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Aug 02, 2012, 04.21 PM IST
The BSE Sensex closed rangebound session on a flat note on Thursday due to lack of trigger globally and locally. The first two events of the current week that are Reserve Bank of India's first quarter monetary policy review and Federal Reserve's two-day meeting were completely non-event for the market.
The RBI had kept policy rates and cash reserve ratio unchanged on Tuesday, but raised inflation forecast to 7% from 6.5% for financial year 2012-13 and cut GDP forecast. The US Federal Reserve too kept Fed funds rate unchanged at 0.0%-0.25%, but they say, "We will provide additional accommodation as needed to promote a stronger economic recovery."
Now every market is waiting for the outcome of European Central Bank's rate decision - the last major event of the week - that will be announced at 17:15 hours IST. France's CAC, Germany's DAX and Britain's DAX (at 15:30 hours IST) gained around 0.5% each on hopes of some policy action by the ECB to give a boost to sluggish economy. Even the Dow Jones futures gained 57 points.
But traders looked cautious as they say the market will correct if the ECB does not deliver strong policy measures. Earlier ECB President Mario Draghi had said he would do everything that supports the euro.
Nick Parsons of National Australia Bank says, there is a chance of a rate cut today. "He is much more activists than his predecessor, Trichet. I think that he is well aware of his responsibilities today. I have got confidence that he will handle his press conference in a way that it’s positive for the market," he adds.
Back home, the BSE benchmark had gained around 600 points in previous four sessions ahead of these events. Today the index fell just 33.02 points to close at 17,224.36 on somewhat profit booking. Meanwhile, the NSE benchmark declined 12.75 points to 5227.75 after trading in a narrow range of 5210-5230 throughout the session.
Dipan Mehta, member, BSE and NSE says, it is more likely that the market continues to trade in a particular range. "Although we may have some positive news flow from Europe, it is highly unlikely that the Nifty can sustain and trade significantly above 5,400 levels for an extended period of time," he adds.
NTPC, country's largest power producer, rallied nearly 4% while rival Tata Power tanked 1.5%.
Engineering and construction major Larsen & Toubro and state-owned power equipment manufacturer BHEL went up 0.6% and 1.25%, respectively.
Top software services exporter TCS rose 0.4% while its rival Infosys declined 0.6%. Lenders State Bank of India and HDFC Bank dropped nearly 0.9%.
Oil & gas producers Reliance Industries and ONGC were down 0.8% and 1.25%, respectively.
Top commercial vehicle maker Tata Motors plummeted nearly 2% after yesterday's total sales numbers for July.
In the second line shares, Cummins India shot up 7% and Kale Consultants rallied 20% after strong than expected numbers in the June quarter.
Ashok Leyland, country's second largest commercial vehicle maker, rose over 4% as the company's total sales for July increased 25% year-on-year to 9,785 units.
Voltas gained 3%, which may be led by short covering. The company disappointed the street on margin front, but increase in consumer business in Q1 may also be the trigger behind today's rally.
Manappuram Finance and Titan Industries gained 1-2%. United Breweries Holdings shot up 13% and United Spirts jumped nearly 6%. However, Glenmark Pharma and Mahindra Satyam were flat ahead of first quarter numbers today after market hours.
The broader markets closed marginally higher as the market breadth was in favour of advances in late trade.
The BSE Sensex and NSE Nifty continued to trade lower with marginal losses due to fall in oil & gas, banks and metals stocks. European markets were flat in early trade as traders remained cautious ahead of European Central Bank's decision that will be at 17:15 hours IST.
Indian equity benchmarks remained under pressure due to profit booking. The market had rallied nearly 600 points in previous four sessions on hopes of some monetary measures by Federal Reserve to revive sluggish US growth and some policy action by European Central Bank (ECB).
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