25th March, 2013 : Political speculation pulls Sensex, Nifty

iiflThe world markets may be heaving a sigh of relief following the developments in Cyprus. However, the Indian equity market ended in the red reversing all its early gains on Monday after media reports stated that Samajwadi Party may pull the plug on the UPA government.

Samajwadi Party chief Mulayam Singh was quoted as saying that “no party can come to power at the Centre on its own.” He said coalition politics has come to stay in the country and asked like-minded parties to come together.

The benchmark indices started off the day with smart gains tracking overnight gains in the US and Asia. Market took cues from Cyprus after the debt struck country sealed a US$13bn deal with troika which includes the European Central Bank, the European Union and the International Monetary Fund averting financial crisis.

Oil & Gas stocks were among the top gainers on Monday after Indian Oil Corp, raised diesel prices by about 1% from Saturday in line with the flexibility given by the government. The S&P BSE Oil & Gas was up 0.5%

The Realty stocks were in limelight after Minister of Housing and Urban poverty Alleviation, Ajay Maken declared that the real estate regulator bill was expected to be bought up for consideration of the cabinet soon. He also said that the government wants to set up a tough regulator for the realty sector with provisions for jail term for developers for putting up misleading advertisements.

The S&P BSE Realty index gained 0.7%. DLF up 5%, HDIL edged higher by 0.3%, Godrej Properties gained by 1.54% and Unitech Ltd was up 1.8%.

Finally, BSE Sensex closed at 18681, down 54 points over the previous close. It had earlier touched a day’s high of 18950 and a day’s low of 18654. It opened at 18894.

“Global markets breathe a sigh of relief after the Cyprus issue out of the way after the country clinched a bailout deal with international creditors. Domestically, market lost sheen as political uncertainty prevailed. Expect additional choppiness on account of F&O expiry coming in on Thursday. In addition, a truncated week could keep the market participants on the sidelines,” says Amar Ambani, Head of Research, IIFL.

The NSE Nifty closed 5,634, down 18 points over the previous close. It earlier touched a day’s high of 5,718 and a day’s low of 5,624. It opened at 5,707.

Infosys, Wipro, Bharti Airtel, Cipla, Maruti Suzuki, Sterlite Inds, Gail India, Coal India, ICICI Bank, Tata Steel, SBI, M&M and ITC were among losers in Sensex and Nifty.

RIL, TCS, Tata Power, Tata Motors, Dr Reddy’s Lab, HDFC, NTPC, ONGC and Sun Pharma were among gainers in Sensex and Nifty.

The advance decline ratio was in favour of bears. 1885 stocks declined against 1025 advancing stocks, while 124 stocks remained unchanged.

The INDIA VIX was up 5% % to close at 16.36. It hit a day’s high of 16.29 and day’s low of 14.92

Stocks which hit 52-week high during the week were Lupin, Nilachal Refractories, Vapi Paper, Dhanleela Inv and SUNWEALTH.

Stocks which hit 52-week low during the week were ABB, Apple Finance, Force Motors, Best & Crompton and Bihar Sponge.

Stocks in News

Gail India declined 2% after Tamil Nadu (TN) stopped the pipeline project in 7 districts of Tamil Nadu. GAIL planned to connect Kerala to Karnataka via TN. TN government will not allow Gail to set up pies on agricultural land.

Adani Power marginally gained by 0.8% after the company declared that the Board of Directors on Saturday approved preferential issue of equity shares to the promoter and promoter group of the company up to 47,86,50,000 shares through Resolution by circulation.

Dr. Reddy’s Laboratories was up marginally by 0.3% after the company announced that it settled a pending case against Nordion Inc. A Canada-based company paid $22.5mn to Dr. Reddy’s to settle a case filed by the former in a United States Court, New Jersey. The settlement was concluded on 20 March 2013, with the receipt of the settlement funds by Dr. Reddy’s.