Indian equities pare gains; trade gyrates around neutral line

Indian equities pared gains to continue its trade gyrating around the neutral line in the late afternoon session on account of selling in front line counters. The market sentiment was boosted from the morning by provisional data showing that foreign funds remained buyers of Indian stocks on Thursday, i.e. August 16, 2012. Benchmarks managed to lock gains even after Prime Minister Manmohan Singh's Economic Advisory Council lowered India’s economy forecast to 6.7% from earlier estimate of 7.5-8.0%. However, the gains erased and cautious crept in after all 3 Comptroller and Auditor General (CAG) reports (coal, power and aviation) were tabled in Rajya Sabha. CAG report cited that the coal scam is bigger than 2G case. The report pointed out that the presumptive loss to government stands at Rs 1.86 lakh crore in scam, which is quite higher than the notional loss of Rs 1.75 lakh crore due to 2G scam. Traders were seen piling up position in FMCG, IT and TECk sector while selling was witnessed in Realty, Power and Metal sector. The stock market will remain close on Monday i.e. August 20, 2012, on account of Ramzan Id.

On the global front, the Asian markets were trading in green barring Kospi Composite Index and Taiwan Weighted while the European markets were trading on optimistic note. Germany’s Merkel stated during a trip to Canada that Europe’s largest economy was committed to maintaining the euro. Merkel voiced out that the European Central Bank’s insistence on conditionality in return for help to lower borrowing costs in indebted countries matches Germany’s priorities to end the crisis in the euro region. Besides, Spain will apply for aid at a meeting of finance ministers and central bank governors next month, allowing the ECB to buy Spanish government debt in the secondary market once approval is won. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,350 and 17,600 levels respectively. The market breadth on BSE was negative in the ratio of 1198:1468 while 155 scrips remained unchanged.

The BSE Sensex is currently trading at 17,687.51, up by 30.30 points or 0.17% after touching a high of 17801.39 and low of 17622.62. There were 15 stocks advancing against 15 declines on the index.

The broader indices continued to trade on a mixed note; the BSE Mid cap index was down by 0.02% and Small cap index was up by 0.09%.

The top gainers on the BSE sectoral space were, FMCG up by 1.24%, IT up by 1.10%, TECk up by 0.95%, Auto up by 0.68% and Health Care up by 0.45%, while Realty down by 1.50%, Power down by 1.37%, Metal down by 1.06%, Capital Goods down by 0.79% and PSU down by 0.60% were the top losers on the sectoral space.

Tata Motors up by 2.10%, Bharti Airtel up by 1.65%, Hindustan Unilever up by 1.58%, Infosys up by 1.40% and ITC up by 1.32% were major gainers on the Sensex, while Tata Power down by 3.91%, Jindal Steel down by 2.71%, Hindalco Industries down by 2.35%, Gail India down by 1.59% and L&T down by 1.33% were the major losers on the index.

Meanwhile, with an attempt to catalyze foreign investments, the Commerce and industry minister Anand Sharma indicated that the centre is likely to announce major decisions on opening up of multi-brand retail to foreign stores and permitting overseas airlines to acquire stakes in Indian carriers by the mid-September.

The ministry affirmed some aggressive policy measures relating investments and FDI to spur India’s economic growth. It confirmed that some senior secretaries of the ministries and concerned departments along with key ministers and the prime minister were consulted and also promised to take decisions to improve economic climate in the country within three weeks.

The government had decided to defer its decision allowing 51% FDI in multi-brand retail after widespread protests from some allies in the UPA. A decision on 49% investment in Indian carriers by foreign airlines is also stuck because of opposition from Trinamool Congress.

The S&P CNX Nifty is currently trading at 5,358.50, down by 4.45 points or 0.08% after trading in a range of 5399.95 and 5,341.70. There were 14 stocks advancing against 35 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were Tata Motors up by 2.10%, Hindustan Unilever up by 1.70%, Infosys by 1.42%, TCS up by 1.37% and ITC up by 1.35%. While, Tata Power by 4.00%, Jindal Steel down by 3.67%, DLF down by 3.15%, Reliance Infrastructure down by 2.98% and Hindalco Industries down by 2.66% were top losers on the index.

Most of the Asian indices were trading in green; Nikkei 225 added 0.77%, Hang Seng index surged 0.51%, Straits Times rose 0.03%, Shanghai Composite held in green by 0.13% and KLSE Composite gained 0.09%.

On the other hand, Kospi Composite Index down 0.58% and Taiwan Weighted lost 0.30% while Jakarta Composite was not trading as Indonesian banks, the stock exchange and other financial institutions will be closed for five days, from Friday until Wednesday, due to public and Idul Fitri holidays.

The European markets were trading in green with, France’s CAC 40 ascending 0.16%, Germany’s DAX added 0.14% and the United Kingdom’s FTSE 100 jumped 0.07%.