Indian equities trim gains; Sensex, Nifty overlooks inflation numbers

Indian equities pared gains taking clues from European counterparts but continued trade above the neutral line in the late afternoon session. The lower than expected inflation numbers which came at 7.25% versus 7.55% in May, dropping to a 5-month low too failed to keep the positive momentum alive in the market. Traders were seen piling up position in Health Care, Consumer Durable and Bankex sector while selling was witnessed in IT, Metal and TECk sector. Axis Bank, PNB, Bank of Baroda, SBI, HDFC Bank and ICICI Bank from Banking counters were seen trading firm in green pulling the markets higher. Industry heavyweight RIL was trading with a gain of around half percent giving the much needed support. Infosys, TCS, Wipro and HCL Tech from IT pack were trading in red drifting the market lower. Tata Steel, Jindal Steel, Hindalco Industries, Sesa Goa and Sterlite Industries from Metal counters were trading in red exerting pressure on the market.

In the scrip specific development, Thirumalai Chemicals is locked at upper circuit limit on reporting 10-fold rise in Q1 net profit. South Indian Bank was trading firm after the board of directors at its meeting held on July 16, 2012, approved raising funds via QIP. MindTree was up as the company's standalone net profit has more than doubled to Rs 89 crore for the first quarter ended June 30, 2012. Castrol India was firm in green after the company’s board at its meeting held today i.e. July 16, 2012, approved 1:1 bonus issue.

On the global front, the Asian markets were trading on a mixed note while the European markets were trading on a pessimistic note. Investors have started eyeing bond auctions of Spain and France which is scheduled on Thursday i.e. July 19, 2012, ahead of a meeting of European officials which is scheduled on Friday i.e. July 20, 2012, to hammer out the final details of the Spanish bank bailout. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,200 and 17,200 levels respectively. The market breadth on BSE was positive in the ratio of 1542:971 while 109 scrips remained unchanged.

The BSE Sensex is currently trading at 17,213.85 up by 0.15 points after trading as high as 17,282.30 and as low as 17,162.13. There were 18 stocks advancing against 11 declines while 1 stock remained unchanged on the index.

The broader indices were trading on a mixed note; the BSE Mid cap was up 0.02% while Small cap indices were trading lower by 0.04%.

The top gainers on the BSE sectoral space were, Health Care up by 1.39%, Consumer Durable up by 1.37%, Bankex up by 0.53%, Oil & Gas up by 0.38% and PSU up by 0.24% while, IT down by 1.54%, Metal down by 1.24%, TECk down by 0.67%, Capital Goods down by 0.37% and Realty down by 0.20% were top losers on the index.

Bharti Airtel up by 3.70%, Dr Reddy’s Lab up by 2.44%, Maruti Suzuki up by 2.14%, SBI up by 1.36% and Cipla up by 1.19% were the major gainers on the Sensex, while Tata Steel down by 3.43%, Jindal Steel down by 2.39%, Infosys down by 2.15%, Tata Power down by 1.67% and TCS down by 1.49% were the major losers in the index.

Meanwhile, India’s commercial services exports have declined by 27% in Q1 CY2012 as compared to the year-ago period. However, the numbers were much better than the global commercial services exports growth rate of 3% in the quarter ended March 31, 2012, according to World Trade Organisation (WTO) and UNCTAD. Also, the country witnessed 6% rise in commercial services exports on Q-o-Q basis. In October-December 2011 quarter, India’s commercial services exports had declined by 5%.

The fall in growth was mainly due to global economic slowdown. Countries like China and Philippines emerging as stronger players in the services sector was other reason, to mitigate that India needs to focus on escalating its global competitiveness in the commercial services exports. Without enhancing the nation’s competitiveness in the global market it will face more problems both in goods and services exports.

Export earnings of the country also suffered as information technology companies, which accounts for a major chunk in the services export, had to offer discounts to their clients due to fall in rupee. The rupee has depreciated by around 20% against the US dollar from a year ago. Software, business and financial services, communication services, travel, transportation, insurance are some of the major services that are exported.

Besides, India’s commercial services imports grew by 5% in Q1 CY12, down from 14% in the year-ago period.

The S&P CNX Nifty is currently trading at 5,232.10, up  by 4.85 points or 0.09% after trading as high as 5,246.85 and as low as 5,209.20. There were 34 stocks advancing against 16 declines on the index.

The major gainers on the Nifty were Bharti Airtel up by 3.65%, DR Reddy’s Lab up by 2.60%, Maruti Suzuki up by 2.24%, Axis Bank up by 1.72%, and PNB up by 1.71%.  While Tata Steel down by 3.51%, Jindal Steel down by 2.54%, Infosys down by 2.22%, Tata Power down by 1.72% and TCS down by 1.49% were major losers on the index.

Asian equity indices were mostly trading in the green; Hang Seng index up by 0.15%, Nikkei 225 added 0.05%, Kospi Composite Index rose 0.27%, Jakarta Composite gained 0.81% and KLSE Composite rose 0.53%. On the flip side, Strait Times lost 0.03%, Taiwan Weighted slid 0.20% and Shanghai Composite plunged 1.74%.

The European markets were trading in red with, France’s CAC 40 descending 0.31%, Germany’s DAX dropped 0.05% and the United Kingdom’s FTSE 100 eased 0.15%.