India equities continue firm trade in the late afternoon session

Indian equity markets further continued to strengthen in the late afternoon session as sentiment got a boost after data showed food inflation hovered in the negative terrain for fourth straight week. The weekly food inflation ending January 14, 2012 moderated to -1.03% from its previous levels of -0.42% for the week ended January 7. The decline in inflation can largely be attributed to drop in the price of vegetables, especially onions and potatoes and wheat. Traders were seen piling up the positions in Oil & Gas, Consumer Durables and TECk sector while selling was witnessed in Realty, FMCG and Bankex sector. Industry heavyweight RIL was trading with a gain of around more than three and half percent pulling the markets higher. Also, Cairn India, GAIL and ONGC from Oil & Gas sector were trading in green giving the much needed support. SAIL, Sesa Goa, Sterlite, Tata Steel and Hindalco from Metal pack were trading in green pushing the markets higher. DLF from Realty counter was trading with cut of around more than two and half percent putting pressure on the markets. PNB, HDFC Bank, SBI and Kotak Bank from Banking space was trading weak exerting pressure on the markets. Meanwhile all sugar stocks including Bajaj Hindustan, Shree Renuka and Balrampur Chini rallied sharply on reports that Prime Minister Manmohan Singh has formed expert committee to examine issues concerning the sugar industry and also the deregulation of the sector.

On the global front, the Asian markets traded on a mix note while the European markets were trading on a pessimistic note. Investors are cautious as they are eyeing negotiations between private bondholders and the Greece’s government over the nation’s debt trouble. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,150 and 17,150 levels respectively. The market breadth on BSE was in favor of advances in the ratio of 1651:1099 while 93 scrips remained unchanged.

The BSE Sensex is currently trading at 17,153.99 up by 76.81 points or 0.45% after trading as high as 17,258.97 and as low as 17,106.57. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index rose 0.43% while the Small cap soared 0.97%.

On the BSE sectoral space, Oil & Gas up 2.55%, Consumer Durables up 2.06%, TECk up 1.83%, Metal up 1.72% and IT up 1.64% were the major gainers while Realty down 2.01%, FMCG down 1.24%, Bankex down 0.86% and Power down 0.33% were the only losers in the space.

Tata Motors up 4.08%, Bharti Airtel up 3.59%, RIL up 3.58%, Sterlite up 3.47% and Tata Steel up 2.94% were the major gainers on the Sensex, while Bajaj Auto down 3.77%, DLF down 2.99%, Hero MotoCorp down 2.86%, BHEL down 2.66% and Jindal Steel down 2.25% were the major losers in the index.

Meanwhile, Asian Development Bank (ADB) is of the view that Asian region will be power to world economy in 2012. Haruhiko Kuroda, head of ADB has said that Asian economies - excluding Japan, Australia and New Zealand - are likely to grow by around 7 % this year. Though the growth figures are down from 7.5 % in 2011 and 9% 2010 due to the global economic slowdown but the regional and domestic demand in Asia is still 'fairly robust'.

ADB chief further said that Asia had already been affected by the ongoing European financial crisis. Nonetheless, Asian economies had good internal and regional demand which would keep their economies moving. Kuroda predicted that China would continue to grow by more than 8%, followed by India at between 7-8 % and Indonesia at around 6.5%.

He further stated, that the Asian Development Bank or ADB has 48 members and while most developing countries have a strong financial sector and reasonably good public sector, some have serious fiscal deficits like Pakistan, where huge floods have devastated the economy. It has experienced double-digit inflation in the last two years and growth of only about 3%.

The S&P CNX Nifty is currently trading at 5,189.95, higher by 31.65 points or 0.61% after trading as high as 5,217.00 and as low as 5,162.40. There were 30 stocks advancing against 20 declines on the index.

The top gainers on the Nifty were SAIL up 8.03%, Sesa Goa up 6.23%, Sterlite up 4.97%, Bharti Airtel up 3.91% and RIL up 3.89%.

Ranbaxy down 5.89%, Bajaj Auto down 3.41%, BHEL down 3.01%, Hero MotoCorp down 2.90% and DLF down 2.74% were the major losers on the index.

In the Asian space, Hang Seng rose 0.31%, Seoul Composite advanced 0.39% and Strait Times inched higher 0.26%. On the flipside only Jakarta Composite eased 0.23% and Nikkei 225 slipped 0.09%.

Stock markets in China and Taiwan remained closed in observance of Lunar New Year holiday.

The European markets were trading in red with, France’s CAC 40 descended 0.48%, Germany’s DAX shed 0.12% and Britain’s FTSE 100 dropped 0.43%.