Sensex flat, retail stocks soar after FDI notification

Indian stocks were flat Wednesday after surging over 2 per cent in the previous session. The Sensex traded 13 points higher at 16,178 while the Nifty traded above the crucial 4,850 mark at 0930 hours.

Retail stocks soared after the government notified 100 per cent foreign direct investment in single-brand retail on Tuesday. Koutons Retail jumped 13 per cent on the Bombay Stock Exchange (BSE). Provogue and Shoppers Stop traded with over 10 per cent gains on the BSE. Pantaloon advanced over 8 per cent.

"It is entirely news driven... Sentiments are driving these stocks because most of these companies are not affected by FDI in single-brand retail... There are hopes that FDI in multi-brand retail might come through after elections," Monal Desai, VP & Head (Derivatives) Prabhudas Lilladher said.

Analysts said markets are unlikely to do much though short term moves up to 5,000 levels was possible.

"Markets are likely to be in a seasonally bearish phase for next 2-3 weeks. Midcaps are witnessing a bounce back after a sharp selloff over the last two months. The large cap index which was also oversold is making some kind of a positive divergence. The world markets have not fallen much... so the enthusiasm in markets may continue today," Rohit Srivastava , Fund Manager at Sharekhan said.

Metal stocks saw buying interest. Hindalco, Sesa Goa and Sterlite advanced over 2 per cent on the Nifty. Consumer durables index traded with over 1 per cent gains on the BSE. Realty stocks also traded higher. Most other sectoral indices were flat.
26 stocks on the Nifty index traded higher. On the Sensex, 16 of the 30 stocks were in the green. The market breadth was positive with over 70 per cent stocks rising on the broader BSE 500 index.

Global cues were mostly positive. Markets in Asia were mixed after yesterday's rise. Benchmarks in Japan and Hong Kong traded with small gains while those in China retreated.

Overnight, US markets closed at the highest level in five months on the back of strong earnings by aluminum maker Alcoa. The Dow rose 69.78 points or 0.6 per cent to 12,462.

Markets in Europe also closed higher after ratings major Fitch said that it will not downgrade France's credit rating this year.