Local equity markets managed to keep their head above the water; Nifty continues to trade past 5300 mark

Local equity markets have managed to stay afloat in green despite the red start of European markets, thanks to massive support from stocks belonging from the Metal, Auto and Public Sector Undertaking counters. Sustained buying by funds and retailers amid a firming trend in Asian region, have mainly held the bourses in protracting their northbound journey for third straight session. However, stocks from Realty, Capital Goods and Technology counters are seen limiting the uptrend of Indian equity markets. 30 share barometer index, Sensex, gaining over 0.15% is comfortably trading over 17600 crucial mark, while the 50 share index, Nifty, on NSE, too is gyrating above the 5300 psychological mark. The broader indices, however, have trimmed some of its gains.

On the global front, European stocks opened lower Wednesday, though investors become increasingly confident that further action from central banks is on its way. This confidence increased on Tuesday after U.S. Federal Reserve Bank of Boston President Eric Rosengren said the Federal Reserve should launch an aggressive open-ended bond-buying program to boost the economy until unemployment begins falling again.

Closer home, in stock specific action, Indiabulls group stocks were reeling under pressure after Veritas Investment Research recommended sell on all the group stocks, on the principle that corporate governance being sacrificed for enriching the controlling shareholders. In a seriously damning report, Veritas averred that the disclosures made by Indiabulls Real Estate as well as Indiabulls Power (IBPOW) are unreliable and ‘the sole purpose of IBREL is to bilk institutional and retail investors for the benefit of select insiders.’ Shares of Indiabulls Financial Service, Indiabulls Power, Indiabulls real Estate all lost in the range of 3-6%. On the flip side, public sector miner, Coal India added over a percent gains on clearing the way for signing of fresh fuel supply pacts by agreeing to pay hefty penalty on supply shortfall.

The BSE Sensex is currently trading at 17,644.63, up by 42.85 points or 0.24% after touching a high of 17,679.37 and a low of 17,605.62. There were 20 stocks advancing against 10 declines on the index.

The broader indices continued to trade in fine fettle bourses; the BSE Mid cap index and Small cap indices added 0.28% and 0.29% respectively.

The top gainers on the BSE sectoral space, Metal up by 1.54%, Auto up by 1.11%, PSU up by 0.50%, FMCG up by 0.48% and IT up by 0.42% and IT up by 0.33%, while Realty down by 0.72%, CG down by 0.28%, TECk down by 0.08% and Bankex down by 0.06% were top losers on the sectoral space.

Hindalco Industries up by 2.53%, Mahindra & Mahindra up by 2.16% Jindal Steel up by 2.03%, Sterlite Industries up by 2.01% and Tata Motors up by 1.95%, were the major gainers on the Sensex, while Gail India down by 2.23%, Bharti Airtel down by 2.06%, ONGC down by 1.54%, TCS down by 1.08% and Maruti Suzuki down by 0.75% were major losers on the index.

Meanwhile, after Reserve Bank of India (RBI) and few others, the global ratings agency CRISIL too has raised concern on India’s growth outlook and had cut country’s real gross domestic product (GDP) growth forecast for 2012-13 to 5.5 per cent from its earlier forecast of 6.5 per cent. In June too, CRISIL had scaled down its estimate for GDP growth to 6.5 per cent from an earlier 7 per cent. Another global ratings agency Fitch, too has revised down its real GDP forecasts to 6.5% and 7.0% from the earlier 7.5% and 8.0% in FY13 and FY14, respectively.

Earlier, the RBI, on July 31 in its first quarterly monetary policy review reduced the GDP forecast for the current financial year from 7.3 per cent to 6.5 per cent and hiked the inflation forecast from 6.5 per cent to 7 per cent. Though, it was still on the optimistic side but CRISIL’s forecast is one of the lowest estimates. It has also raised inflation projection for 2012/13 to 8 percent from 7 percent, factoring in the impact of a bad monsoon, which would raise food prices. As per its ‘Insight on macro-economic outlook revision 2012-13’ it has factored in the adverse impact of rainfall deficiency and worsening of the euro-zone growth outlook.

Not only this, giving another blow to the government, the rating agency has also cut the outlook for India's vast retail sector from stable to negative and warned that spending was unlikely to pick up unless consumer price inflation comes down significantly and consumers receive a ‘significant raise in real wages.’

The S&P CNX Nifty is currently trading at 5348.10, up by 11.40 points or 0.21% after trading in a range of 5,361.40 and 5,338.70. There were 32 stocks advancing against 18 declines on the index.

The top gainers on the Nifty were Hindalco Industries up by 2.48%, Tata Motors up by 1.88%, Sterlite Industries up by 1.87%, Mahindra & Mahindra up by 1.85% and Jindal Steel up by 1.74%. While, GAIL down by 2.57%, Bharti Airtel down by 2.21%, ONGC down by 1.75%, TCS down by 0.97% and Dr Reddy’s Laboratories down by 0.87% were the top losers on the index.

Most of the Asian indices were trading in green; Kospi Composite Index added 0.87%, Nikkei 225 shot higher by 0.88%, Jakarta Composite rose 0.33%, KLSE Composite jumped by 0.36%, Taiwan Weighted amassed gains of 0.33% and Shanghai Composite inched higher by 0.16%, while Hang Seng index declined by 0.29% and Straits Times shed 0.57%.

European markets have got off to a negative start; CAC 40 plunged by 0.43%, DAX declined 0.39% and FTSE 100 lost 0.63%.