Indian benchmarks continue to trade in a tight range; gain 0.30% in noon trades

Indian equity markets have gained some traction in Friday afternoon trades as market sentiments remained positive in pre-Christmas trades tracking markets across the globe which exhibited optimistic trends triggered by a slew of encouraging economic reports from the US. The frontline indices are gyrating around the psychological 4,750 (Nifty) and 15,850 (Sensex) levels amid tentative improvement in investors risk appetite which has led to across the board buying. However, upside for the local markets was limited by reports that RBI may revise the growth forecast for Asia’s third largest economy downward in its third quarter monetary policy review meeting scheduled on January 24, 2012. Meanwhile, an influential brokerage firm CLSA has slashed India’s GDP growth forecast to 6.7% for the current fiscal year ending March, 2012 from its earlier projection of 7.3%, owing to cyclical deceleration caused by high interest rates, policy inertia and the adverse impact of global headwinds. On the global front, investors were cheered by growing evidence of a rebound in the US economy as reports showed US initial jobless claims fell last week to their lowest in more than 3-1/2 years while consumer sentiment there improved in December to its highest level in six months. Back home, on the BSE sectoral space, the Capital Goods index remained the top gainer in the space with close to three percent gains followed by the high beta Realty pocket which traded with around one and half a percent cut. On the flipside, the TECk counter remained the only sector which failed to keep its head above the water and slipped marginally lower.

Moreover, the broader markets too traded on an optimistic note with good gains around a percent, outperforming their larger peers. The bourses gained on strong volumes of over Rs 0.60 lakh core. The market breadth on BSE was in favor of advances in the ratio of 1556:890 while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 15,870.74 up by 57.38 points or 0.36% after trading as high as 15,911.23 and as low as 15,788.99. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index surged 0.94% and Small cap soared 1.52%.

On the BSE sectoral space, Capital Goods up 2.85%, Realty up 1.48%, Metal up 1.25%, Power up 1.03% and Auto up 0.87% were the major gainers while TECk down 0.10% was the only loser in the space.

BHEL up 3.77%, L&T up 3.18%, Sterlite up 2.50%, Hindalco up 1.92% and Maruti Suzuki up 1.86% were the major gainers on the Sensex, while NTPC down 1.31%, Bajaj Auto down 1.02%, ONGC down 0.83%, Bharti Airtel down 0.73% and Jindal Steel down 0.61% were the major losers in the index.

Meanwhile, the Reserve Bank of India (RBI) governor, Duvvuri Subbarao has said that India’s economic growth will probably fail to meet the central bank's GDP target of 7.6% for the fiscal year 2011-12 citing concerns over the domestic macro-economic situation. The governor also was of the belief that RBI may revise the growth forecast for Asia’s third largest economy downward in its third quarter monetary policy review meeting scheduled on January 24, 2012.

Subbarao underscored that factors like stubborn inflation and depreciating rupee are serious cause of concerns for the economy’s growth. On one hand, the headline (WPI) inflation in the month of November stayed above the uncomfortable 9% levels for the twelfth straight month, despite thirteen interest rate hikes by Indian central bank since March 2010. While on the other, Indian rupee has become the worst performing currency in Asia depreciating over 15% in 2011 against the dollar.

The RBI had revised the GDP growth forecast for 2011-12 to 7.6%, from 8% on October, 2011 while, the government cut its full-year growth target to between 7.25 - 7.75% earlier this month from 9% in February. Meanwhile, an influential brokerage firm CLSA has slashed India’s GDP growth forecast to 6.7% for the current fiscal year ending March, 2012 from its earlier projection of 7.3%, owing to cyclical deceleration caused by high interest rates, policy inertia and the adverse impact of global headwinds. 

The S&P CNX Nifty is currently trading at 4,751.80, higher by 17.95 points or 0.38% after trading as high as 4,763.45 and as low as 4,724.05. There were 29 stocks advancing against 21 declines on the index.

The top gainers on the Nifty were Sesa Goa up 4.32%, BHEL up 3.92%, L&T up 3.67%, Sterlite up 2.56% and SAIL up 2.44%.

BPCL down 2.24%, NTPC down 1.47%, ONGC down 1.10%, IDFC down 1.09% and Ranbaxy down 1.04% were the major losers on the index.

Asian markets traded largely on a positive note, Shanghai Composite climbed 0.85%, Hang Seng surged 1.17%, Straits Times added 0.43%, Seoul Composite soared 1.07% and Taiwan Weighted jumped 2.07%.

On the flipside Jakarta Composite slipped 0.12%.

Stock market in Japan remained closed for a national holiday.