Markets pare gain but manage to hold in green

The domestic bourses are managing to trade in green with gain of around half a percent. The markets have got a gap-up start and recovered what they lost in last session. Once again the rate sensitives have taken the lead, while the IT sector was still under pressure and selling in majors like Infosys and TCS was visible for the second day in a row. The markets have gained due to some strength in market heavyweights like L&T, SBI and Bharti Airtel along with Coal India and Reliance Industries. The confidence in the market was also taking support of the rise in rupee which strengthened on easing worries about the euro zone.

The BSE Sensex was trading at 16,090.16, up by 52.65 points or 0.33% and has touched a high and low of 16,168.99 and 16,077.48 respectively.

The broader indices have been showing smart move for the last some days and even today were outperforming the benchmarks. The BSE mid Cap index was up by 1.27% and the BSE Small Cap index was up by 1.38%.

The top gaining sectoral indices on the BSE were Realty up by 2.33%, Power 1.84%, Capital Goods up by 1.80%, PSU up by 1.32% and Metal was up by 1.20%.

On the other hand IT down by 0.43% and the defensive sector Health Care up by 0.07% were the two laggards in the BSE sectoral space.

The top gainers of the Sensex were Tata power up by 3.33%, Tata Motors was up by 2.84%, Coal India was up by 2.83%, Bharti Airtel was up by 2.51% and DLF was up by 2.43%.

On the other hand Hindalco Inds down by 1.17%, Hero Motocorp down by 1.09%, HDFC down by 1.03%, GAIAL India down by 0.97% and Bajaj Auto down by 0.96% were the major losers on the Sensex.

Meanwhile, exuding confidence over the recent set of encouraging economic indications, Union Finance Minister Pranab Mukherjee affirmed that the government will resort to proactive measures in order to keep the growth momentum going. The finance minister’s avowal came after the announcement of pleasantly surprising November industrial output figures which showed IIP surpassed all estimates to stage a sharp rebound to 5.9% in November while food prices fell for the second consecutive week as food inflation remained in the negative zone at -2.90% for the week ended December 31, 2011.

The finance minister was of the belief, if the growth trend in IIP numbers persists from here on, then the industry will certainly deliver an improved performance in the last quarter of this financial year, provided the government employs  some proactive measures. He underscored that building on this recovery with a stronger performance of capital goods and therefore investments would lead to recovery in growth momentum in the remaining months of the fiscal year.

Mukherjee also reckons that moderation in inflation would continue in coming months though, softening in the prices of manufactured goods, despite the rapid decline in non-food primary inflation, may be more gradual. He maintained if the declining trend persists then the overall inflation will be manageable and also said that the headline inflation should be between 6-7 percent by end March 2012.

However, food prices are likely to resume the rising trend and even reach around 7% mark by March-April, according to planning commission's principal adviser Pronab Sen as government is still to address some structural issues because of which average food inflation hovered around 7% between 2004 and 2009. Food inflation languished in the negative zone for the second straight week despite a slight uptick in prices because of the high statistical base of the last year.

The S&P CNX Nifty is currently trading at 4,852.15, up by 20.90 points or 0.43%. The index has touched a high and a low of 4,868.35 and 4,842.65 respectively.  There were 34 stocks advancing against 16 declines on the index.

The top gainers of the Nifty were RPower up by 3.61%, Tata Power up by 3.50%, Tata Motors up by 3.13%, Coal India up by 3.02% and DLF was up by 2.89%.

On the other hand, Bajaj Auto down by 1.25%, Hindalco down by 1.24%, HCL Tech down by 1.10%, Dr Reddy down by 1.03% and Hero MotoCorp down by 0.87% were the top losers on the index.

The Asian markets were trading mixed; Shanghai Composite has plunged by 2.02%, Hang Seng was down by 0.03% and Taiwan Weighted was down by 0.06%.

On the other hand, Jakarta Composite was up by 0.34%, Nikkei 225 surged by 1.19%, Straits Times gained 0.88% and Seoul Composite was up by 0.23%.