Sensex show sideways movement in noon trades

Stock markets in India are showing lackadaisical movements in the Monday afternoon session as investors lacked conviction to pile up fresh positions amid uncertain market conditions. Market participants chose to consolidate their positions around previous closing levels a session after witnessing markets’ vehemently rally of over two and half a percentage points which helped the bourses not only extend their gaining streak for the fourth successive session but also soar to highest levels in more than two-months. The key equity gauges continued to move in a sideways direction in a narrow range around the psychological 5,250 (Nifty) and 17,400 (Sensex) levels, lacking any significant upside triggers as investors indulged only in stock specific activities. Cues from the global front too remained subdued as Asian markets exhibited mixed trends. The benchmark in China dipped lower after reporting weaker than expected growth in manufacturing activity in the month of June and intensifying concerns over global growth prospects. The European markets too consolidated around its previous closing levels as the optimism over last week's series of unanticipated new measures to resolve the onerous financial trouble in the Euro-zone got tempered by worries over global growth after a survey showed weak manufacturing sector growth in Asian nations especially in the region’s biggest economy - China. On the domestic front, the downside was capped by upbeat Indian manufacturing data which expanded to 55 in June, 2012 as against 54.8 in the previous month of 2012, helped mainly by product quality improvement and stronger demand. However, the upside for the markets was capped by the pessimistic cues from money market where Indian rupee returned to its depreciating ways as it inched closer to the psychological 56 mark against the US dollar. On the BSE sectoral space, profit booking was largely evident in the rate sensitive Auto sector after majors including Bajaj Auto and TVS Motors reported weaker than expected monthly sales numbers. On the other hand, investors piled up positions in the defensive Consumer Durables and high beta Realty pockets which surged over a percent in the session.

Moreover, the broader markets continued to trade on a positive note with notable gains of over half a percent and outperformed their larger peers. The bourses consolidated on weak volumes of over Rs 0.5 lakh crore on the second day a new F&O series while the market breadth on BSE was in favor of advances.

The BSE Sensex is currently trading at 17394.98 down by 35.00 points or 0.20% after trading as high as 17464.47 and as low as 17379.75. There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.68% and Small cap index climbed 0.82%.

On the BSE sectoral space, Consumer Durables up 1.21%, Realty up 1.10%, Capital Goods up 0.41%, Healthcare up 0.38% and TECk up 0.04% were the only gainers, while Auto down 0.62%, Oil & Gas down 0.44%, IT down 0.22%, Metal down 0.17% and Bankex down 0.08% were the major laggards in the space.

Maruti up 1.52%, GAIL up 1.09%, Bharti Airtel up 0.84%, BHEL up 1.90% and Cipla up 2.30% were the major gainers on the Sensex, while Jindal Steel down 2.41%, Hero Moto down 1.41%, ICICI Bank down 1.32%, ONGC down 1.18% and Tata Power down 1.20% were the major losers in the index.

Meanwhile, even as the Euro-zone financial trouble continues to linger and most nations struggle to maintain their growth momentum, industrial activity in India resiliently expanded at a brisk pace in the month of June with business conditions in manufacturing sector improving at fastest rate in four months. The manufacturing sector continued to gain momentum, helped mainly by product quality improvement and stronger demand. But at a time when domestic demand was holding up, overseas demand showed signs of weakening.

According to the HSBC purchasing managers’ index (PMI), the manufacturing sector expanded to 55 in June, 2012 as against 54.8 in the previous month of 2012. A figure above 50 signals increase in production while, a number below 50 indicates contraction. The survey underscored that India’s industrial activity intensified in June and factories hired at the fastest rate in more than two years. The employment sub-index climbed to the highest levels since May 2010 at 52.4 in June.

As a result of higher levels of new orders due to product quality improvement and stronger demand, output increased further in June, extending the current expansionary period to three years and three months. However, the gloomy global scenario adversely impacted new export orders, which rose at their slowest pace since November 2011, owing to sagging demand from top trading partners like Europe and the United States.

Moreover, inflation remained a cause of concern as input price inflation in the sector climbed sharply in June by the highest rate since August 2011, furthering the inflationary period to 39 successive months. Besides, the output prices too rose since manufacturers decided to pass on the further rise in cost of inputs on to customers. The HSBC survey further indicated that looking at the current scenario of high inflationary pressure, there was no room for the Reserve Bank of India to employ further monetary easing measures. Indian central bank had left key interest rates unchanged in its recent monetary policy review meet on June 18 after slashing the repo and reverse rates by 50 basis points each in its previous policy review meet.

The S&P CNX Nifty is currently trading at 5,267.60, lower by 11.30 points or 0.21% after trading as high as 5,289.70 and as low as 5,263.35. There were 24 stocks advancing against 26 declines on the index.

The top gainers on the Nifty were ACC up 2.68%, Cairn up 1.77%, DLF up 1.54%, Ambuja Cement up 1.38% and Maruti up 1.21%.

Jindal Steel down 2.82%, Hero Moto down 1.73%, Tata Motors down 1.44%, ICICI Bank down 1.36% and ONGC down 1.26% were the major losers on the index.

In the Asian space, Jakarta Composite climbed 0.78%, KLSE Composite rose 0.28%, Straits Times Index advanced 0.48% and Taiwan Weighted ascended 0.67%.

On the other hand, Shanghai Composite eased 0.16%, Nikkei 225 inched down 0.04% and KOSPI Composite Index fell 0.13%.

Stock markets in Hong Kong remained closed on Monday on account of a public holiday.

The European markets got off to a tepid start as France’s CAC 40 eased 0.13%, Germany’s DAX declined 0.40% and the United Kingdom’s FTSE 100 rose 0.12%.