Markets trim losses but continue to trade in red

Trade remained choppy in the early noon trade as traders preferred to remain on sidelines amid weak global cues and lacking any trigger from the domestic front. Although some sectoral gauges are showing recovery from their last sessions’ slump but the broader markets performance still remains subdued weighing on the sentiments of the whole markets. Traders have even ignored the reports of improvement in growth outlook forecast of the economy by two global agencies, while the World Bank has said that the Indian economy is set to grow by 6.4 percent in 2015-16 as against 5.6 percent in 2014-15, the International Monetary Fund has hiked its 2014-15 growth forecast to 5.6%, citing better exports and investment prospects. However, there is global gloom in the equity markets, as the IMF has slashed its overall global growth forecast for the year 2014 at 3.3% and 2015 growth of 3.8%, a decline of 0.1% for 2014 and 0.2% for 2015 from forecasts made in July. Back home, though markets recovered from their day’s low but were still moving in the red territory. There is good upmove in the PSU oil marketing companies, supported by the continuous slump in the international crude oil prices.

The BSE Sensex is currently trading at 26223.48, down by 48.49 points or 0.18% after trading in a range of 26173.80 and 26334.35. There were 18 stocks advancing against 11 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.31%, while Small cap index declined by 0.32%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.59%, Oil & Gas up by 1.47%, PSU up by 1.17%, Realty up by 0.84%, Power up by 0.81%, while IT down by 3.62%, TECK down by 2.99%, Consumer Durables down by 0.31%, INFRA down by 0.11% were the major losers.

The top gainers on the Sensex were BHEL up by 2.63%, ONGC up by 2.23%, Larsen & Toubro up by 2.22%, Tata Steel up by 1.79% and NTPC up by 1.32%. On the flip side, Infosys down by 4.37%, Dr. Reddys Lab down by 3.16%, Wipro down by 3.11%, Sun Pharma Inds down by 3.05% and TCS down by 2.86% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) and Finance Ministry are set to finalise a new monetary policy framework by the end of the year under which the central bank will pursue the retail inflation target to be decided by the government. It is reported that the internal work for the new monetary policy framework is in advanced stages and the government will have to take a final decision on it in consultation with the central bank.

Under the new framework, a separate monetary policy committee will be set up which will set the interest rate with a view to ensure that inflation remains within the targeted levels. The move to set a new monetary policy framework came in after the recommendation of  Urjit Patel Committee which had suggested that the RBI should target to bring down retail inflation to 8 percent by January 2015 and 6 percent by January 2016. Earlier, the government had also expressed the need to have a modern monetary policy framework to meet the challenge of an increasingly complex economy.

Considering price stability an essential condition for economic revival, the RBI has been pursuing hawkish monetary policy stance to keep inflation under check. The central bank has not reduced rates in four consecutive policies in spite of pressure from the government and industry to cut policy rate to boost economic growth.

The CNX Nifty is currently trading at 7833.70, down by 18.70 points or 0.24% after trading in a range of 7824.20 and 7869.90. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.91%, BHEL up by 2.76%, DLF up by 2.72%, Indusind Bank up by 2.67% and Jindal Steel & Power up by 2.33%. On the flip side, Tech Mahindra down by 5.89%, Infosys down by 4.38%, Wipro down by 3.23%, Dr Reddys Lab down by 3.20% and Sun Pharma Inds down by 2.98% were the top losers.

Asian markets were mostly in red with only exception being Shanghai Composite, which was up by 16.17 points or 0.68% to 2,380.04. On the other hand, Nikkei 225 declined by 187.85 points or 1.19% to 15,595.98, Hang Seng lost 173.82 points or 0.74% to 23,248.70, Taiwan Weighted was down by 85.63 points or 0.95% to 8,955.18, Jakarta Composite was lower by 53.35 points or 1.06% to 4,979.49, Straits Times was down by 14.42 points or 0.44% to 3,229.57, KOSPI Index decreased by 7.66 points or 0.39% to 1,965.25 and FTSE Bursa Malaysia KLCI was down by 6.9 points or 0.38% to 1,826.64.

The European Markets have made a subdued start; UK’s FTSE 100 was down by 22.33 points or 0.39% to 6,473.53 and France’s CAC declined by 8.76 points or 0.21% to 4,200.38.