Benchmarks manage to keep head above water in early deals

Indian equity benchmarks have made a cautious start on Wednesday as investors remained on sidelines ahead of December WPI data, which is scheduled to be released later in the day. Wholesale price inflation, which was flat in November, is expected to have picked up to 0.6 percent last month. Indices managed to keep their head above water as some support came in from report that foreign institutional investors were net buyers in Indian equities worth Rs 235 crore on January 13, 2015, as per provisional stock exchange data. Gains remained capped as traders remained concerned as the World Bank lowered its global growth forecast for 2015 and next year due to disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices. The global development lender predicted the global economy would grow 3 per cent this year, below a forecast of 3.4 per cent made in June.

On the global front, the US markets ended modestly lower in last session due to decreases in prices for crude oil and other commodities such as copper. The worries overshadowed the optimism about earnings that were seen earlier in the day after aluminum giant Alcoa (AA) kicked off the reporting season on an upbeat note. The Asian markets were trading slightly in the red at this point of time as the yen gained a fourth day against the dollar and commodity prices slumped.

On the sectoral front, auto, capital goods and power witnessed the maximum gain in trade, while metal, fast moving consumer goods and oil and gas remained the top losers on the BSE sectoral space. The broader indices however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1204 shares on the gaining side against 682 shares on the losing side while 73 shares remain unchanged.

The BSE Sensex is currently trading at 27441.48, up by 15.75 points or 0.06% after trading in a range of 27351.27 and 27512.80. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.41%, while Small cap index up by 0.46%.

The gaining sectoral indices on the BSE were Auto up by 0.80%, Capital Goods up by 0.61%, Power up by 0.57%, Realty up by 0.53% and Consumer Durables up by 0.53% while, Metal down by 1.44%, FMCG down by 0.25%, Oil & Gas down by 0.13%, Bankex down by 0.05% and Healthcare down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.57%, BHEL up by 2.02%, Bajaj Auto up by 1.15%, Tata Motors up by 0.97% and Mahindra & Mahindra up by 0.82%. On the flip side, Sesa Sterlite down by 2.86%, Hindalco down by 2.77%, Tata Steel down by 2.02%, ITC down by 1.98% and GAIL India down by 0.67% were the top losers.

Meanwhile, in order to boost domestic economic growth, Finance Minister Arun Jailtley stated that the Government intended to invest more funds on improving infrastructure and would encourage investments in the manufacturing sector that could spur growth and generate employment. The government would stick to a non-adversarial tax regime as it tries to attract investors who were scared away by provisions of retrospective taxation, the Minister added.

On the issue of declining investments in highways sector, Finance Minister stressed that an extraordinary step was taken to fund the highways sector by hiking the excise duty on petrol and diesel by Rs 2 per litre. The government is taking steps to clear the mess in coal and power sector. Highlighting the need to attract more private investments, Jaitley said that the government is trying to consolidate investor sentiments after taking a slew of measure over the last seven months. FDI in construction has been liberalised, 100% foreign investment has been allowed in railways and defence and insurance sectors have been opened for FDI up to 49%.

Indian economic growth had slowed down to below 5% over the last two financial years amid concerns like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects. However, the domestic economy has shown signs recovery and expanded at 5.5% during first half of this fiscal as compared to 4.9% in the corresponding period of previous fiscal.

The CNX Nifty is currently trading at 8303.15, up by 3.75 points or 0.05% after trading in a range of 8283.25 and 8326.45. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.75%, Ultratech Cement up by 2.41%, BHEL up by 2.14%, ACC up by 1.49% and Bajaj Auto up by 1.30%. On the flip side, Sesa Sterlite down by 3.10%, Hindalco down by 2.93%, Tata Steel down by 2.03%, ITC down by 1.99% and HCL Tech down by 1.81% were the top losers.

Most of the Asian equity benchmarks were trading in red; Nikkei 225 declined 188.44 points or 1.1% to 16,899.27, Taiwan Weighted decreased 46.73 points or 0.51% to 9,185.07, FTSE Bursa Malaysia KLCI shed 6.16 points or 0.35% to 1,742.74, Jakarta Composite slipped 4.33 points or 0.08% to 5,210.03 and Straits Times was down by 3.03 points or 0.09% to 3,338.04.

On the flip side, KOSPI Index rose 0.32 points or 0.02% to 1,917.46, Shanghai Composite increased 12.05 points or 0.37% to 3,247.35 and Hang Seng was up by 55.13 points or 0.23% to 24,271.10.