Benchmarks continue to hold their head above water in cautious session of trade

After getting a cautious but positive start, benchmarks continue to hold their head above water in absence of any positive trigger at home front, with investors keenly eyeing the results of IndusInd bank, TCS and HCL Technologies which could dictate the future trend of markets. Holding slender gains, both Sensex and Nifty were trading little short of the crucial 22,500 and 6,750 levels respectively. Nonetheless, the session clearly belongs to broader indices, which outperforming larger peers were trading with gains in the range of 0.25%-0.50%.

On the global front, Asian share markets were mostly in the black on Wednesday after China reported economic growth a touch above forecasts, a relief for investors who had feared a much weaker outcome. China's economy grew 7.4 percent in the first quarter, from a year earlier, beating forecasts of 7.3 percent. That was welcome news to many investors given foreboding whispers that growth would be nearer 7.0 percent following a string of soft numbers recently.

Closer home, stocks from Metal, Consumer Durables and banking counters were supporting the market’s uptrend in cautious session of trend, while those from Information Technology, Healthcare and Realty counters were adding to the underlying cautious undertone. Banking and Auto counters after being beaten blue in previous session of trade were up on some bottom fishing activities. Meanwhile, good china’s GDP growth data lifted Metal stocks higher. The market breadth on BSE was positive, out of 2020 stocks traded, 1123 stocks advanced, while 794 stocks declined on the BSE.

The BSE Sensex is currently trading at 22498.24 up by 13.31 points or 0.06% after trading in a range of 22533.61 and 22458.52. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index up by 0.42%.

The top gaining sectoral indices on the BSE were, Metal up by 1.22%, Consumer Durables up by 1.04%, Bankex up by 0.96%, FMCG up by 0.88% and Auto up by 0.70%, while IT down by 1.77%, Teck down by 1.19%, Healthcare down by 0.20%, Realty down by 0.19% and Capital Goods down by 0.15% were the top losers on the sectoral index.

The top gainers on the Sensex were Hindalco up by 2.53%, Bharti Airtel up by 1.46%, Maruti Suzuki up by 1.45%, Tata Steel up by 1.42% and ICICI Bank up by 1.41%. On the flip side, Infosys was down by 2.83%, TCS was down by 1.90%, Dr Reddys Lab was down by 0.91%, HDFC was down by 0.90% and Wipro was down by 0.66% were the top losers on the Sensex.

Meanwhile, Refuting RBI’s governor and former International Monetary Fund (IMF)’s chief economist- Raghuram Rajan’s charges of quantitative easing in the West setting the stage for another crisis by triggering a savings glut in emerging markets, former chairman of the US Federal Reserve Ben Bernanke said that it was wrong to link currency wars undertaken by exporting nations with monetary measures taken by countries to address the spillover effect of quantitative easing.

He asserted the need for central bankers to remain clear and transparent in policymaking and highlighted the pre-requisite of an independent and responsible central bank for India. Ben Bernanke also made a strong case for inflation targeting and transparency in monetary policy - a move which RBI has been cautious over.

He further averred that monetary policy benefits from clarity and transparency and helps people know to central bank’s targeted interest, particularly in countries where inflation is high. He also took pot shots at the governor, by saying that being in favour of inflation target does not mean that you should ignore everything else.

Bernanke claimed he wanted to take Rajan to task for ignoring money. He said unconventional policies like the US Fed’s of increasing money supply increased demand in the economy, whereas exchange rate interventions like the tariffs of the 1930s were demand diverting.

Rajan had on Thursday called for more global coordination in monetary policy and the creation of a global 'safety net' administered by a multilateral agency such as the International Monetary Fund (IMF). According to Guv, this would avoid the impact of measures like the sudden expansion of global dollar supply and its withdrawal as the US Fed did, which threw emerging economies into a tailspin.

The CNX Nifty is currently trading at 6,741.70 up by 8.60 points or 0.13% after trading in a range of 6,748.65 and 6,724.65. There were 32 stocks advancing against 18 declining on the index.

The top gainers of the Nifty were Hindalco up by 2.72%, Bank of Baroda up by 2.42%, IndusInd Bank up by 1.80%, Jindal Steel up by 1.73% and Tata Motors up by 1.58%. On the flip side, Infosys down by 2.82%, TCS down by 1.94%, BPCL down by 1.65%, HDFC down by 0.96% and Dr. Reddy's Laboratories down by 0.84% were the top losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.33%, Hang Seng increased by 0.74%, Jakarta Composite jumped 0.33%, Nikkei 225 soared by 2.76%, Straits Times added 0.21%, KOSPI Composite rose 0.09% and Taiwan Weighted was up by 0.42%. On the flip side, KLSE Composite was down by 0.22%.