Sensex gains 23 points, ends at 16,990

Mumbai: Indian equity benchmarks closed flat for the second consecutive session on Thursday (a expiry day for June series), but rallied 4 per cent in June series on hopes of some policy reforms going ahead as India will get new Finance Minister next week after Pranab Mukherjee resigned. Even the expectations of stimulus measures from central banks aided the rally, though banks disappointed. June series was quite good for the market as compared to previous series as benchmarks fell 5 per cent in May series.

The NSE benchmark rose 7.25 points to close at 5,149.15 after trading in a tight range of 5,125.30-5,159.05 intraday. Meanwhile, the BSE benchmark gained 23 points at 16,990.76.

Traders as well as investors remain cautious as they are not ready to take long positions ahead of European Union summit that will begin on Thursday for two days in Brussels.

The two-day meeting is expected to produce a roadmap for fiscal, financial and political union and agree a package of growth-boosting measures, but emergency intervention to ease stresses in the bond market look doubtful.

The market's attention instead is turning to the policy meeting of the European Central Bank next week where a rate cut is seen as a growing possibility.

"We think the European Central Bank is best suited for post-summit fire-fighting at short notice," analysts at Standard Chartered Bank said in a note. "We expect a 25 basis point rate cut at its July 5 meeting."

France's CAC, Germany's DAX and Britain's FTSE were down 1-2 per cent after weak economic data. Bank of England said banks' third quarter losses increased on default by medium and large firms. The bank expects mortgage spreads to widen significantly in Q3.

Back home, market will now await concrete steps from Prime Minister Manmohan Singh who took charge of the finance ministry on Tuesday and said would take steps to revive economic growth.

Cigarette major ITC rallied 1.5 per cent and top software services exporter TCS rose 1 per cent. Power stocks like Tata Power and NTPC gained for second consecutive session, rising 1.4 per cent each.

Among metals and mining stocks, Coal India and Tata Steel moved up over 1.5 per cent whereas Hindalco and Sterlite lost 1.2-2 per cent.

Country's largest private sector lender ICICI Bank was up 0.5 per cent while its rivals State Bank of India and HDFC Bank slipped 0.9 per cent each.

Top commercial vehicle maker bounced back to 0.4 per cent after falling more than 5 per cent since Wednesday. Two-wheeler major Hero Motocorp climbed 1.6 per cent.

Index heavyweight Reliance Industries and engineering and construction major by sales Larsen & Toubro declined 0.5 per cent each.

Shares of Axis Bank tanked 3 per cent amid hefty volumes. About two crore shares changed hands on exchanges at Rs 960 a share via block deal. Sources said HSBC Bank Mauritius was going to sell its stake in Axis Bank via accelerated book building route.

In the second line shares, OnMobile Global tumbled 17 per cent. Manappuram Finance slipped 3 per cent on profit booking as the stock had rallied 38 per cent in previous three sessions.

Gati declined 1.55 per cent on profit booking; the stock had rallied 7 per cent after Japan's KWE invested Rs 267.7 crore in Gati-Kintetsu Express Pvt Ltd for 30 per cent stake.

Rolta India gained 4 per cent after company redeemed FCCBs worth USD 134.7 million. Educomp Solutions surged over 4 per cent.

Indian Hotels rose 3 per cent as Tata Sons increased stake in company by 4.78 per cent to 24.36 per cent for Rs 497 crore. Brigade Enterprises climbed 15 per cent amid heavy volumes as the comapny signed JV deal with Govt of Singapore for development of residential projects.

For the week, the BSE Sensex and NSE Nifty closed marginally lower.

(With inputs from Reuters)