(RTTNews) - The Indian market pared most of its early gains to finish on a flat note Thursday. Sentiment was upbeat as Stanchart, Goldman Sachs, Nomura and Morgan Stanley revised upwards India's FY10 GDP forecasts. The Reserve Bank of India also gave an indication that it may revise upwards its growth forecast for the current fiscal year when it reviews policy in January.
Buoyed by the positive news flow and due to strong global cues, the BSE Sensex rose by 200 points to a 1-1/2 month high in the afternoon. However, as the benchmark indexes reached key resistance levels, sudden selling pressure emerged, dragging the market lower into the red for a brief period. A report on food inflation also triggered concerns that the central bank may tighten its monetary policy soon.
India's food price index soared to 17.47% in the 12 months to Nov 21, up from 15.58% a week ago, government data showed on Thursday.
Nevertheless, the benchmarks managed to close in positive territory with moderate gains. The BSE Sensex closed at 17,186, up 16 points or 0.09% and the S&P CNX Nifty rose by 8 points or 0.16% to 5,132.
On the BSE, the mid-cap index ended up 0.39% and the small-cap index gained 0.92%, outperforming frontline stocks. The market breadth was fairly positive, with 1653 gainers versus 1114 decliners. Sector-wise, healthcare, metal and realty stocks showed significant gains, while auto stocks slipped after recent gains.
Cement stocks rose on reports they are about to raise cement prices. ACC rose 2.05%, India Cements gained 1.61%, Grasim added 2.04% and UltraTech edged up 0.81%.
Telecom stocks advanced amid reports that 3G auctions will be held as per schedule. Bharti Airtel ended up 0.87%, Reliance Communication rose 2.54%, Idea Cellular added 0.84% and Tata Teleservices advanced 1.15%.
In the metal sector, Hindustan Zinc, Sesa Goa, Hindalco, Tata Steel and Sterlite Industries advanced after copper and other metal prices rallied on the LME. JSW Steel pared intra-day gains and ended down 0.35% after its group firm JSW Energy fixed the price band of Rs.100-115 a share for its upcoming initial public offering.
Mahindra Satyam jumped over 5% on a brokerage upgrade. ABG Shipyard rose 3.51%, a day after it exited the race to acquire Great Offshore. IT firm Wipro gained 0.87% on reports it will hire 5000 people in the next two months. Tata Elxi which jumped 20% yesterday added another 12% today.
ONGC gained 1.13% after a consortium of the company signed agreements with Iranian authorities to develop gas fields in Iran. Tech Mahindra advanced 3.04% on reports it is mulling a BPO acquisition in Philippines. Mphasis, which is owned by Hewlett Packard (HP), jumped 5.43% on reports it is innovating on the compensation model.
