Depicting strength, Indian equity markets shaved all its early losses and ended flat with positive bias on Tuesday thanks to defensive buying strategy by market-participants, which lifted the benchmarks from doldrums, thereby proving that market’s new found strength was not temporary. In the first half of the session, profit-booking by market-participants after three consecutive sessions’ record rally on concerns of possible monsoon deficit combined with caution ahead of release of the consumer price index (CPI) inflation data for May and the Index of Industrial Production (IIP) data for April due on Thursday, weighed on the sentiment. However, late hour buying by traders led markets log yet other record high closing levels, with both Sensex and Nifty settling above the crucial 25,550 and 7,650 psychological mark respectively.

Sentiments took a hit in early deals after Indian Meteorological Department (IMD) forecasted rainfall in June-September to be below normal at 93% of the long period average, which in terms of quantity, could be the lowest in four years. While, benchmarks also fell off lifetime high levels in early deals amid concerns the rally that made it the best performer among emerging markets this year has exceeded the outlook for earnings. Nevertheless, besides bargain buying activities, positive regional counterparts also aided the recovery.

On the global front, Asian pacific shares settled higher on Tuesday on account of in-line with expectation China inflation data, which though was higher than the previous month’s figure. China CPI in May rose 2.5% year-on-year, while PPI fell 1.4%.for May. The previous month saw CPI rise at 1.8%, and a 2.0% fall for PPI. Meanwhile, European shares were trading mostly positive as reports showed that industrial production in the U.K and France matched street estimates. In the U.K., a report from the Office for National Statistics showed that industrial output in Europe’s third-largest economy climbed 0.4% in April, while in France, a release showed that industrial output rose 0.3 percent in April.

Closer home, while majority of the sectorial indices on BSE settled into negative territory, stocks from Realty, Public Sector Undertaking (PSU) and Oil & Gas counters were the prominent losers. On the flip side, stocks from Consumer Durables, Information Technology and Healthcare counters were the pillars of market’s strength. Losses of cyclical stocks turned out to be the gains for defensive stocks, like software and pharma, as investors looked to reduce volatility in their portfolios. While rupee’s depreciation aided the IT counter, FMCG stocks, which lost steam after India Meteorological Department (IMD) forecasted rains to be below normal this year as the chances of El Nino occurring during monsoon being very high, too recovered by the end of trade. The stocks tanked in intra-day trade given that most of FMCG firms derive substantial revenue from rural India. The overall market breadth on BSE settled in the favour of declines which outperformed advances in the ratio of 1108:797; while 14 shares remained unchanged.

The BSE Sensex settled at 25583.69, up by 3.48 points or 0.01% after trading in a range of 25347.3 and 25711.1. 14 stocks advanced against 16 stocks declining one’s on the index.   (Provisional)

The broader indices were trading mixed; while BSE Mid cap index was down by 0.27%, Small cap index ended up by 0.26%.   (Provisional)

The top gainers on BSE sectoral front, were Consumer Durables up by 3.55%, IT up by 2.32%, TECK up by 1.98%, Healthcare up by 1.97% and FMCG up by 0.12%. On the flip side, Realty down by 2.96%, PSU down by 1.28%, Oil & Gas down by 0.96%, Capital Goods and India Infrastructure Index were down by 0.90% each were top losers on BSE.   (Provisional)

The top gainers on the Sensex were Cipla up by 2.76%, Infosys up by 2.73%, Wipro up by 2.73%, TCS up by 1.98% and Coal India up by 1.78%. On the flip side, BHEL down by 2.87%, ONGC down by 2.74%, Tata Steel down by 2.60%, Hero MotoCorp down by 2.32% and SSLT down by 2.29% were the top losers.  (Provisional)

Meanwhile, finance Minister Arun Jailtley has stated that the government will soon take measures to break the vicious cycle of high inflation and high interest rates impacting Indian economic growth, which stayed below 5 percent for the second year in a row at 4.7 percent during FY14.

Jailtey further said that long inflationary trends have adversely impacted the food and nutritional security of the common man and also sought states’ support in tackling temporary fluctuation in prices. Further, Finance Minister added that prevailing high interest rates to check rising inflation has been impacting the domestic demand. Therefore, the government would like to evolve a mechanism which will address the structural issues and enhance supply. The RBI has raised lending rate three times since September’13 to tame price rise through cooling demand.

Finance Minister further stated that the government aims to create positive action through economic reforms in the forthcoming budget to revive investor sentiment and promote growth. Regarding the GST issue, Finance Minister said that implementation of Goods and Services Tax (GST) has the potential to significantly improve the country’s growth story and the government will soon take measures for early rollout of GST.

India VIX, a gauge for markets short term expectation lost 2.52% at from its previous close of 16.66 on Monday. (Provisional)

The CNX Nifty settled at 7656.4, up by 1.80 points or 0.02% after trading in a range of 7579.3 and 7683.2. 20 stocks advanced against 30 declining one’s on the index.    (Provisional)

The top gainers on Nifty were Infosys up by 3.17%, Tech Mahindra up by 2.72%, Wipro up by 2.69%, CIPLA up by 2.64% and Cairn India up by 2.28%. On the flip side, DLF down by 3.63%, Grasim Industries down by 3.37%, Ambuja Cements down by 3.14%, BHEL down by 3.08% and Tata Steel down by 2.91% were the top losers.

European shares were trading mixed; with Germany’s DAX rising by 0.14%, France’s CAC 40 gaining by 0.12% and United Kingdom’s FTSE 100 declining by 0.46%.

The Asian markets concluded Tuesday’s trade mostly in green,

Asian Indices Last Trade Change in Points Change in %
Shanghai Composite 2052.53 22.03 1.08
Hang Seng 23315.74 198.27 0.86
Jakarta Composite 4946.09 61.01 1.25
KLSE Composite 1876.61 12.92 0.69
Nikkei 225 14994.80 -129.20 -0.85
Straits Times  3293.82 -11.38 -0.34
KOSPI Composite 2011.80 21.76 1.09
Taiwan Weighted 9222.37 59.63 0.65