Equity markets hold marginal gains; Sensex, Nifty in a narrow range

Benchmarks holding marginal gains as there is no trigger globally as well as internally. The BSE Sensex and Nifty continued to move in a narrow range around its yesterday's closing value. On the sectoral front Metal and automobile stocks were trading weak on the major Indian bourses. Oil and Auto stocks were mostly subdued. Consumer durables stocks, which had a good outing on Tuesday, were mostly trading flat at present. Information technology stocks were finding good support. Select stocks from realty, capital goods, healthcare and banking sectors were trading higher. Meanwhile Satyam will be merged into Tech Mahindra with effect from April 1, 2011. The entity will form the sixth largest IT services company. Swap ratio: Satyam's shareholders will get one share of Tech Mahindra for every 8.5 shares held. Mahindra group will hold 26.3% and British Telecom will hold 12.8% in the merged entity. Mahindra Satyam fell 0.6% while Tech Mahindra gained 2% amid heavy volumes. On the global front most of the Asian markets were trading in red on fresh worries about China's economic slowdown. Back home, the market breadth favoring the negative trend; there were 1,367 shares on the gaining side against 1,091 shares on the losing side while 121 shares remained unchanged.

The BSE Sensex is currently trading at 17,356.57, up by 40.39 points or 0.23%. The index has touched a high and a low of 17,378.08 and 17,275.88 respectively. There were 16 stocks advancing against 13 declines and one remained unchanged on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged by 0.75% and 0.49% respectively.

The top gaining sectoral indices on the BSE were, IT up by 1.04%, TECk up 0.98%, Realty up by 0.94%, Capital Goods (CG) up by 0.77% and Health care (HC) up by 0.73%. While, Metal down by 0.68%, Auto down by 0.48%, Oil & Gas down by 0.17%, Consumer Durables (CD) down by 0.01% were the top losers on the index.

The top gainers on the Sensex were TCS up by 2.67%, HUL up by 1.88%, BHEL up by 1.30%, HDFC Bank up by 0.95% and Bajaj Auto up by 0.88%.

On the flip side, Hindalco Industries down by 2.60%, Jindal Steel down by 2.32%, Tata Motors down by 1.91%, Maruti Suzuki down by 1.57% and Sterlite Industries down by 0.92% were the top losers on the Sensex.

Meanwhile, initiatives taken in the budget to improve growth in agriculture sector combined with the slow pace of growth could help contain inflation, as per Deputy Governor of RBI, Subir Gokarn. As per Gokarn’s estimates, food prices are expected to ease in the coming months due to good monsoon.

Also initiatives announced by the Finance Minister in the budget to step up agricultural productivity would bring improvement in the growth of the sector, helping the food prices to soften. Moreover even though rising crude oil prices will exert inflationary pressures, the weakening in demand due to subdued growth in GDP is likely to keep the inflation numbers low.

Commenting on the new consumer price index (CPI), Gokarn stated that it is too early to make it a benchmark for policy formulation. However he believes that the index does show promise as the benchmark for inflation management. Gokarn also stated that full capital account convertibility would take place in the years to come.

The country has seen a recent surge in prices and the inflation even though increasing at a slower pace, is around the 7% mark, much higher than the RBI comfort level of 5-6%. With observations of inflation expecting to moderate coming from Subir Gokarn, someone who handles the monetary policy of the RBI, expectations of an interest rate cut have been strengthened

The S&P CNX Nifty is currently trading at 5,289.65, up by 14.80 points or 0.28%. The index has touched a high and a low of 5,291.40 and 5,256.00 respectively. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were JP Associates up by 2.88%, TCS up by 2.83%, Ambuja Cement up by 2.66%, ACC up by 2.37% and Ranbaxy up by 2.21%.

On the flip side, Jindal Steel down by 2.52%, Hindalco down by 2.21%, Cairn down by 1.83%, Tata Motors down by 1.55% and Maruti Suzuki down by 1.35%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined by 0.33%, Hang Sang slid 0.47%, Nikkei 225 lowered by 0.55%, Straits Times lost 0.26%, Seoul Composite surrendered 0.73%

On the flip side, Jakarta Composite gained 0.09%, KLSE Composite added 0.04% and Taiwan Weighted accumulated gains of 0.12%.