Indian equities trim losses to trade in green

Indian equities pared losses to continue its firm trade above neutral line in the late afternoon session as investors started nibbling front line counter. Traders were seen piling up position in Metal, Realty and Auto sector while selling was witnessed in Oil & Gas, FMCG and IT sector. Metal stocks were mostly higher on hopes of further monetary policy easing from China, the world's largest consumer of copper and aluminum. The HSBC services PMI survey indicated that India's services sector activity expanded in June for the eighth consecutive month although at a slower clip. The report highlighted that though rise in new orders are likely to hold up service sector activity in coming months, however falling demand from India's traditional overseas trading partners like the United States and the European Union could dampen future growth prospects of Indian companies. In the scrip specific development, Tata Motors was seen trading weak in red after CLSA in its report 'Top 5 Buy Ideas' replaced the company with Lupin, citing lack of triggers in the automaker as compared with the drugmaker’s expected product launches in the US.

On the global front, the Asian markets were trading in green barring Shanghai Composite and Hang Seng while the European markets were trading in red on pessimistic note. The European Central Bank (ECB) is scheduled for a policy meeting on interest rates on July 05, 2012 and is expected to cut its benchmark rate by 25 basis points from 1% to an all time low of 0.75%. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,250 and 17,400 levels respectively. The market breadth on BSE was positive in the ratio of 1573:1142 while 141 scrips remained unchanged.

The BSE Sensex is currently trading at 17,462.92 up by 37.21 points or 0.21% after trading as high as 17,523.77 and as low as 17,372.45. There were 18 stocks advancing against 11 declines while 1 stock remained unchanged on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.73% while Small cap index climbed 0.62%.

On the BSE sectoral space, Metal up 1.96%, Realty up 1.49%, Auto up 0.82%, Bankex up 0.51% and Consumer Durables up 0.41% were the top gainers, while Oil & Gas down 0.62%, FMCG down 0.56%, IT down 0.52%, Health Care down 0.12% and TECk down 0.06% were the top laggards in the space.

Sterlite Industries up 4.18%, Jindal Steel up 4.09%, Maruti Suzuki up 2.29%, SBI up 1.92% and Bajaj Auto up 1.76% were the major gainers on the Sensex, while ONGC down 1.87%, Wipro down 1.68%, Dr Reddy’s Lab down 1.53%, HUL down 1.12% and Infosys down 0.79% were the major losers in the index.

Meanwhile, Kaushik Basu, chief economic advisor to the finance ministry has said that Diesel should go on float like petrol and the idea to fix the tax component for petrol price could be considered and discussed. He said that “Both Diesel and Petrol should go on float, as float does not necessarily mean to increase the price but to increase in a correlated way along with the international crude price”.

The chief economic advisor to the finance ministry also said that is pitching for allowing FDI in retail sector that may help the farmers to a great extent and would also provide a major thrust to Indian exports as big retailers would eventually source more products from India. The entry of modern retailers in China and Indonesia has dampened exports from India. He opined that modern supply chain management, procurement from farmers and local industry and eventually export of goods by large foreign retailers will benefit all.

Talking about inflation he said that current WPI inflation would remain around 7.5 % and is expected to drop to lower than 7 per cent in mid-October. A combination of monetary and fiscal policy can only control the price.

The S&P CNX Nifty is currently trading at 5,291.50, higher by 3.55 points or 0.07% after trading as high as 5,317.65 and as low as 5,273.30. There were 31 stocks advancing against 19 declines on the index.

The top gainers on the Nifty were Jindal Steel up 4.27%, Sterlite Industries up 4.13%, Sesa Goa up 3.23%, JP Associates up 2.54% and Maruti  Suzuki up 2.21%.

ONGC down 2.34%, Wipro down 1.86%, Dr Reddy’s Lab down 1.63%, HCL Tech down 1.56% and Asian Paints down 1.43% were the major losers on the index.

In the Asian space, Jakarta Composite climbed 0.82%, KLSE Composite advanced 0.32%, Nikkei 225 gained 0.41%, Straits Times Index ascended 0.22%, KOSPI Composite Index added 0.35% and Taiwan Weighted inched up 0.06%. On the other hand, Shanghai Composite eased 0.08% and Hang Seng dropped 0.13%.

The European markets were trading in red with, France’s CAC 40 shed 0.58%, Germany’s DAX dropped 0.53% and the United Kingdom’s FTSE 100 fell 0.19%.