Benchmark indices creep higher; broader indices outperform

50 share index- Nifty after cooling off from its day’s high, is slowly clinching back towards its crucial psychological level of 5400 mark, which is also its six month high level. Similarly frantic buying by some retail and institutional investors has prompted some additional traction in the 30 share volatile index-Sensex. Although the benchmark indices have gained additional traction, but the gains are not colossal as the release of the government's official prediction for economic growth in the current year is keeping select group of investor’s finicky. Various estimates from economists and policymakers have pegged India's gross domestic product (GDP) growth at between 7 and 7.5 percent in the fiscal year that ends in March, a sharp fall from 8.4 percent seen in the previous year. On the global font, Asian stock markets were mixed on Tuesday, with many investors cautious amid prolonged uncertainty over Greece's debt situation, while the Reserve Bank of Australia's surprise decision to keep interest rates on hold dented the Sydney market and sent the Australian dollar to six-month highs. Meanwhile, US future indices were showing a downtick in the screen trade.

Back home on the BSE sectoral front, stocks from Oil & Gas, Consumer Durable and Bankex counters hogged maximum limelight, however, stocks from Realty, Power and Capital Goods remained a drag on 30 share index. However, broader indices too were making merry as midcap index was up up by 0.23% and small cap with significant gains of over 0.40%. The overall market breadth on BSE was in the favour of advances which outpaced declines in the ratio of 1236:1206, while 114 shares remained unchanged.

The BSE Sensex is currently trading at 17,746.76, up by 39.45 points or 0.22%. The index has touched a high and a low of 17,828.71 and 17,700.21 respectively. There were 21 stocks advancing against 9 declining one’s on the index.

The broader indices too enticed additional traction, which was just in line with benchmark indices ; the BSE Mid cap and Small cap indices rose 0.23% and 0.44% respectively.

The top gaining sectoral indices on the BSE were Oil and Gas up by 1.24%, CD up by 1.15%, Bankex up by 0.52%, HC up by 0.48% and  Metal up by 0.45%. While, Realty down by 0.45%, power down by0.35%, CG down by 0.20%, TECk down by 0.19% were the top losers on the 30 share index.

The top gainers on the Sensex were RIL up by 1.96%, Hero MotoCorp up by 1.46%, Cipla up by 1.21%, Hindalco Industries up by 1% and Jindal Steel up by 0.96%.

On the flip side, HUL down by 1.82%, Bharti Airtel was down by 1.76%, Gail India down by 1.27%, Sun Pharmaceuticals down by 0.88% and M&M down by 0.85% were the top losers on the Sensex.

Meanwhile, Standard and Poor’s (S&P), in its report titled 'Several Factors Could Weigh On India's Current Stable Sovereign Rating In 2012', has said that certain challenges faced by the Indian economy are  shifting India’s stable sovereign credit ratings towards negative. As per the report, high inflation, a weak government fiscal position, and slower economic growth have hurt investor confidence in the rupee, triggered a capital outflow, and weighed on the stable sovereign outlook on India in 2012. The European sovereign debt problems and the uncertain global financial environment could further put pressure on India.

According to Standard & Poor's credit analyst, India’s current unsolicited rating BBB-/Stable/A-3, has been challenged due to the political gridlock faced by the Indian government and the government's ability to implement measures to improve economic growth and fiscal prudence will be vital to boosting confidence in the Indian economy. Further, S&Ps stable outlook on the 'BBB-' long-term rating on India currently reflects their expectation of strong economic growth in the medium term and gradually improving fiscal performances. Inflation and political uncertainty, which could lead to higher government subsidies and stalled reform efforts, had been factored in.

S&P has further said that it does not expect to downgrade or revise the outlook on the long-term rating in the near future. However, the negative factors, combined with the government's weak policy formulation and implementation could threaten it.

The S&P CNX Nifty is currently trading at 5,373.20, higher by 11.55 points or 0.22%. The index has touched a high and a low of 5,413.35 and 5,356.35 respectively. There were 29 stocks advancing against 19 declining one’s, while 2 stocks remained unchanged on the index.

The top gainers of the Nifty were Cairn up by 3.75%, Reliance up by 1.90%, BPCL up by 1.53%, Hero MotoCorp up by 1.50% and Ranbaxy up by 1.48%.

Bharti Airtel down by 2.09%, HUL down by 1.99%, ACC down by 1.62%, JP Associates down by 1.35% and Gail India down by 1.31% were the major losers on the index.

Asian equity indices were trading flat; Shanghai Composite was down by 1.94%, Hang Seng down by 0.16%,, Jakarta Composite was down by 0.96% and Nikkei 225 was down by 0.37%.

On the flip side, Straits Times was up by 0.19%, Seoul Composite was up by 0.21% and Taiwan Weighted was up by 0.22%.