Benchmarks turn choppy in noon deals

Indian equity benchmarks have pared almost all of their gains to trade flat in noon deals as investors opted to book profit at higher levels. Traders turned cautious after the International Monetary Fund (IMF) has cut its global growth forecasts for a second time this year, citing weak commodity prices and a slowdown in China and warned that policies aimed at increasing demand were needed. IMF has also lowered India's growth forecast to 7.3 per cent this year, from its earlier estimate of 7.5 per cent, and said that a faster-than-expected deceleration in inflation provides leeway for modest cuts in interest rates. Some cautiousness also crept in after Moody's Investors Service has said that with India facing fourth largest number of terror attacks across the world in 2013, such incidents have a significant and long-lasting negative impact on the economy.

On the global front, European counters have made a positive start and are trading with a gain of around half a percent in early deals. All the Asian counters are trading higher at this point of time, building on their biggest five-day advance in almost four years, as Samsung Electronics Co. jumped after quarterly profit topped estimates and investors awaited a Bank of Japan decision on monetary policy. Back home, on the sectoral front, realty, metal and auto witnessed the maximum gain in trade, while technology, healthcare and software remained the top losers on the BSE sectoral space. The broader indices too were trading mixed, while the market breadth on the BSE was positive; there were 1,483 shares on the gaining side against 941 shares on the losing side while 116 shares remain unchanged.

The BSE Sensex is currently trading at 26943.72, up by 10.84 points or 0.04% after trading in a range of 26877.51 and 27069.33. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.08%, while Small cap index up by 0.51%.

The gaining sectoral indices on the BSE were Realty up by 2.14%, Metal up by 0.99%, Auto up by 0.91%, Power up by 0.79% and Consumer Durables up by 0.67%, while TECK down by 0.49%, Healthcare down by 0.45%, IT down by 0.35%, Bankex down by 0.30% and Capital Goods down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 4.26%, Hindalco up by 4.08%, ONGC up by 2.17%, Tata Motors up by 2.02% and Bajaj Auto up by 2.00%. On the flip side, Wipro down by 2.03%, Bharti Airtel down by 1.92%, Dr. Reddys Lab down by 1.04%, ICICI Bank down by 0.92% and Larsen & Toubro down by 0.81% were the top losers.

Meanwhile, Moody’s in its study has said that the terrorist attacks significantly weaken the economic activity of the country with long-lasting effects. India facing fourth largest number of terror attacks across the world in 2013 is having a negative impact on the economy. The effect on economic activity and investment was significant and lasted several years. The study measures the impact of terrorism on a country's economic growth, investment growth, government expenditure and government cost of borrowing.

Moody’s further stated that an additional terrorist attack in a country with high incidence of terrorism would likely have a lower impact than if that same attack were on a country with zero terrorist events. Moody's in its study said that terrorist events reduce economic activity and investment in mature economies. Moody's estimated that owing to the same terrorist episodes, investment growth takes an even greater immediate hit, declining between 1.3 percentage points and 2.1 percentage points.

Earlier in 2013, the terrorist attacks in just four countries contributed more than 60 percent of all the terror attacks. The countries include Iraq with 24 percent of terrorist incidents, Pakistan with 19 percent, Afghanistan with 12 percent and India with around 5.8 percent. India faced 690 terror attacks while Iraq being on the top with 2,852 incidents, followed by Pakistan with 2,212 attacks and Afghanistan with 1,443 incidents. Meanwhile, 10 countries most affected by terrorism took an immediate and significant hit to growth, dampening GDP between 0.5 and 0.8 percentage points. Terrorist attacks are diverse in terms of the personal and property damage inflicted.

Moody's study consisted of a sample of 156 countries between 1994 and 2013. In order to properly measure the impact of the terrorism on the economy ,Moody's constructed an index of terrorism as a weighted average of the total number of terrorist incidents, the number of fatalities, the number of injuries and the property damage inflicted by the terrorist event. Besides, the index also accounted for the size of the countries.

The CNX Nifty is currently trading at 8147.00, down by 5.90 points or 0.07% after trading in a range of 8132.90 and 8186.85. There were 26 stocks advancing against 23 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Vedanta up by 4.26%, Cairn India up by 3.68%, Hindalco up by 3.60%, Bajaj Auto up by 2.11% and ONGC up by 2.10%. On the flip side, HCL Tech down by 2.60%, Wipro down by 1.99%, Bharti Airtel down by 1.98%, BPCL down by 1.79% and Zee Entertainment down by 1.32% were the top losers.

All the Asian markets were trading in green; Jakarta Composite rose 5.89 points or 0.13% to 4,451.67, KOSPI Index gained 15.19 points or 0.76% to 2,005.84, FTSE Bursa Malaysia KLCI increased 17.22 points or 1.04% to 1,679.73, Straits Times surged 50.72 points or 1.75% to 2,948.13, Taiwan Weighted strengthened 101.13 points or 1.2% to 8,495.23, Nikkei 225 added 136.88 points or 0.75% to 18,322.98 and Hang Seng was up by 498.28 points or 2.28% to 22,329.90.

European markets were trading in green; Germany’s DAX gained 0.56%, France’s CAC rose 0.41% and UK’s FTSE was up by 0.47%.