Indian benchmarks show listless performance in noon trades

Indian stock indices failed to exhibit any fervor in the Thursday afternoon trades and are showing listless performance, trading in an extremely tight range lacking any significant upside triggers. Trade remained lackluster in the hour gone by as investors remained reluctant to initiate large bets and evidently preferred to indulge only in stock specific activity amid end of the year position squaring. Meanwhile, India’s weekly food inflation plunged for seventh straight week and slipped to near six years low levels to 0.42% for the week ended Dec 17. The sharp moderation in weekly inflation numbers came as a respite for investors which limited profit booking in rate sensitive counters in the session. Sentiments globally were unenthusiastic as Asian peers traded on a quiet note while European futures too indicated a weak start for the European markets. Investors’ remained cautious globally amid mounting worries over the Euro-zone debt trouble which refused to abate, ahead of an auction of long-term Italian debt later in the day. On the BSE sectoral space, the Metal and rate sensitive Automobile counters traded on a positive note with around half a percent gains and kept the bourses in close proximity with the neutral. But hefty selling pressure was evident in the Oil & Gas pocket which languished at the bottom of the table after being butchered by close to a percent. Some selling pressure was also evident in the Capital Goods and Power counters which lost around half a percentage point.

Moreover, the broader markets too traded on a quiet note around the previous closing levels, performing in line with their larger peers. The bourses consolidated on weaker volumes of over Rs 0.60 lakh core, despite this being the December series F&O expiry session. The market breadth on BSE was in favor of declines in the ratio of 1252:1079 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 15,703.21 down by 24.64 points or 0.16% after trading as high as 15,724.60 and as low as 15,619.00. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading on a flat note; the BSE Mid cap index added 0.04% and Small cap fell 0.24%.

On the BSE sectoral space, Metal up 0.59%, Auto up 0.37%, Healthcare up 0.27% and Bankex up 0.03% were the only gainers while Oil & Gas down 0.90%, Capital Goods down 0.61%, Power down 0.46%, Consumer Durables down 0.44% and Realty down 0.36% were the major losers in the space.

M&M up 1.44%, Sterlite up 1.11%, Hindalco up 0.86%, JP Associates up 0.75% and Tata Motors up 0.67% were the major gainers on the Sensex, while Tata Power down 2.07%, RIL down 1.21%, Maruti Suzuki down 1.13%, L&T down 0.93% and DLF down 0.67% were the major losers in the index.

Meanwhile, India’s weekly food inflation, measured by the Wholesale Price Index (WPI), extended the declining streak for the seventh straight week and slipped to near six years low levels to 0.42% for the week ended December 17. The decline was mainly on the back of declining prices of essential items like vegetables, onion, potato, wheat and other essential commodities.

The sharp slump in food inflation numbers in the last one and half months has come as a sigh of relief for not only economic policymakers but also for the government who had been battling to control the rampant inflationary pressure on the economy since last two years. In a bid to rein inflation, RBI hiked key policy rates by 13 times since March 2010 only to pause the liquidity tightening measures in its recent meeting. Meanwhile, Pranab Mukherjee, Union Finance Minister, does not see the recently plunge in food inflation as impressive since the overall inflation still hovers comfortably above the RBI’s comfort zone.

According to the data released by the Ministry of Commerce and Industry, the index for ‘Food Articles’ group declined by 0.4% to 190.3 from 191.9 for the previous week due to lower prices of fruits and vegetables (4%), jowar (3%), tea and arhar (2% each) and ragi, urad and condiments and spices (1% each). However, the prices of fish-marine   (7%), poultry chicken (2%) and moong, masur, maize, fish-inland and bajra (1% each) moved up.

The index for ‘Non-Food Articles’ group rose by 0.1% to 177.6 (Provisional) from 177.4 for the previous week due to higher prices of gaur seed (8%), safflower (4%), fodder and sunflower (2% each) and linseed, rape & mustard seed, groundnut seed, soyabean and copra (1% each). However, the prices of raw silk (5%), raw jute and castor seed (2% each) and flowers, gingelly seed, raw rubber and raw cotton (1% each) declined.

As a result, the index for ‘Primary Articles’, which accounts for 20.12% of the WPI, declined by 0.1% for the week ended December 17 to 197.5 from 197.7 for the previous week. The annual rate of inflation, calculated on point to point basis, stood at 2.70% for the period under consideration as compared to 3.78% for the previous week.

Meanwhile, the index for Fuel & Power group which carries a weightage of 14.91% rose by 0.2% to 172.7 in the week from 172.4 for the previous week due to higher prices of furnace oil (4%), light diesel oil (3%) and bitumen (1%).  However, the prices of aviation turbine fuel (2%) and naphtha (1%) declined.

The S&P CNX Nifty is currently trading at 4,694.00, lower by 11.80 points or 0.25% after trading as high as 4,701.80 and as low as 4,672.40. There were 21 stocks advancing against 29 declines on the index.

The top gainers on the Nifty were M&M up 1.32%, Sesa Goa up 1.22%, Sterlite up 1.06%, Hindalco up 0.86% and IDFC up 0.84%.

Tata Power down 2.61%, BPCL down 2.39%, Ambuja down 1.85%, R Com down 1.81% and Ranbaxy down 1.39% were the major losers on the index.

Asian markets traded largely on a positive note; Shanghai Composite added 0.13%, Jakarta Composite rose 0.04%, Straits Times gained by 0.03%, Seoul Composite up by 0.03% and Taiwan Weighted advanced by 0.26%.

On the flipside only Hang Seng declined 0.66% and Nikkei 225 slipped 0.29%.