Benchmarks continue to show a sluggish trend

Markets continue to show a sluggish trend in the early noon session, with not much respite in sight and the selling getting a bit aggravated, with the major benchmarks trading lower tracking weakness in some regional equity markets. Asian shares struggled on Tuesday as caution reigned ahead of this week's US Federal Reserve decision on interest rates, while the yen edged higher after the Bank of Japan refrained from any new policy steps. Back home, sentiment remained downbeat as investors booked profits after Monday’s gains even as retail inflation fell to a new low of 3.66 per cent in August. Depreciation in the rupee too supported sentiment. The rupee fell 10 paise to 66.42 against the dollar in noon trade due to fresh dollar demand from importers.

In scrip specific development, share of Maruti Suzuki is trading higher by over half a percent after the Reserve Bank of India allowed foreign investors to invest up to 40 per cent of the paid up capital in the auto maker under the Portfolio Investment Scheme. Sun Pharma is trading up by over one percent as the company is planning to acquire US Based InSite Vision Inc.

The BSE Sensex is currently trading at 25719.74, down by 136.96 points or 0.53% after trading in a range of 25718.72 and 25909.83. There were 9 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.47%, while Small cap index lost 0.21%.

The top gaining sectoral indices on the BSE were Realty up by 0.50%, FMCG up by 0.41%, INFRA up by 0.12% and IT up by 0.05%, while Metal down by 1.94%, Capital Goods down by 1.53%, Auto down by 0.98%, Bankex down by 0.80%, Consumer Durables down by 0.66% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 1.23%, Maruti Suzuki up by 1.04%, Hindustan Unilever up by 0.71%, ITC up by 0.56% and NTPC up by 0.56%. On the flip side, Tata Steel down by 3.75%, Hindalco down by 2.92%, Vedanta down by 2.67%, Tata Motors down by 2.41% and Larsen & Toubro down by 2.33% were the top losers.

Meanwhile, amid the worries of slowing growth, Finance Ministry has assured that India's growth in the current fiscal will exceed 7.5 per cent as there are 'silver linings' in the global financial turmoil, with government committed to ensuring that the country remains a 'bright spot' in the world economy because of various reasons - the twin deficits (CAD and the fiscal deficit) are well in control, and forex reserves are fairly comfortable.

Economic Affairs Secretary Shaktikanta Das has said that the ministry believes that India remains as one of the very few bright spots in the global economy, a view echoed by the IMF as well and this year we are targeting about 7.5 per cent to 8 per cent growth. We are quite confident that upwards of 7.5 per cent is what we can reasonably expect.

He said that there has been some concerns around agriculture sector, but there is some visibility of pick up in rural demand. Besides, increased infrastructure spending and more FDI coming in with global majors like GE and Foxconn investing in India makes a case for better manufacturing output. He also said that there are some concerns with regard to corporate profits having come down and affecting the corporate results and therefore the direct tax collections. But, the indirect tax collections have been very buoyant and the overall budgeted tax numbers will be achieved.

Shaktikanta Das said given the global crisis, India is now focusing on governance reform, strengthening resilience in macro economy so that it can seize the opportunity that the current global situation throws up. Das added that the RBI and the government are monitoring the current account deficit position and will take steps to keep it at manageable levels and the government is committed to continue with reforms, ease of doing business. The Indian economy expanded by 7 per cent in the first quarter (April-June) of current fiscal compared to 7.3 per cent in the same quarter last fiscal.

The CNX Nifty is currently trading at 7826.50, down by 45.75 points or 0.58% after trading in a range of 7821.40 and 7880.00. There were 12 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 1.92%, Tech Mahindra up by 1.70%, Power Grid up by 1.25%, Sun Pharma up by 1.23% and Hindustan Unilever up by 0.85%. On the flip side, Tata Steel down by 3.99%, Vedanta down by 3.31%, Hindalco down by 2.92%, Larsen & Toubro down by 2.53% and Tata Motors down by 2.48% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite decreased 76.61 points or 2.46% to 3,038.18, Hang Seng decreased 55.77 points or 0.26% to 21,506.13, Jakarta Composite decreased 52.31 points or 1.19% to 4,338.07, Taiwan Weighted decreased 47.3 points or 0.57% to 8,259.99 and Straits Times decreased 25.3 points or 0.88% to 2,846.17, while KOSPI Index increased 4.68 points or 0.24% to 1,936.14, FTSE Bursa Malaysia KLCI increased 7.91 points or 0.48% to 1,647.54 and Nikkei 225 increased 142.83 points or 0.8% to 18,108.53.