Nifty slips in red; Sensex showcase resilience

Frontline equity indices after getting a flat to positive start have pared off most of its gains and are currently gyrating near their neutral line. However, the 50 share widely followed index of National Stock Exchange (NSE)-Nifty-after getting a positive start has slipped into negative terrain. The dawdling start of the bourses is on the back of the negative close of Wall Street on Friday. The S&P 500 posted its biggest daily percentage decline thus far in 2012 on  Friday after an about-face on Greece's long-awaited debt deal ended a five-week streak of gains for equities. Meanwhile, most of the Asian shares have eked out modest gains Monday as Greece's parliament passed a crucial vote needed to avoid a debt default. The Greek parliament approved on Monday the deeply unpopular austerity bill, while serious violence broke out on the streets of Athens and spread across the country, highlighting the tough challenge the government faces to pursue with the reforms. However, even, the US future indices are showing an uptick in the screen trade.

Back home, stocks from Consumer Durable, Oil & Gas  and Auto counters are the one’s that are striving hard to sustain the positive momentum of Sensex which is currently trading above its 17750 level, however, stocks from Realty, Capital Goods and Power counters are negating the sentiment. 5350 level is currently proving to be tough support level for widely followed index-Nifty. However, the broader indices are up with modest gains. The overall market breadth on BSE is in still in the favour of advances which have outpaced declines in the ratio of 1265: 1177, whil 96 shares remain unchanged.

The BSE Sensex is currently trading at 17,752.15, up by 3.46 points or 0.02%. The index has touched a high and a low of 17,807.61 and 17,692.47 respectively. There were 13 stocks advancing against 17 declines on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.17% and 0.26% respectively.

The top gaining sectoral indices on the BSE were CD up by 1.64%, Oil and Gas and Auto were up by 0.71%, Health Care up by 0.60% and FMCG up by 0.09%. While, Realty down by 1.13%, CG down by 1.06%, Power down by 0.52%, TECk down by 0.42% and Information Technology down by 0.33% were the top losers on the index.

The top gainers on the Sensex were Hero MotoCorp up by 2.27%, Sun Pharma up by 2.24%, Coal India up by 1.76%, Gail India up by 1.76% and M&M up by 1.48%.

On the flip side, Tata Power down by 3.20%,  DLF down by 2.56%, SBI down by 2.23%, Cipla down by 2.01% and  L&T down by 1.73% were the top losers on the Sensex.

Meanwhile, Indian economy could grow at 7.4% in FY’13 instead of the estimated 6.9% (CSO estimates), according to a report by Nomura. The banking major has predicted that easing of interest rates by the Reserve Bank of India (RBI) on the back of falling inflation, could provide an impetus to economic activity and push growth figures up.

Nomura, in its recently released report ‘Asia Economic Alert’ has stated that due to some relief in the commodity prices, the RBI may go for a rate cut of 100 basis in the next fiscal. The rate cut is likely to be limited as structural inflation in the economy is still high and so is the fiscal deficit. Added to this is the uncertainty in the government’s policies.

It further stated that a combination of tight monetary conditions, high inflation and a policy logjam has hurt investment activity and severely dampened industrial sector output growth to its lowest level in the decade. Earlier this month, the Advanced Estimates released by the Central Statistical Organisation (CSO) said that growth in 2011-12 would slip to 6.9%, the lowest in three years, due to slowdown in manufacturing and agriculture.

In its efforts to tame inflation which was near double-digit during most of last two years, the RBI hiked key policy rates 13 times, totaling 350 basis points, between March 2010 and October 2011. The Indian industry blamed this hike for the slowing down of industrial activity. On the front of the government, various economic legislations including bills to reform insurance sector and those on taxation matters have been stuck in Parliament due to lack of consensus between the ruling and opposition parties. However, inflation fell to a two-year low of 7.47% in December 2011 and RBI has hinted that it may go in for rate cuts if inflation remains at moderate levels for some time. 

The S&P CNX Nifty is currently trading at 5,376.15, lower by 5.45 points or 0.10%. The index has touched a high and a low of 5,392.95 and 5,359.45 respectively.  There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Hero MotoCorp up by 2.48%, Reliance Infra up by 2.15%, Coal India up by 1.97%, PowerGrid Corporation up by 1.97% and Sunpharma up by 1.84%.On the flip side, Tata Power down by 3.07%, DLF down by 2.64%, SBI down by 2.14%, Cipla down by 2.13% and Wipro down by 2.08% were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite gained 0.28%, Hang Seng surged 0.69%, Jakarta Composite added up by 0.52%, Nikkei 225 spurted 0.65%, Straits Times rose 0.25%, Seoul Composite accumulated 0.67% and Taiwan Weighted was up by 0.64%.