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The markets ended the last session of the week and the first day of the June derivatives series on a monotonous, albeit choppy, note in the absence of any enthusing cues from the global front.
The Sensex was stuck in a narrow range of around 150 points before ending at 24,217, lower by 16 points and the Nifty ended below the crucial psychological support level of 7,250 at 7,230, down five points.
However, the midcap index ended at 8,467, higher by 32 points and the small cap index ended at 9,015, up 30 points.
On the global front, Asia had a mixed day, with the Hang Seng and SET gaining about half a per cent each, while the Nikkei and Taiwan losing by a similar measure.
The European markets, including the FTSE, CAC and DAX, were flat in early trades. Overnight, the Dow Jones had risen 16 points to 16,650, the S&P 500 gained five points to 1,915 and the Nasdaq had added 14 points to 4,239.
But considering that on Thursday, the Nifty had surprisingly posted its largest single-day decline in nearly four months and the Sensex recorded its highest fall since February 3 this year, this should be regarded as a positive session by the market participants.
Moreover, with the markets slipping into a consolidation mode since May 16, one would have to look at the credit policy on June 3, the Budget in the begining of July and/or some big-ticket reform measures on the part of the new government to give further direction to the markets.
On the derivatives front, traders rolled over fewer positions into the June derivatives series, signalling that they could have taken some risk off the table following sharp gains in May.
The rollover percentage of Nifty futures in the May series onto the next month was 60 per cent, in line with the previous month expiry but lower than its three-month average of 65 per cent.
Marketwide rollovers stood at 64.5 per cent as against the three-month average of 62.7 per cent.
On the monetary front, the rupee is stronger at 58.9600/58.9650 versus its previous close of 59.03/04, as dollar inflows from Yes Bank Ltd's share sale for 500 million dollars aided the rupee's gains.
In economy-related news, Reserve Bank of India (RBI) Governor Raghuram Rajan said on Friday he expected to join hands with the country's new government to bring down dangerously high inflation.
Rajan, speaking at a seminar in Tokyo, said the new government's plan to curb food inflation seems sensible and that he expects the public's inflation expectations to fall in the future.
Hindustan Unilever zoomed by 8% at Rs 600 to top the gainers list on the BSE and NTPC soared by 5% at Rs 159.
The pharma stocks also had a healthy day, with Sun Pharma adding 3.3% at Rs 607, Cipla strengthening by 3% at Rs 384 and Dr Reddy's gaining 2.9% at Rs 2448.
On the other hand, the rate-sensitives had a nervous session ahead of the credit policy next week.
SBI weakened by 2.2% at Rs 2,541 to top the losers list on the BSE.
Among the other financial names, SBI shed 1.8% at Rs 2,551, HDFC Bank lost 2% at Rs 794, Axis Bank slid 1.5% at Rs 1,836 and ICICI Bank lost 1.3% at Rs 1,418.
In the auto space, Tata Motors lost 1.9% at Rs 415 and Maruti lost 1.8% at Rs 2,262.
The midcap banking names also took it on the chin. J&K Bank lost a whopping 19% at Rs 1489, Allahabad Bank shed 4.7% at Rs 126, Bank of India shed 4.2% at Rs 311, Indian Overseas Bank lost 3.9% at Rs 77 and Canara Bank lost 3.8% at Rs 416.
In stock-specific news, defence equipment manufacturers made merry at Dalal Street as the new government has swung into action to hike the defence FDI to 100 percent from 26 percent.
BEL, BEML and Pipavav Defence rallied around 5% each as the department of industrial policy and promotion prepared a cabinet note on hiking the defence FDI cap. However, BHEL and L&T surrendered early gains to end marginally in the red.
Rail-related shares surged on media reports that the government is likely to announce foreign direct investment policy for railways soon.
Kernex Microsystem surged 7% at Rs 74.35, Kalindee Rail Nirman rose 5% to Rs 103.35 and Titagarh Wagons gained 5% to Rs 250.
Network 18 jumped 20% to Rs 54 on news that the Mukesh Ambani-controlled Reliance Industries plans to acquire a majority stake in Raghav Bahl’s Network18 Media and Investments and its subsidiary TV18 Broadcast through Independent Media Trust (IMT), of which RIL is a sole beneficiary.
YES Bank gained 3.5% at Rs 569 as the company is set to raise $500 million by issuing fresh shares to a cluster of investors, leading to a dilution of 10-12% in promoter shareholding.
Indian Oil Corporation rose by 2% at Rs 360 on the BSE after posting 40% rise in net profit to Rs. 7019 crore for the year ended March 31, 2014 as compared to Rs. 5005 crore for the year ended March 31, 2013.
Crompton Greaves firmed up over 2% at Rs 182 after the company's profit rose 2.5 times to Rs 63.82 crore in fourth quarter as against Rs 25.27 core profit in same period last year due to an improvement in power systems business and rise in other income.
Voltas gained nearly 4% to Rs 186 after the operating profits for the quarter ended March 31, 2014 was significantly higher by 58% at Rs 123 crores compared to Rs 78 crores for the corresponding period previous year.
DLF rose 3% to Rs 210 after reporting a consolidated net profit of Rs 219.68 crore in Q4 March 2014 as against net loss of Rs 4.19 crore in Q4 March 2013.
Tata Motors shed 2% at Rs 415 after missing estimates by a huge margin, reporting a consolidated net profit of Rs 3,918 crore for the reporting quarter, a drop of 0.68% from Rs 3,945 crore in the same quarter last year.
The market breadth was positive.
Out of 3104 stocks traded on the BSE, there were 1,588 advancing shares as against 1393 declines.