Benchmarks trade cautiously in early deals

Indian equity benchmarks have made a cautious start and are trading flat near their neutral lines as sentiments remained dampened on reports that foreign portfolio investors sold shares worth a net Rs 27.43 crore on February 5, 2015, as per provisional data. However, losses remained limited as some support came in with an HSBC report that India's manufacturing and services sectors expanded at a faster pace than China in January. Among the four largest emerging economies, HSBC said that only India bucked the trend and recorded one of the fastest growth in January.

On the global front, the US markets bounced with a bang as energy shares recovered with oil prices, while news Pfizer would buy Hospira in a massive deal further boosted the market. The Asian markets were trading mixed at this point of time with the Japanese market taking the lead tracking the overnight gains on Wall Street.

Back home, on the sectoral front, software, technology and fast moving consumer goods witnessed the maximum gain in trade, while auto, banking and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices were reeling under pressure, while the market breadth on the BSE was negative; there were 833 shares on the gaining side against 1103 shares on the losing side while 66 shares remain unchanged.

The BSE Sensex is currently trading at 28856.85, up by 5.88 points or 0.02% after trading in a range of 28791.71 and 28922.85. There were 11 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.30%, while Small cap index down by 0.50%.

The gaining sectoral indices on the BSE were IT up by 1.44%, TECK up by 1.27%, FMCG up by 0.84%, Consumer Durables up by 0.33% and Oil & Gas up by 0.10% while, Auto down by 2.27%, Bankex down by 0.88%, PSU down by 0.56%, Metal down by 0.56% and Power down by 0.19% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.14%, Wipro up by 2.12%, Sesa Sterlite up by 2.05%, HDFC up by 2.03% and Infosys up by 1.80%. On the flip side, Tata Motors down by 5.38%, GAIL India down by 2.41%, Mahindra & Mahindra down by 2.40%, Hero MotoCorp down by 1.94% and Tata Steel down by 1.52% were the top losers.

Meanwhile, striking a hawkish tone, Reserve Bank of India’s governor, Raghuram Rajan underscored that India’s central bank still long way to go in fighting inflation and that the bank had a credibility to control inflation if it picks up.

The governor further appeared shaky on the aspect of winning over inflation and highlighted that the country in true sense would win the war over reining inflation, if it could survive upon the supply shock in the future, if they wouldn’t increase inflation expectation.

Rajan`s words of caution come a few days after the RBI held interest rates steady in its latest policy review after a surprise rate cut in mid-January. Further, the governor also stressed on the need for the country to accelerate growth, citing that India should not settle for 'anything less than double-digit growth' in the medium term.

Lastly, he emphasized that India was importing 'disinflationary conditions' from the rest of the world, helping contain domestic inflation, but he warned that countries were required to be mindful of 'an exchange rate that was too strong and not competitive.

The CNX Nifty is currently trading at 8702.60, down by 9.10 points or 0.10% after trading in a range of 8689.80 and 8726.20. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 2.55%, Cipla up by 2.05%, HDFC up by 2.04%, Sesa Sterlite up by 2.02% and Wipro up by 2.02%. On the flip side, Tata Motors down by 5.47%, Bank Of Baroda down by 2.99%, Jindal Steel & Power down by 2.73%, Mahindra & Mahindra down by 2.51% and GAIL India down by 2.51% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 7.98 points or 0.44% to 1,811.19, Straits Times rose 30.82 points or 0.9% to 3,437.40, Jakarta Composite surged 35.83 points or 0.68% to 5,315.73 and Nikkei 225 was up by 128.84 points or 0.74% to 17,633.46.

On the flip side, Hang Seng dipped 68.96 points or 0.28% to 24,696.53, Taiwan Weighted decreased 51.77 points or 0.54% to 9,460.28, Shanghai Composite shed 35.65 points or 1.14% to 3,100.88 and KOSPI Index was down by 1.28 points or 0.07% to 1,951.56.