Benchmarks turn choppy in early trade on profit booking

The Indian equity markets have made flat start but, turned choppy as investors booked profits after previous sessions’ rally with HDFC, ICICI Bank and Infosys leading the losses. Global cues remained mixed as the US markets though ended mixed on the last trading day of January but managed to mark best January in 15 years while, most of the Asian equity indices were trading in the positive terrain at this point of time. Back home, profit booking in most of the key heavyweights dragged the NSE’s Nifty lower. Moreover, telecom stocks are reeling under pressure as the Telecom ministry issued show-cause notices to five private operators including, Bharti Airtel, Vodafone and RCom, for under reporting revenues, as per a special audit report, for assessment years 2006 to 2008. Stocks of Bharti Airtel, IDEA Cellular and MTNL edged lower in the trade. However, auto stocks like Hero MotoCorp, Bajaj Auto and Maruti led the gains ahead of reporting monthly sales number today. On the negative side, realty, consumer durables and banking saw profit booking. At the same time, broader indices were trading with some traction while, the market breadth has made a positive start; there were 872 shares on the gaining side against 666 shares on the losing side while 51 shares remained unchanged.

The BSE Sensex opened at 17,179.64; about 13 points lower compared to its previous closing of 17,193.55, and has touched a high and a low of 17,210.16 and 17,098.41 respectively.

The index is currently trading at 17,117.73, down by 75.82 points or 0.44%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has made a positive start with 54.88% stocks advancing against 41.91% declines. Moreover, the broader indices were trading with some traction; the BSE Mid cap and Small cap indices was up by 0.07% and 0.39% respectively.  

The only gaining sectoral indices on the BSE were, Auto up by 1.15%, Metal up by 0.51% and Oil and Gas up by 0.29%. While, Realty down by 1.18%, CD down by 1.09%, Bankex down by 1.05%, CG down by 1.02% and IT down by 0.82% were the top losers on the index.

The top gainers on the Sensex were Jindal Steel up by 2.39%, M&M up by 1.95%, Tata Steel up by 1.49%, Hero MotoCorp up by 1.45% and Tata Power up by 1.35%.

On the flip side, HDFC down by 2.13%, ICICI Bank down by 1.53%, DLF down by 1.46%, Infosys down by 1.18% and HDFC Bank down by 1.10% were the top losers on the index.

Meanwhile, with slowing industrial growth and uncertain global economy, India’s GDP growth is likely to decline 7-7.2% in 2010-11, from the earlier estimate of 8.2%, the Prime Minister’s Economic Advisory Council (PMEAC) chairman, C Rangarajan said. He attributed the sluggish growth to slackening of industrial output and the general slowdown in global environment. Rangarajan’s estimates are in line with the government’s estimates of 7-7.5% growth but slightly greater than the World Bank’s projection of 6.8% and UN’s projection of 7.1% growth for the FY12 fiscal.

However, expressed hope that the GDP growth may be better in 2012-13 due to likely decline in inflation, improvement in infrastructure and greater clarity on issues like land acquisition and environment. He further said the broad macro-economic parameters relating to savings and investments were conducive to achieving a growth rate of 8-9% in a sustained manner.

By adding further he said that the government will find it difficult to stick to its fiscal deficit target of 4.6% of GDP this fiscal, but it will make an attempt to stay close to this number to gain credibility. He advised the government to draw up an appropriate roadmap to reach the FRBM (Fiscal Responsibility and Budget Management) target of 3% of GDP. Expressing concern over the country’s rising inflation, Rangarajan said that India needed to control its inflation if it wanted sustained high growth. 

Rangarajan was of the opinion that India should use all of its policy instruments to bring down the current inflation and re-anchor inflationary expectations to the 5% comfort zone. He expected headline inflation to come down to below 7% by March 2012, given its easing in December 2011. Rangarajan further said that ‘we however have to bear in mind that the rationalization process in the pricing of petroleum products is still to be completed and, as and when this happens, it will impact overall inflation.’

The S&P CNX Nifty opened at 5,198.15; flat compared to its previous closing of 5,199.25, and has touched a high and a low of 5,198.35 and 5,167.80 respectively.

The index is currently trading at 5,176.90, down by 22.35 points or 0.43%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Jindal Steel up by 2.29%, M&M up by 1.71%, SAIL up by 1.62%, Tata Steel up by 1.53% and Hero MotoCorp up by 1.50%.

Sesa Goa down by 2.48%, HDFC down by 1.96%, Siemens down by 1.96%, JP Associates down by 1.72% and Axis Bank down by 1.45%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng was up 4.63 points or 0.02% to 20,395.12, Jakarta Composite was up 6.80 points or 0.17% to 3,948.50, Nikkei 225 was up 13.25 points or 0.15% to 8,815.76, Seoul Composite was up 5.90 points or 0.30% to 1,961.69 and Taiwan Weighted was up by 35.72 points or 0.48% to 7,552.80.

On the flipside, Shanghai Composite was down 9.72 points or 0.42% to 2,282.89 and Straits Times was down by 10.38 points or 0.36% to 2,896.31.