Markets trade flat in afternoon session

Indian bourses were trading flat in afternoon session as gains in consumer durables and capital goods stocks were offset by the selling witnessed in oil and gas, metal and banking stocks. Weak Asian cues as well as depreciation in rupee value weighed on the sentiments. Banking stocks were on selling radar as the RBI noted that large asset quality stress remains a concern for banks. Oil and gas stocks were also under pressure amid concerns of falling global crude oil prices. However, losses remain capped as sentiments got some support as Prime Minister Narendra Modi stated that the government will change laws and style of government functioning to create jobs and bring the derailed economy back on track. Further the report that FDI in India during the April-October FY15 grew by 25% to $17.35 billion from $13.82 billion recorded in the corresponding period of the previous fiscal also provided support to the domestic benchmarks. Infrastructure stocks have rallied after the Union Cabinet paved the way for easing the land acquisition Act for public-private-partnership (PPP) and rural infrastructure projects.

Among blue chip stocks, BHEL was top gainer up by around 1.38%, while Reliance Industries was top loser trading down by around 1.57%. Meanwhile, buying continued in the broader markets with both the mid and small cap indices trading up by over 0.35%. In scrip specific movement, shares of Blue Star were up nearly 4% at Rs 321 after the company has agreed to collaborate with Eureka Forbes to launch water coolers with in-built purification. 

On global front, Asian markets were trading in red with Nikkei 225 down 1.21% and Taiwan Weighted down 0.19% as a sharp sell-off in commodities and political uncertainty in Greece made investors less willing to take risks in the final trading days of 2014. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,200 and 27,000 levels respectively. The market breadth on BSE was positive, out of 2,448 stocks traded, 1,262 stocks advanced, while 1,083 stocks declined on the BSE.

The BSE Sensex is currently trading at 27393.75, down by 1.98 points or 0.01% after trading in a range of 27336.33 and 27478.30. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index up by 0.38%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.29%, Capital Goods up by 1.21%, Power up by 0.88%, IT up by 0.56% and INFRA up by 0.47%. On the other hand, Oil & Gas down by 0.96%, Metal down by 0.80%, Bankex down by 0.29%, PSU down by 0.05% and Auto down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.38%, Larsen & Toubro up by 0.99%, Dr. Reddys Lab up by 0.94%, Sun Pharma Inds. up by 0.82% and Hindustan Unilever up by 0.76%. On the flip side, Reliance Industries down by 1.57%, Sesa Sterlite down by 1.46%, Tata Steel down by 1.06%, Bajaj Auto down by 0.81% and ONGC down by 0.78% were the top losers.

Meanwhile, amid reports of improving macro-economic fundamental of the country, the Reserve Bank of India (RBI) has highlighted that falling inflation and political stability have helped check the macroeconomic vulnerabilities.  However, central bank flagged lower revenue mobilisation this fiscal as a major concern and pitched for structural reforms to reinforce investor confidence.

On inflation outlook, the RBI expects that CPI inflation over the next 12 months may hover around 6% if international crude prices remain at the current levels and monsoon next year turns out to be normal. The RBI targets to contain the CPI inflation at 8% by March 2015 and 6% by March 2016. Keeping inflation battle at the top of agenda, the RBI has kept interest rate unchanged at 8% since January 2014 despite industry and government urging it to cut the rate.

The RBI has also raised concerns over the recent increase in FIIs capital inflow in the Indian debt markets, underscoring that this trend can turn volatile in the wake of changes in global markets, especially in the US, the world's largest economy. If the US surprises investors with changes in its monetary policy, there might be certain adverse impact on domestic markets.

Regarding the banking sector, the RBI has noted that asset quality stress still remain for the banks. Apex bank expects that gross non-performing assets (GNPA) ratio has gone up by 0.4 percentage points over the last six months to 4.5% in September and may improve to 4% by March 2016 if there is a sustained economic improvement.

The CNX Nifty is currently trading at 8246.80, up by 0.50 points or 0.01% after trading in a range of 8230.30 and 8268.25. There were 24 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.37%, BHEL up by 1.36%,  Larsen & Toubro up by 0.99%, Dr. Reddys Lab up by 0.93% and Sun Pharma Inds. up by 0.84%. On the flip side, Reliance Industries down by 1.56%, Sesa Sterlite down by 1.44%, Cairn India down by 1.34%, Tata Steel down by 1.06% and PNB down by 0.96% were the top losers.

Asian markets were trading in red, Jakarta Composite up by 7.61 points or 0.15% to 5,185.98. While, Hang Seng down 231.89 points or 0.98% to 23,541.29, Nikkei 225 down 213.78 points or 1.21% to 17,516.06, Taiwan Weighted down 17.85 points or 0.19% to 9,268.43, KOSPI Index down 12.27 points or 0.64% to 1,915.59, Shanghai Composite down 7.37 points or 0.23% to 3,160.65, Straits Times down 4.67 points or 0.14% to 3,363.02 and FTSE Bursa Malaysia KLCI down 1.38 points or 0.08% to 1,767.03