Sensex Erases Early Gains

( – Indian shares erased early gains to end lower on Thursday due to emergence of profit taking at higher levels.

Investors kept a close eye on parliamentary proceedings after media reports indicated that the government has secured backing from BJD, Trinamool and SP for getting the Mines Bill and the proposed legislation on coal block allocations passed in the Rajya Sabha before Parliament breaks for a recess.

As for Land Acquisition Bill is concerned, Rural Development Minister Nitin Gadkari has written a letter to Congress President Sonia Gandhi and social activist Anna Hazare inviting them to an open debate on the issue while asserting that the bill was “very much in farmers’ interest”.

The benchmark S&P BSE Sensex soared more than 350 points to hit a high of 28,978.74 in early trade as a surprisingly dovish Federal Reserve tone helped to ease worries of a capital flight out of emerging markets, including India.

While removing the word “patient” from its policy statement, the Fed signaled that it intends to proceed cautiously with interest rate increases. The Fed trimmed its outlook for growth, inflation and unemployment, sending the dollar tumbling across the board and pushing back expectations for the first U.S. interest rate hike since 2006 to September.

With the initial euphoria paving the way for profit taking at higher levels, the Sensex reversed direction to end the session down 152.45 points or 0.53 percent at 28,469,67.

The broader Nifty index also erased early gains to close at 8,634.65, down 51.25 points or 0.59 percent from its previous close.

Among the prominent decliners, IDFC, BHEL, SBI, IndusInd Bank, HCL Technologies, BPCL, Axis Bank, Bank of Baroda and PNB fell 2-4 percent.

IDBI Bank tumbled 4.5 percent after selling a 10 percent stake in rating agency firm CARE. SpiceJet slumped 4.4 percent on reports that the Delhi High Court has ordered the aviation regulator to de-register six aircraft given on lease to the airline by two Irish firms.

Gas utility GAIL rallied 2.2 percent, state-run power producer NTPC gained 1.5 percent, steelmaker Tata Steel rose 1.4 percent and oil explorer ONGC closed 1 percent higher.

Wipro rose 0.7 percent on a report that it is in race for SEBI’s fraud detection system upgrade.

Wockhardt shares advanced 1.5 percent. The drug maker said that there were no findings by the U.S. health regulator with respect to data security and control measures at its Chikalthana facility in Aurangabad.

Oricon Enterprises gained 1.1 percent after the company said it had received board approval to acquire 70 percent shares in its joint venture company, Oriental Containers for Rs 105 crore.

On the global front, the Asian markets ended broadly higher, although Japanese shares ended in the red after hitting a fresh 15-year high in early trade. European stocks were flat-to-higher in early trade following strong gains on Wall Street overnight.

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