Sensex gyrates in narrow range around crucial 17,500 levels in noon trades

Stock markets in Indian continued to oscillate in a narrow range in the Wednesday afternoon trading session after the frontline equity declined over half a percent. The benchmark gauges have halted their three straight session gaining momentum and have drifted towards the psychological 17,500 (Sensex) and 5,300 (Nifty) levels as investors took largely across the board profit booking. The key indices are trading around the session’s lows as sentiments got undermined from the dismal cues from global markets. Asian equities retracted as market participants chose to take some profits off the table after the notable rise in last two sessions while the European markets too got off to a weak start as equity indices globally got pounded after US Federal Reserve minutes showed that the central bankers remained reluctant to the idea of employing more stimulus measures to spur the economy unless the US economic expansion falters or prices rise at a rate slower than its 2 percent target. Back home, investors’ mood also got dampened by HSBC services PMI reading which showed that expansion in Indian services sector slowed to a five month low levels in March as optimism about the business outlook in the coming year faded to its weakest level since 2009. The HSBC India Composite Index which covers both the manufacturing and service sectors fell from February’s 57.8 to a four-month low of 53.6 in March. Meanwhile, bond yields have steadied a day after spiking after traders dumped bonds to make way for the heaviest weekly debt supply totaling $3.54 billion in the holiday-shortened week. On the BSE Sectoral space, investors squared off hefty positions from the rate sensitive Realty counter which remained the top laggard with close to two percent cuts. The Metal and Banking pockets too suffered severe pounding and plunged about a percent. On the other hand, the Power sector remained top gainer with around half a percent gains as the power equipment maker BHEL’s encouraging provisional earnings reading raised optimism about profits in the capital goods sector. Meanwhile, as per the global index called the Regus Business Confidence Index, Indian economy is still rated high on the business confidence index preceded only by Brazil. The high rating for the two economies on the index only confirms the fact that the current global economy is being driven by emerging economies.

Moreover, the broader markets traded on a flat note as the Small Cap index traded with marginal gains, outperforming all its larger peers. The bourses declined on weak volumes of over Rs 0.5 lakh crore while the market breadth on BSE was in favor of declines in the ratio of 1289:1219 while 118 scrips remained unchanged.

The BSE Sensex is currently trading at 17,508.50 down by 88.92 points or 0.51% after trading as high as 17,553.26 and as low as 17,480.61. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading on a flat note; the BSE Mid cap index lost 0.15% and Small cap added 0.07%.

On the BSE sectoral space, Power up 0.45%, IT up 0.39% and TECk up 0.06%, were the only gainers, while Realty down 1.79%, Metal down 0.98%, Bankex down 0.96%, Oil & Gas down 0.54% and FMCG down 0.34% were the major laggards in the space.

BHEL up 2.14%, Maruti up 1.73%, Tata Power up 1.33%, Hindalco up 0.49% and ONGC up 0.35% were the major gainers on the Sensex, while GAIL India down 3.25%, Jindal Steel down 3.08%, ICICI Bank down 2.37%, DLF down 2.15% and Sterlite down 1.86% were the major losers in the index.

Meanwhile, Indian economy is still rated high on the business confidence index preceded only by Brazil. That two developing economies have topping the index only confirms the fact that the current global economy is being driven by emerging economies. The US economy has also gained a few points on the index whereas Japan continues to score low.

The global index called the Regus Business Confidence Index is a bi-annual index based on a survey of views on revenue, profit trends and expected growth. According to the latest report, which tracks the opinions of over 16,000 business managers and owners from 86 countries, business confidence in Brazil has reached 148 points in March followed by India 143 points. The benchmark average is set at 100 to indicate a neutral outlook.

India’s position has, however, dipped by 2 index points as compared to the earlier figures of September 2011. Brazil on the other hand has notched up 2 points. Japan is on the other end of the index scoring only 82 points.

As per the report, Indian companies reporting a growth in revenue has gone upto 69% as compared to 52% six months ago. However companies reporting profit growth has come down a tad bit by 1% and is at 58%. The report has also observed that in order to grasp the growth opportunities in a sustainable way, businesses globally are still looking to cut overheads without damaging their growth prospects.

Among other countries, Germany confirmed its place as the third most confident nation at 132 in spite of a negative variation on September 2011. Mexico and South Africa were up seven points and two points respectively at 109 and 117 while UK was down one point to 113. The United States rose 15 points to score a 105. The report said revenue growth at global level remains the same at 51 per cent in March 2012 compared to six months ago. However 75% of respondents expect revenue growth in the next six months.

The S&P CNX Nifty is currently trading at 5,327.40, lower by 31.10 points or 0.58% after trading as high as 5,338.40 and as low as 5,317.25. There were 16 stocks advancing against 34 declines on the index.

The top gainers on the Nifty were BHEL up 2.54%, Ranbaxy up 2.41%, Maruti up 1.83%, Dr Reddy’s up 1.53% and Tata Power up 1.23%.

GAIL down 3.35%, Jindal Steel down 2.90%, JP Associates down 2.65%, R Infra down 2.18% and DLF down 2.17% were the major losers on the index.

In the Asian space, Jakarta Composite plunged 1.40%, KLSE Composite declined 0.49%, Nikkei 225 got thrashed by 2.29%, Straits Times drifted 0.58% and Seoul Composite plummeted 1.50%.

Meanwhile, markets in mainland China and Hong Kong remained closed on Wednesday on account of Qingming Festival while the Taiwanese markets were shut owing to Tomb Sweeping Day holiday.

The European markets were trading in red as France’s CAC 40 eased 0.38%, Germany’s DAX eased 0.56% and Britain’s FTSE 100 fell 0.19%.