Markets end flat amid volatile trade

Benchmark shares indices end flat on Tuesday,  amid a volatile trading session, as gains in financials and telecom shares were erased by losses in FMCG and IT stocks. The 30-share Sensex ended up 27 points at 17,426 and the Nifty added nine points at 5,288.

The broader markets outperformed the benchmarks with the BSE midcap up 0.5 per cent and smallcap indices up 0.8 per cent.

The Asian markets closed in the green on hopes of a stimulus from the Federal Reserve. Hang Seng and Jakarta Composite up 1.5 per cent each were the top gainers followed by Nikkei, Taiwan Weighted and Straits Times up 1 per cent each.

European shares joined a global rally in stocks on Tuesday as expectations rose that major central banks will take more policy action to support the world economy, after factory data showed the negative impact of the euro zone debt crisis. DAX gained nearly 1 per cent along with CAC and FTSE up 0.2 per cent and 0.4 per cent, respectively.

Back home, among the sectoral indices, Consumer Durables, Realty and PSU indices closed up 1 per cent each followed by Metal, Oil & Gas and Bankex indices up 0.6 each. Meanwhile, IT and FMCG indices remained in the negative territory, down 0.5 per cent and 0.8 per cent, respectively.

In the financial space, mortgage lender HDFC was up 1.6 per cent at Rs 672 while ICICI Bank was up nearly 1 per cent each while SBI was up 0.3 per cent.

Telecom stocks gained after The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Tuesday gave a split verdict on a challenge by mobile phone operators seeking to overturn a government order requiring them to stop offering 3G services beyond their licensed zones through mutual roaming pacts, lawyers said.

Bharti Airtel was the top Sensex gainer up 3 per cent at Rs 319. Idea Cellular was up 5 per cent and Reliance Communications was up 2 per cent.

IT index was down 0.5 per cent as rupee rose to its strongest level in nearly a month against the Dollar. TCS down 1.4 per cent and Infosys down 0.2 per cent were the major losers.

FMCG stocks continue to witness profit booking after recent gains on concerns that weak monsoon so far may give rise to commodity inflation leading to higher input costs thereby hurting margins. HUL and ITC were both down over 1 per cent each.

ITC lost ground after the Uttar Pradesh government decided to increase taxes on tobacco products from 12.5 per cent to 50 per cent. The state contributes around 5 per cent to ITC's revenue from cigarette sales.

Shares of oil marketing companies such as HPCL, BPCL and Indian Oil have rallied more than 2 per cent each on reports that since April, the revenue loss on diesel and cooking gas has come down by 36 per cent and 44 per cent, respectively.

Among the individual stocks, HPCL gained 4 per cent to Rs 346, followed by Indian Oil up 4 per cent and BPCL up 2 per cent.

The notable gainers among the Sensex stocks were Hindalco, Coal India, HDFC and Gail India up 2 per cent each. Dr Reddy's Labs was up 1.5 per cent after the company on Monday said it has launched generic tablets used for treating post- menopausal osteoporosis in the American market.

Maruti Suzuki extended its gains and was up nearly 1 per cent after the company Monday said it has registered 20 per cent jump in June sales.

Among the losers were BHEL, Jindal Steel and Hero MotoCorp down 1 per cent each. Sun Pharma, Cipla, Tata Steel, Tata Motors and Tata Power down 0.2 per cent-1.5 per cent were the other notable losers.

Among other stocks, Shipping Corporation of India rallied over 5 per cent at Rs 59.75. "The company will increase the freight rate by $200 per standard container effective from 1 July. The increase will apply to all cargo destined for ports in North Europe, the United Kingdom, the Mediterranean and Black Sea region," the company said in a press release.

Shares of GTL Group companies – GTL and GTL Infrastructure soared 9-15 per cent after the board of GTL Infrastructure has approved a proposal to restructure its outstanding Foreign Currency Convertible Bonds (FCCBs) and constituted a sub-committee to negotiate and finalise the terms for restructure of FCCBs.

The market breadth was positive as 1724 stocks advanced as against 1,141 declines on the BSE.