Markets trading flat amid cautious trade

Indian equity markets extremely choppy and witnessing sea saw trade as investors mostly indulging in stock specific activity amid a lack of triggers ahead of F&O series expiry. The Sensex is now up 3 points while Nifty is down marginally at 5,198.05. The rating downgrade by Standard & Poor's and concerns about lower earnings of India Inc are also weighing to a notable extent. On sectoral front, stocks from consumer durables, information technology and metal sectors were finding support, those from PSU, realty, automobile and power sectors were mostly trading weak. On the global front, most Asian stock markets were modestly higher on Thursday as the Federal Reserve left the door open for more stimulus measures ahead, while the earnings season continued to have a mixed impact across the region. Back home, the market breadth favoring the negative trend; there were 1,002 shares on the gaining side against 1,230 shares on the losing side while 118 shares remained unchanged.

The BSE Sensex is currently trading at 17,154.79, up by 3.50 points or 0.02%. The index has touched a high and low of 17,193.25 and 17,101.73 respectively. There were 16 stocks advancing against 14 declining ones on the index.

The broader indices too slipped along with the frontline indices; the BSE Mid cap and Small cap indices were down by 0.13% and 0.07% respectively.

The top gaining sectoral indices on the BSE were CD up by 0.53%, TECk up by 0.50%, Metal up by 0.44% and Information Technology up by 0.43%. While, PSU down by 0.57%, Auto down by 0.52%, Realty down by 0.41%, Power down by 0.30% and Oil & Gas down by 0.28% were the top losers on the index.

The top gainers on the Sensex were Jindal Steel up by 2.12%, Tata Steel up by 1.20%, Infosys up by 1.09%, ITC up by 0.51% and Bharti Airtel up by 0.49%.

On the flip side, Gail India down by 2.84%, Hero MotoCorp down by 2.35%, Bajaj Auto down by 1.70%, DLF down by 1.62% and HUL down by 1.15% were the top losers on the Sensex.

Meanwhile, reacting to Standard & Poor’s (S&P) negative outlook on the Indian economy, the Finance Minister Pranab Mukherjee has stated that it is a timely warning but there is no need to get panic as the government is committed to economic reforms. He further reassured the country that the economy will grow around the 7% mark this year and the fiscal deficit shall be controlled to 5.1% of the GDP.

The government will take note of S&P’s decision and work to push economic reforms for greater growth. Also the process of reforms and the administrative decisions required to ensure that the fiscal deficit is retained at projected level would be taken.

The FM has admitted to the fact that there has been a delay in passing certain financial sector reforms but they will definitely be taken up in the next session of Parliament. The government will also discuss the Direct Taxes Code (DTC) Bill and other legislations that have received the approval of the standing committee.

Prime Minister’s Economic Advisory Council Chairman C Rangarajan has also stated that the S&P action is just one perception. It is just a downgrade in outlook and things might change if India can prove to the world that its economy can grow at 7% plus and can contain its fiscal deficit.

The credit ratings agency, S&P revised India’s economic outlook to negative. The reason cited for the downgrade was the large fiscal deficit, low expectations of economic reforms and a slowing down of GDP growth. S&P has gone a step ahead and said that there is at least one-in-three likelihood of a ratings downgrade if the external position continues to deteriorate, growth prospects diminish, or progress on fiscal reforms remains slow in a weakened political setting (in the next two years).

The S&P CNX Nifty is currently trading at 5,198.05, down by 3.95 points or 0.08%. The index has touched a high and low of 5,215.60 and 5,183.65 respectively. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Kotak Bank up by 1.59%, Jindal Steel up by 1.25%, Grasim up by 1.23%, Tata Steel up by 1.22% and Ambuja Cement up by 1.13%.

On the flip side, Hero MotoCorp down by 2.87%, JP Associates down by 2.72%, GAIL down by 2.55%, DLF down by 1.96% and IDFC down by 1.87% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite up 0.01%, KLSE Composite slid 0.02%, Nikkei 225 up 0.01%, Straits Times up 0.06%, Taiwan Weighted lost 0.55%, Seoul Composite was up by 0.10%, Hang Seng gained 0.45%, and Jakarta Composite added 0.72%.