to the media reports, civil aviation minister Ajit Singh has warned Vijay Mallya, the promoter of the private sector carrier, to pay his dues in order to keep flying. Kingfisher has a total debt of about Rs 7,000 crore and accumulated losses of about Rs 6,000 crores. The financial crunch has hit Kingfisher's operations with dozens of flights being cancelled, added report.

Bharat Earth Movers Limited (BEML) slipped 4% to Rs 652 on reports that the Chief of Army Staff General V K Singh said he was offered a bribe by Lieutenant General Tejinder Singh on behalf of Tatra and Vetra, suppliers of the vehicles to the company.