Benchmarks keep their head above water in early deals

Indian equity benchmarks have made a cautious start but managed to keep their head above water in early deals on Tuesday. Investors remained cautious ahead of key events including Economic Survey, Railway Budget and Union Budget along with the expiry of February series later during the week. Some support came in with President Pranab Mukherjee’s statement while addressing the joint session of parliament that the latest estimates of India’s gross domestic product (GDP) growth making it the fastest growing large economy in the world, is Narendra Modi-led government’s most significant achievement till date.

On the global front, the US markets made a mixed closing in last session after a lackluster session of trade. Investors preferred to stay on the sidelines ahead of Federal Reserve Chair Janet Yellen's testimony before the House and Senate, while there was some cautiousness with National Association of Realtors releasing a report showing a bigger than expected drop in existing home sales. The Asian markets were trading mostly in the green, while the Chinese markets remained shut for the New Year holiday, the Japanese market was modestly in green.

Back home, on the sectoral front, realty, fast moving consumer goods and software witnessed the maximum gain in trade, while banking, auto and metal remained the top losers on the BSE sectoral space. The broader indices too were trading cautiously, while the market breadth on the BSE was negative; there were 934 shares on the gaining side against 961 shares on the losing side while 83 shares remain unchanged.

The BSE Sensex is currently trading at 28993.15, up by 18.04 points or 0.06% after trading in a range of 28959.39 and 29054.82. There were 18 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.01%, while Small cap index down by 0.25%.

The gaining sectoral indices on the BSE were Realty up by 1.25%, FMCG up by 0.79%, IT up by 0.66%, Consumer Durables up by 0.51% and Capital Goods up by 0.49% while, Bankex down by 0.53%, Auto down by 0.41%, Metal down by 0.36%, Oil & Gas down by 0.30% and PSU down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.23%, ITC up by 1.09%, Larsen & Toubro up by 0.83%, Cipla up by 0.78% and Infosys up by 0.76%. On the flip side, Sesa Sterlite down by 1.62%, Tata Motors down by 1.35%, Bharti Airtel down by 1.25%, SBI down by 1.06% and Axis Bank down by 0.77% 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 8756.55, up by 1.60 points or 0.02% after trading in a range of 8744.50 and 8775.95. There were 27 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.61%, BPCL up by 1.20%, Wipro up by 1.15%, ITC up by 1.04% and Infosys up by 1.02%. On the flip side, Bank of Baroda down by 2.52%, Jindal Steel & Power down by 2.46%, Sesa Sterlite down by 2.05%, Tata Motors down by 1.74% and Bharti Airtel down by 1.73% were the top losers.

Most of the Asian equity indices were trading in the green; Straits Times rose 2.76 points or 0.08% to 3,424.06, FTSE Bursa Malaysia KLCI increased 4.78 points or 0.26% to 1,814.17, KOSPI Index jumped 9.82 points or 0.5% to 1,978.21, Jakarta Composite advanced 13.55 points or 0.25% to 5,416.82, Nikkei 225 added 88.56 points or 0.48% to 18,555.48 and Taiwan Weighted was up by 92.79 points or 0.97% to 9,622.30. On the flip side, Hang Seng was down by 142.73 points or 0.57% to 24,694.03.