Markets continue to trade flat in afternoon session

Indian equity benchmarks were trading in a narrow range with a negative bias as gains in power, infrastructure and metal stock were offset by selling witnessed in consumer durables, IT and teck stocks. Further, investors also opted to remain on sidelines ahead of consumer price index (CPI) and wholesale price index (WPI) data for the month of June to be released later in the day. Both Rail Budget and Union Budget failed to woo the investors despite being delivered along expected lines. There was also some cautiousness among investors over the prevailing crises in Portugal. However, sentiments got some support as Finance Secretary Arvind Mayaram has defended the government’s budget target to contain fiscal deficit at 4.1% of GDP in current fiscal to be achievable. Banking stocks, rebounding from a sharp seven-day decline, were trading higher up to 4% on the back of value buying. Stock specific, Unichem Laboratories has dipped around 4% to Rs 188 after reporting 16% year on year drop in standalone net profit at Rs 30.20 crore for Q1 FY15 due higher expenditure and lower other income. On the flip side, Tata Power is up by 1.4% to around Rs 103 after the company has decided to pursue aggressive growth plans and has sought shareholders’ nod to raise up to Rs 7,000 crore through issue of non-convertible debentures (NCDs).

On global front, most of the Asian equity indices were trading in green with Shanghai Composite up by 0.80% and Taiwan Weighted up by 0.26%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,500 and 25,500 levels respectively. The market breadth on BSE was negative, out of 2,406 stocks traded, 986 stocks advanced, while 1,318 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,003.87 down by 20.48 points or 0.08% after trading in a range of 25,095.76 and 24,915.93. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.06%, while Small cap index down by 0.20%.

The gaining sectoral indices on the BSE were Power up by 1.10%, Infrastructure up by 0.89%, Metal up by 0.78%, Realty up by 0.72% and Capital Goods up by 0.55%. On the flip side, Consumer Durables down by 1.90%, IT down by 1.15%, Teck down by 1.02%, FMCG down by 0.57% and Healthcare down by 0.30% were the losing indices on BSE.    

The top gainers on the Sensex were Hindalco Inds up by 3.97%, Tata Steel up by 2.61%, Tata Power up by 1.87%, BHEL up by 1.23% and TCS up by 1.20%. On the flip side, Infosys down by 2.94%, Bharti Airtel down by 2.21%, SSLT down by 2.20%, Wipro down by 2.02% and Coal India down by 1.50% were the top losers on the BSE. Meanwhile, Finance Secretary Arvind Mayaram has defended the government’s budget target to contain fiscal deficit at 4.1% of GDP in current fiscal to be achievable. During budget 2014-15, the government has stated that it will focus on attracting investment rather than reining in spending in order to balance India`s books and revive a weak economy, an approach that fell short of expectations of rating agencies.

Mayaram added that the government would be able to exceed the $9.7 billion divestment target in current fiscal by selling government stakes in both state-owned and private companies as  India`s stock markets were stronger this year than they had been last year. By adding further, he said the government is taking measures for increasing investments in the country to boost economic growth which in turn will enhance tax revenue for the government.

India’s fiscal deficit narrowed to 4.5% of GDP in the financial year 14, as compared to 4.89% of GDP in the FY13. High fiscal deficit has adverse impact on country’s economy as it leads to three macro economic problems such as a balance of payments crisis, high interest rates because of crowding out and high inflation owing to the currency depreciation.

The CNX Nifty is currently trading at 7,457.25 down by 2.35 points or 0.03% after trading in a range of 7,471.65 and 7,426.45. There were 33 stocks advancing against 17 declining on the index.

The top gainers of the Nifty were Hindalco Inds up by 4.02%, Asian Paints up by 2.17%, Power Grid up by 2.07%, PNB up by 2.00% and Tata Steel up by 1.81%. On the flip side, Infosys down by 2.94%, HCL Tech down by 2.93%, Bharti Airtel down by 2.24%, Wirpo down by 2.22% and SSLT down by 2.00% were the major losers on the index.

Most Asian equity indices were trading in green; Shanghai Composite up by 0.80% to 2,063.29, Taiwan Weighted up by 0.26% to 9,520.30, Hang Seng up by 0.46% to 23,341.19, Nikkei 225 up by 0.92% to 15,303.36 and Shanghai Composite up by 0.80% to 2,063.29.

While, Straits Times down by 0.14% to 3,289.47 and Jakarta Stock Index down by 0.14% to 5,025.31