Indian equities continue its lackadaisical trade in green

Indian equities continue its lackadaisical trade in green in the narrow range in the late afternoon session after prospects of monetary easing by Indian central bank was dimmed by the astoundingly strong industrial growth numbers for the month of January 2012. The gain was intact by the much needed support from industry heavyweight RIL, which was seen trading firm in green with a gain of around more than three percent. Traders were seen piling up positions in Capital Goods, Oil & Gas and Consumer Durables sector while selling was witnessed in IT, TECk and Health Care sector. Investors have started eyeing on inflation data, the government will release data on inflation based on the wholesale price index (WPI) for February 2012 on March 14, 2012. L&T and BHEL from Capital goods space was seen trading in green pulling the markets higher. Infosys and TCS from IT pack were seen trading with cut of around more than one percent pulling the markets down. Textile stocks were trading mostly on a weak note after trade secretary Rahul Khullar told reporters today that a panel of ministers will likely review a halt on fresh cotton exports from India in two weeks. On the global front, Asian markets were trading in red barring Straits Times and Hang Seng while the European markets were too trading in red on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,300 and 17,500 levels respectively. The market breadth on BSE was in favor of advances in the ratio of 1472:1205 while 113 scrips remained unchanged.

The BSE Sensex is currently trading at 17,561.12 up by 57.88 points or 0.33% after trading as high as 17,772.10 and as low as 17,494.65. There were 14 stocks advancing against 15 declines while 1 stock remained unchanged on the index.

The broader indices were trading on a positive note; the BSE Mid cap index climbed 0.77% while Small cap advanced 0.55%.

On the BSE sectoral space, Capital Goods up 2.11%, Oil & Gas up 1.28%, Consumer Durables up 1.18%, Bankex up 1.02% and Auto up 0.61% were the major gainers, while IT down 1.11%, TECk down 0.79%, Health Care down 0.14%, Metal down 0.03% and FMCG down 0.02% were the only losers in the space.

SBI up 3.63%, RIL up 3.22%, L&T up 3.10%, Bajaj Auto up 2.82% and BHEL up 2.30% and were the major gainers on the Sensex, while Cipla down 1.96%, Infosys down 1.81%, M&M down 1.75%, Tata Power down 1.75% and ONGC down 1.71% were the major losers in the index.

Meanwhile, the Indian economy is expected to get back to its 8-9% growth trajectory soon given its strong long term fundamentals as per the President of India, Pratibha Patil. While addressing the joint session of Parliament on first day of the budget session, the president stated that the government plans to achieve a 9% annual growth target in the five-year plan period ending on March 31, 2017.

She observed that though growth has slowed down to 7% this fiscal, it is still healthy given the global trends. As per Patil, the Indian economy is backed by strong fundamentals like high domestic savings and investment rates, favourable demographics, and stable democratic polities which will help bring it back to its earlier growth of 8-9%.

She also recounted the government’s efforts made to contain price rise like the intervention by the Reserve Bank of India in terms of rate cuts and government‘s measures to ease the supply constraints, like reduction in import duties and a calibrated ban on exports.

The economy grew at an average rate of more than 9% between 2005-06 and 2007-08. The growth rate fell to 6.7% in 2008-09 on account of global financial crisis, but recovered the momentum to 8.4% in 2009-10 and 2010-11. Finance Minister Pranab Mukherjee, who will present the budget on March 16, is expected to set a target of 7.5-8% economic growth for the 2012-13 fiscal beginning on April 1.

She further stated that the government is committed to working on five most important challenges faced by the Indian economy. She described the first challenge as livelihood security, the second as economic security, the third as ensuring energy security, the fourth challenge as realizing development goals without jeopardizing ecological and environmental security and the fifth as guaranteeing internal and external security.

The S&P CNX Nifty is currently trading at 5,347.80, higher by 14.25 points or 0.27% after trading as high as 5,421.90 and as low as 5,327.30. There were 27 stocks advancing against 23 declines on the index.

The top gainers on the Nifty were SBI up 3.53%, RIL up 3.06%, L&T up 3.04%, Reliance Power up 2.75% and Bajaj Auto up 2.46%.

Sesa Goa down 2.09%, ONGC down 1.84%, Tata Power down 1.79%, Cipla down 1.76% and M&M down 1.68% were the major losers on the index.

In the Asian space, Shanghai Composite slipped 0.19%, Jakarta Composite fell 0.40%, KLSE Composite sank 0.76%, Nikkei 225 declined 0.40%, Seoul Composite slumped 0.78% and Taiwan Weighted plunged 1.10%. On the other hand, only Straits Times inched up 0.15% and Hang Seng added 0.23%.

The European markets were trading in red with, France’s CAC 40 descended 0.28%, Germany’s DAX dropped 0.39% while Britain’s FTSE 100 shed 0.39%.