Benchmarks trim gains; trade hovers near neutral line

Indian equity markets trimmed gains and started trading near neutral line in the late afternoon session on account of selling in frontline blue chip counters. Investors have started eyeing Union Budget which is scheduled on Saturday to get further direction of the market. The Budget session kicked off today with President’s address to both the houses of Parliament. Traders were seen piling positions in Capital Goods, Power and IT stocks, while selling was witnessed in Consumer Durables, Oil & Gas and FMCG sector stocks.  In scrip specific development, Hindalco Industries was trading in green after the company bagged the maximum number of mines in the first phase of auction. The company won three mines -- two in Chhattisgarh and one in Jharkhand. Kalpataru Power Transmission was trading in green after the company’s subsidiary, Shree Shubham Logistics has filed a draft red herring prospectus with SEBI in connection with its proposed initial public offering.

On the global front, the Asian markets were trading mostly in green while the European markets were trading mostly on optimistic note.  Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,850 and 29,300 levels respectively. The market breadth on BSE was negative in the ratio of 1327:1391 while 131 scrips remained unchanged.

The BSE Sensex is currently trading at 29233.75, up by 2.34 points or 0.01% after trading in a range of 29200.22 and 29362.96. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index up by 0.31%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.78%, Power up by 0.65%, IT up by 0.38%, TECK up by 0.26%, Metal up by 0.25% while, Consumer Durables down by 1.37%, Oil & Gas down by 0.83%, FMCG down by 0.22%, Bankex down by 0.09%, PSU down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 2.64%, Mahindra & Mahindra up by 1.91%, TCS up by 1.39%, Larsen & Toubro up by 1.30% and Tata Power up by 0.81%. On the flip side, Reliance Industries down by 1.35%, GAIL India down by 1.17%, Axis Bank down by 0.95%, Bajaj Auto down by 0.92% and HDFC down by 0.88% were the top losers.

Meanwhile, with country’s different regulators investigating companies over a variety of alleged mis-demeanours, Reserve Bank of India (RBI)’s Governor Raghuram Rajan urged for the need of country to find balance between giving government and regulators unchecked power and creating complete paralysis. He suggested that though the country should strengthen its government and regulatory capabilities but it must also resist bringing in 'layers and layers of checks and balances' since this could hinder the state's normal functions. He emphasized that the country should not escape from “License Permit Raj” only to end up in the “Appellate Raj.”

These comments came after some investors raised concerns over government’s excessive zeal. Citing Hitler’s example, Reserve Bank of India (RBI) Governor Raghuram Rajan cautioned that a strong government may not always move in the right direction. He further underscored that Hitler’s so called strong government only took Germany efficiently and determinedly on a path to ruin, overriding the rule of law and dispensing with elections.

He called for economic inclusion and added this should mean easy access to quality education, nutrition, healthcare, finance and markets to all citizens for ensuring sustainable growth. He also suggested that there was greater need of specialist with domain knowledge and experience in many areas of government and regulation.

The Central Bureau of Investigation (CBI) sparked indignation after publicly announcing a probe into industrialist Kumar Mangalam Birla in December 2013 in relation to a coal block allocated to a firm belonging to his Aditya Birla Group and later dropping the case in August citing a lack of evidence.

The CNX Nifty is currently trading at 8822.85, down by 10.75 points or 0.12% after trading in a range of 8812.90 and 8869.00. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 3.01%, Power Grid up by 1.96%, Mahindra & Mahindra up by 1.75%, TCS up by 1.39% and Larsen & Toubro up by 1.36%. On the flip side, Lupin down by 3.41%, Zee Entertainment down by 3.18%, DLF down by 2.21%, Jindal Steel & Power down by 1.98% and NMDC down by 1.65% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 4.26 points or 0.24% to 1,812.13, Hang Seng increased 4.68 points or 0.02% to 24,836.76, KOSPI Index increased 6.94 points or 0.35% to 1,968.39 and Nikkei 225 increased 134.62 points or 0.73% to 18,466.92.

On the other hand, Straits Times decreased 7.52 points or 0.22% to 3,428.14 and Jakarta Composite decreased 4.11 points or 0.08% to 5,395.99. The markets in China and Taiwan remain closed for the Lunar New Year holiday.

The European markets were trading mostly in green; France’s CAC increased 26.05 points or 0.54% to 4,856.95, Germany’s DAX increased 73.71 points or 0.67% to 11,124.35 while, UK’s FTSE 100 decreased 3.13 points or 0.05% to 6,912.07.