Benchmarks trim losses on improving inflation numbers

The Indian equity benchmarks regained some of its lost ground after a weak start and a subsequent sharp fall amid consistence buying at lower levels in a few front line stocks. Improving inflation numbers also helped the market to recover in a good space. Investors were on buying spree as it seems that the RBI may consider cut in interest rates in the next policy meet in January. Meanwhile inflation for week ended December 17, 2011 has came in line with the expectation. Food article inflation has come in 0.42% against 1.81%. Primary articles inflation is at 2.7% against 3.78%, while fuel group inflation slipped at 14.37% versus 15.24. However in the currency market, rupee declined against the US dollar in early trades this morning due to weak stock markets. On sectoral front, power and capital goods stocks were still seen struggling for support. Automobile, realty and healthcare stocks were off their lows. On the global front markets, Asia-Pacific region markets were trading mixed. Back home, the market breadth remained downbeat; there were 1,031 shares on the gaining side against 1,129 shares on the losing side while 103 shares remained unchanged.

The BSE Sensex is currently trading at 15,712.50, down by 15.35 points or 0.10%. The index has a touched a high and low of 15,724.60 and 15,619.00 respectively.  There were only 17 stocks advancing against 13 declines on the index.

The broader indices were trading mix; the BSE Mid cap index up by 0.15% and Small cap index dropped by 0.19%.

The top gainers on the sectoral index were Auto up by 0.43%, Realty up by 0.34%, Metal up by 0.32%, Bankex up by 0.21%, and PSU up by 0.19%. On the flip side Oil & Gas down 0.64%, Power down 0.42%, Consumer Durables down 0.36%, Capital Goods down by 0.28% and FMCG down 0.18% were the top losers on the index.

The top gainers on the Sensex were Hindalco Industries up by 1.54%, JP Associates up by 1.31%, M&M up by 1.27%, Tata Motors up by 1.14% and Sterlite Industries up by 1.00%.

On the flip side, Tata Power down by 2.18%, Jindal Steel down 1.89%, Sun Pharma down 1.33%, RIL down 1.04% and Bajaj Auto down 0.69% were the top losers on the Sensex.

Meanwhile, government has passed a bill to help micro, small and medium enterprises (MSMEs) in dealing with their liquidity problems and to regulate the factoring business. The Rajya Sabha passed the Regulation of Factors (Assignment of Receivables) Bill 2011, in the extended winter session after the bill got nod of Lok Sabha earlier.

Namo Narain Meena, the Minister of State (MoS) for Finance, concluding the discussion on the Bill opined that various committees had recommended development of factoring business in the country, especially for the MSMEs.  The MSME units face various payment problems which will be mitigated by this bill.

The Reserve Bank of India will act as the regulator of Factors and the bill will be applicable to all types of industry whether it is small, medium or big.  The minister also said that the government had accepted suggestions of the Standing Committee and then held consultations with the banking sector also in this regard.

High borrowing costs have impacted the micro, small and medium enterprises the most. Though the government has in the recent past restructured loans of Rs 34,000 crore for big corporates, the MSMEs of the country have been largely overlooked.

The S&P CNX Nifty is currently trading at 4,695.25, lower by 10.55 points or 0.22%. The index has touched a high and low of 4,701.80 and 4,672.40 respectively. There were 20 stocks advancing against 29 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Hindalco up by 1.46%, Sesa Goa up by 1.41%, Tata Motors up by 1.00%, M&M up by 0.96% and Sterlite Industries up by 0.84%.

On the flip side, Tata Power down by 2.77%, RCOM down by 2.09%, Jindal Steel down 1.96%, Cairn down 1.62% and Sun Pharma down by 1.28% remained the top losers on the index.

The Asian equity indices were trading on a mix note; Hang Seng was down by 0.73%, Jakarta Composite was down by 0.25, Straits Times was down by 0.02% and Nikkei 225 was down by 0.29%.

On the flip side, Shanghai Composite was up by 0.04%, Seoul Composite was up by 0.03% and Taiwan Weighted was up by or 0.26%.