Sensex gains 39 points amid volatile session

Benchmark indices closed marginally positive amid volatile trading session, led by buying among capital goods shares and index heavyweight Infosys.

Investors remain cautious about foreign flows after overseas investors sold about $720 million of shares in the previous six sessions through Friday, ahead of June quarter GDP data and the expiry of August derivatives contracts this week.

The 30-share Sensex ended up 39 points at 18,558 and the 50-share Nifty ended up 5 points at 5,477 levels.

Fitch ratings said it was getting more challenging for India to meet its fiscal deficit target in the current fiscal year ending March 2014 with revenues slowing.

The rating agency is also monitoring India's growth, inflation, public finances and the current account deficit and its funding, analyst Art Woo said in a teleconference on Monday.

The broader markets out performed the benchmark indices -- BSE Midcap and Smallcap indices gained nearly 1% each.

The market breadth in BSE ended positive with 1,299 shares advancing and 991 shares declining.

GLOBAL MARKETS

Asian stocks rose and gold hit a near three-month high on Monday, extending a move started late last week when a steep drop in U.S. new home sales tempered expectations the Federal Reserve will soon reduce stimulus.

Trading was subdued, particularly in the currency markets, as investors awaited fresh offshore leads amid a lack of market-moving economic news out of Asia.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.5 percent, adding to Friday's 0.8 percent gain.

Hong Kong's Hang Seng Index rose 0.7% to 22005.32, with shares reacting to earnings reports from some of China's largest companies, including one of the country's biggest banks.

European markets are trading weak with DAX and CAC dipping 0.2-1%. FTSE is shut today.

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MONEY MARKET

The rupee weakened on Monday, tracking weaker offshore rates, as sustained foreign selling in equities continued to raise concerns about the gaping current account deficit.

Finance Minister P. Chidambaram met foreign investors on Saturday to seek suggestions on attracting dollar inflows, according to local media reports.

FIIs

Foreign Institutional Investors have sold about $750 million in equities over the previous six sessions.

SECTORS & STOCKS

BSE Power, Capital Goods, IT, Healthcare, TECk, Metal and Realty indices surged between 1-2%. However, BSE Bankex and BSE Oil & gas index dipped between 0.4-1%.

From the capital goods space, BHEL was the top Sensex gainer, up nearly 7%. The company is gearing up for a major transformation in the face of the rupee’s depreciation. The company is reducing dependence on imports through enhanced localisation, optimising designs, increasing vendor base and outsourcing works.

Larsen & Toubro gained by nearly 1% after Barclays upgrades the stock to "overweight", citing a potential recovery in earnings and valuations.

NTPC and Sterlite gained between 2-3%. Sterlite Industries ended higher ahead of merger of Sterlite Industries into Sea Goa.

The Cabinet Committee on Investment (CCI) is likely to set the ball rolling for 28 stalled mega power projects, involving investments of Rs 1,72,000 crore, on Monday. These projects, slated for discussion at the CCI meeting, are expected to get cleared.

IT majors like Wipro, Infosys and TCS have gained between 1-2% on weakening rupee against dollar.

Other notable gainers were Hero Moto, JSPL, Sun Pharma, Dr Reddy’s Lab and Maruti Suzuki.

On the losing side, Oil and Natural Gas Corporation (ONGC) dipped over 3% after the company’s overseas arm ONGC Videsh signs definitive agreements with Anadarko Petroleum Co to acquire a 10%  stake in a gas field offshore Mozambique for $2,640 million (approx Rs 17,000 crore) in cash.

Other prominent losers were GAIL, ICICI Bank, Tata Steel and ICICI Bank.

Ranbaxy Laboratories ended higher by nearly 5% to Rs 403 on back of heavy volumes on the bourses.

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SMART MOVERS

Singer India soared 6% to Rs 108, extending its Friday’s 4% gain, ahead of its April-June (Q4) quarter earnings tomorrow.

VIP Industries rallied 9% to Rs 53 after high net worth individual Rakesh Jhunjhunwala and persons acting in concert acquired additional 1.03 million shares of the company via open market.

IDFC plunged 8% to Rs 95 on BSE after the company has advised all the custodian banks to not make any further purchases through secondary markets on behalf of their foreign institutional investors (FIIs) & non-resident Indians (NRI) clients with immediate effect.

Following the stake-sale announcement, buying interest propped up the share price of Pune-based Hexaware Technologies by about 6%. In an announcement made last Thursday, Baring Asia has agreed to buy 41.8% stake in Hexaware in a deal valued anywhere between Rs 1575 – 1687 crore.

Sesa Goa ended higher by over 5% each ahead of merger of Sterlite Industries into Sea Goa.