Indian equities exhibit lackluster movements in afternoon session

Indian frontline indices are displaying listless performance in the afternoon session of trade as they look to consolidate the gains amassed in the previous sessions. The aimless benchmarks appear exhausted as they are gradually crawling only sideways in a tight band around the psychological 4,750 (Nifty) and 15,950 (Sensex) levels, lacking any significant upside triggers. The upside for local bourses was limited as investors squared off positions from the rate sensitive Banking and Real Estate counters which traded with over half a percent losses. However, the downside for the bourses too was limited as buying in Capital Goods and defensive Healthcare pockets, prevented the benchmarks from drifting to lower levels. The domestic markets were outperforming their regional counterparts in the noon trades as all the indices traded in the negative terrain with China being the leading loser, plunging over a percent. Investors at large lacked conviction to take big bets ahead of the year end as they concentrated on Euro-zone sovereign debt trouble and cooling global growth. Market participants looked ahead for the European and the US markets for direction ahead of some US economic reports, including the S&P Case-Shiller house price index for October and consumer confidence for December.

Moreover, the broader markets too traded on a flat note with a positive bias with marginal gains, performing in line with their larger peers. The bourses consolidated on weaker volumes of over Rs 0.50 lakh crore. The market breadth on BSE was in favor of advances in the ratio of 1180:1148 while 128 scrips remained unchanged.

The BSE Sensex is currently trading at 15,961.95 down by 8.80 points or 0.06% after trading as high as 16,049.12 and as low as 15,928.92. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index added 0.01% and Small cap gained 0.05%.

On the BSE sectoral space, Capital Goods up 0.68%, Healthcare up 0.24%, FMCG up 0.22%, Consumer Durables up 0.11% and IT up 0.05% were the major gainers while Bankex down 0.65%, Realty down 0.60%, PSU down 0.41%, Metal down 0.31% and Auto down 0.19% were the only losers in the space.

Tata Power up 1.81%, L&T up 1.35%, M&M up 0.98%, Jindal Steel up 0.77% and Wipro up 0.73% were the major gainers on the Sensex, while Tata Motors down 1.66%, DLF down 1.60%, Cipla down 1.37%, JP Associates down 1.36% and Coal India down 1.26% were the major losers in the index.

Meanwhile, India’s foreign direct investment (FDI) declined by over 50% to $1.16 billion in October for the second month in a row, reflecting economic slowdown in the world's major economies. India received $2.33 billion overseas investment in the same month last year. In September, the inflows were at $1.76 billion, down by 16.5% year-on-year.

However, in April-October 2011, the FDI rose 50.3% to $20.8 billion, from $13.84 billion in the year-ago period as inflows were healthy in the initial months. Though in August FDI inflows had increased over two-fold to $2.83 billion, year-on-year, in July they declined after a significant jump for two consecutive months - May and June. 

Uncertain economic conditions in the US and Europe are one of the major reasons for the declining FDI in India. However, despite uncertainties in the global economy, FDI is likely to touch $35 billion in 2011-12, as against $19.4 billion in the last fiscal on account of major deals like RIL-BP and Posco.

Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE are major sources of FDI for India. In April-October 2011, the sectors that engrossed the maximum FDI include services, construction activities, power, computers and hardware, telecom and housing and real estate.

In order to attract more inflows by easing FDI procedures, the Reserve Bank of India said that transfer of shares between Indians and non-residents will not require its permission in several key areas like financial services.

During 2010-11, equity inflows through the FDI route had declined 25% to $19.43 billion, from $25.6 billion in 2009-10 compared to $27.3 billion in 2008-09.

The S&P CNX Nifty is currently trading at 4,774.10, lower by 4.90 points or 0.10% after trading as high as 4,800.50 and as low as 4,765.35. There were 24 stocks advancing against 26 declines on the index.

The top gainers on the Nifty were R Com up 3.74%, Tata Power up 2.26%, R Infra up 1.95%, Ambuja Cement up 1.84% and Ranbaxy up 1.57%.

Tata Motors down 1.93%, Axis Bank down 1.86%, DLF down 1.70%, Coal India down 1.60% and Kotak Bank down 1.45% were the major losers on the index.

Asian markets traded on a negative note; Shanghai Composite down 1.20%, Jakarta Composite declined 0.91%, Nikkei 225 slipped 0.46%, Straits Times eased by 0.01%, Seoul Composite dropped by 0.79% and Taiwan Weighted dipped by 0.11%.

Stock market in Hong Kong remained closed on Tuesday for a public holiday.