Markets pare some gains; Sensex continue to hold 15,600 level

Indian equity markets have given up some gains from the high points of the day but are still managing to hold their crucial 15,600 mark (Sensex) and 4,650 mark (Nifty) with gain of about half a percent. Global cues too remained supportive despite the Labor Department reported that US jobless claims came in at 381,000, up from 366,000 the prior week. Moreover, Chinese manufacturing activity picked up slightly in December. China Manufacturing Purchasing Managers Index rose to 48.7 in December, compared with a reading of 47.7 in November. Back home, all the sectoral gauges barring Capital goods continue to remain in cheerful mood. The sentiments were also supported by IT shares like HCL Tech, TCS, Wipro, Infosys and Satyam Computers which edged higher in the trade after positive economic data in the United States as it is the world’s biggest economy and also the biggest market for the Indian software services exporters. Meanwhile, Interest rate sensitive realty, auto and banking stocks too rose after data on Thursday, showed food inflation hit five-year low, which could prompt Reserve Bank of India to cut in interest rates to revive slowing economy. The overall market breadth on BSE is in the favour of advances which have thrashed advances in the ratio of 1320:793, while 84 shares remained unchanged.

The BSE Sensex is currently trading at 15,609.55, up by 65.62 points or 0.42%. The index has a touched a high and low of 15,694.05 and 15,575.08 respectively.  There were only 21 stocks advancing against 8 declines while 1 stock remained unchanged on the index.

The broader indices too were trading with a gain; the BSE Mid cap and Small cap indices edged higher 0.42% and 0.59% respectively.

The gainers on the index were PSU up 0.73%, Bankex up 0.68%, IT up 0.49%, TECk up 0.48% and Consumer Durables up 0.38% while Capital Goods down 0.10% was the sole loser on the index.

The top gainers on the Sensex were Tata Motors up by 1.56%, ICICI Bank up by 1.45%, HDFC up 1.26%, JP Associates was up by 0.94% and SBI up by 0.83%.

On the flip side, Bajaj Auto down by 1.02%, Jindal Steel down 0.89%, M&M down 0.52%, HUL down 0.40% and Sun Pharma down 0.36% were the top loser on the Sensex.

Meanwhile, Finance Minister Pranab Mukherjee has said that the overall inflation would drop to 6% by March end. The statement of the FM came in backdrop of weekly food inflation declining well below one percent, to the lowest level since April 2006. The latest data from the government showed that food inflation stood at 0.42 per cent as on December 17. Food inflation numbers have been moderating every week since early November when it stood at double-digit.

Pranab Mukherjee said that 'If this trend continues then you will have (fiscal) year-end (headline) inflation around 6%... But it cannot be lower than 6% because inflationary pressure was higher in weeks before'.

The Finance Minister's projection of 6 per cent inflation by year-end is well below the 7 per cent forecast made by the Reserve Bank of India (RBI) which has projected it to fall to 7% by March 2012. RBI has hiked interest rates 13 times since March, 2010, to tame demand and curb inflation. But in a policy shift in its Mid Quarter Policy Review earlier this month, RBI stopped further hikes and hinted that the rate may be cut in case inflation moderates.

The S&P CNX Nifty is currently trading at 4,667.45, higher by 21.20 points or 0.46%. The index has touched a high and low of 4,690.45 and 4,657.35 respectively. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 2.16%, Tata Motors up by 1.59%, ICICI Bank up by 1.50%, Reliance Communications up by 1.40% and Siemens up by 1.35%.

On the flip side, Grasim down by 1.41%, BPCL down by 1.34%, Bajaj Auto down 1.05%, Jindal Steel down 0.91% and HUL down by 0.63% remained the top losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up 18.14 points or 0.83% to 2,191.70, Hang Seng was up 74.84 points or 0.41% to 18,472.76, Jakarta Composite was up 9.30 points or 0.24% to 3,818.07, Taiwan Weighted was up by 6.39 points or 0.09% to 7,081.21 and Nikkei 225 was up by 27.27 points or 0.32% to 8,426.16. 

On the flip side, Straits Times was down 10.78 points or 0.40% to 2,662.00.