Benchmarks trade flat after a soft start

The Indian equity markets have made a soft start as investors remained on the safer side as today is the expiry of February F&O series. Moreover, global cues remained subdued as the US markets closed lower overnight while, most of the Asian equity indices were trading in the red at this point of time. Back home, markets have made a smart recovery and turned positive on the back of some short covering with Nifty recapturing its crucial 5,500 level after dipping below the psychological mark in the early trade. On the sectoral front consumer durables witnessed the maximum gain in trade followed by fast moving consumer goods and banking while, metal, realty and technology remained the top losers on the BSE sectoral space. Meanwhile, Aviation stocks like, Spicejet and Jet Air India are edged higher after the government formally allowed local carriers to import jet fuel directly in a major policy move expected to bring down costs for the debt-laden carriers. The broader indices were reeling under pressure while, the market breadth on the BSE was negative; there were 609 shares on the gaining side against 971 shares on the losing side while 51 shares remained unchanged.

The BSE Sensex opened at 18,127.35; about 18 points lower compared to its previous closing of 18,145.25, and has touched a high and a low of 18,209.56 and 18,096.54 respectively.

The index is currently trading at 18,157.61, up by 12.36 points or 0.07%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a negative start with 37.34% stocks advancing against 59.53% declines. The broader indices were bleeding in the trade; the BSE Mid cap and Small cap indices declined 0.32% and 0.51% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.05%, FMCG up by 0.67%, Bankex up by 0.40%, Oil and Gas up by 0.35% and HC up by 0.30%. While, Metal down by 0.98%, Realty down by 0.73%, TECk down by 0.26%, Auto down by 0.17% and Power down by 0.11% were the top losers on the index.

The top gainers on the Sensex were SBI up by 2.05%, Tata Motors up by 1.33%, BHEL up by 1.09%, HUL up by 1.08% and Cipla up by 0.94%.

On the flip side, Sterlite Industries was down by 3.59%, Bharti Airtel was down by 1.48%, Jindal Steel was down by 1.26%, Maruti Suzuki was down by 1.17% and Coal India was down by 1.01% were the top losers on the Sensex.

Meanwhile, the Finance Minister, Pranab Mukherjee has reaffirmed his government’s commitment to bring in 51% FDI in multi brand retail and has stated that a timeline for the same could be expected in the upcoming budget on March 16. The Minister has further said that his government is committed to the process of reforms is keen to see India on the path of double digit growth. 

India’s GDP growth is expected to come down to 6.9% in this fiscal from its earlier trajectory of 8-9%. As per the FM, the central bank’s anti-inflationary stance has hurt the country’s economic growth. However FM is confident that the slowdown is temporary and India will be back on the path of high growth soon. Mukherjee has stressed that for sustainable growth can be achieved only when it is broad based and is spread across sectors.

FM has also emphasized on improving factor productivity through technological innovations and process reengineering, and has said that the country needs to focus on three key areas - education and knowledge creation, creation and strengthening of a competitive environment to support private enterprise, and a greater focus on research and design in enterprises and institutions of higher learning.

Further, the FM said, government had now put in place the New Manufacturing Policy to give a big push to the manufacturing sector with the objective of increasing its share in the GDP to 25% and create 100 million jobs in the next ten years.

Reiterating his government’s commitment to reforms, Mukherjee has stated that India cannot afford to keep its doors shut at a time when it needs foreign investment the most. FM has further stressed that opening up multi-brand retail to foreign investments is very much on the UPA Government's agenda and a consensus to implement the decision is being worked out.

FDI in multi brand retail will enable entry of large retail chains in India and is expected to benefit consumers by helping address inflation concerns through price reductions due to lesser margins effected by retail giants like Walmart. It is also expected to cut agri-waste by improving the supply chain, bringing in distribution efficiencies, coupled with capacity building and induction of modern technology, also farmers will get a better price for their produce as they will be able to sell their produce directly to retailers, thereby reducing margins for middlemen. Investments in cold-storage and warehousing will ease supply-side pressures thereby easing inflation. However allowing 51% FDI in multi brand retail has been a contentious issue between the government and other political parties.

The UPA government has been pushing the proposal saying that it will bring in reforms in the country whereas other political parties, including allies of the UPA government have opposed it vehemently stating that allowing major global retailers would lead to unemployment among the un-organised sector and wipe away the small kirana (mom & pop) shops. The proposal had also drawn protests from the Confederation of All India Traders, which accused the government of not holding proper consultations with traders and hawkers and only meeting a few selected groups.

The S&P CNX Nifty opened at 5,505.35; about 15 points lower as compared to its previous closing of 5,490.05, and has touched a high and a low of 5,519.55 and 5,486.95 respectively.

The index is currently trading at 5,511.45, higher by 6.10 points or 0.11%. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were BPCL up by 3.20%, SBI up by 2.35%, Tata Motors up by 1.25%, Ranbaxy up by 1.19% and IDFC up by 1.04%.

On the flip side, Sterlite Industries down by 3.47%, Bharti Airtel down by 1.42%, RCom down by 1.28%, ACC down by 1.15% and Cairn down by 1.11%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down 1.29 points or 0.05% to 2,402.30, Hang Seng was down 211.74 points or 0.98% to 21,337.54, Jakarta Composite was down 20.64 points or 0.52% to 3,974.39, KLSE Composite was down 1.08 points or 0.07% to 1,559.44, Straits Times was down 30.49 points or 1.02% to 2,965.10, Seoul Composite was down 24.29 points or 1.20% to 2,004.36 and Taiwan Weighted was down by 43.46 points or 0.54% to 7,958.22.

On the flip side, Nikkei 225 was up by 20.82 points or 0.22% to 9,574.82.