Benchmarks trade flat with negative bias

Indian equity benchmarks have kick-started the trade on a flat note due to mixed global cues. The US market closed higher on Friday on hopes of some easing by Federal Reserve and likely new bond buying plan by European Central Bank. However, most of the Asian equity indices were trading in the red at this point of time, leading the pack is China, down by about a percent after a government report showed that Chinese industrial companies’ profits fell for a fourth month in July. Back home, traders will be eyeing the political development to take further cues, as the monsoon session of Parliament has stuck in a deadlock over the comptroller and auditor general’s report on alleged discrepancies in coal block allocations and traders are not expecting policy measures if the situation remains the same. The sentiments are also likely to be under pressure as the Reserve Bank of India has said that growth deceleration in Indian economy has been led primarily by a 46% dip in new investments in large projects. On the sectoral front oil and gas witnessed the maximum gain in trade followed by consumer durables and fast moving consumer goods while, metal, realty and capital goods remained the top losers on the BSE sectoral space. Meanwhile, PSU oil marketing companies like BPCL, HPCL and IOC edged lower in the trade after crude prices made some recovery with the start of the new week and Brent crude rose more than a dollar on Monday to above $115 per barrel. The market breadth on the BSE was positive; there were 829 shares on the gaining side against 606 shares on the losing side while 84 shares remained unchanged.

The BSE Sensex opened at 17,769.44; about 14 points lower compared to its previous closing of 17,783.21, and has touched a high and a low of 17,820.07 and 17,761.75 respectively. The index is currently trading at 17,766.10, down by 17.11 points or 0.10%. There were 12 stocks advancing against 18 declines on the index.

The overall market breadth has made a positive start with 54.58% stocks advancing against 39.89% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices down by 0.18% and 0.14% respectively.

The top gaining sectoral indices on the BSE were Oil and Gas up by 0.61%, CD up by 0.30%, FMCG up by 0.17%, Auto up by 0.11% and TECk up by 0.05%. While, Metal down by 0.58%, Realty down by 0.57%, CG down by 0.57%, Bankex down by 0.55% and Power down by 0.29% were the top losers on the index.

The top gainers on the Sensex were M&M up by 1.74%, Bharti Airtel up by 1.21%, RIL up by 1.11%, GAIL up by 0.53% and HUL up by 0.41%.

On the flip side, Jindal Steel was down by 2.31%, L&T was down by 0.94%, Hindalco was down by 0.86%, Sterlite Industries was down by 0.76% and Tata Motors was down by 0.75% were the top losers on the Sensex.

Meanwhile, amid ailing economic health and inflation, the Reserve Bank of India’s annual report has revealed that the net financial savings of the country is badly affected.  Net financial savings is constituted of three sources like household savings, government savings and corporate profits.

Inflation has resulted in sharp decline in small savings and lower growth in typical Indian households’ holdings of deposits, currency and life insurance funds, which in turn has affected country’s savings. Slowing economy has also tightened corporate profits and also affected government’s fiscal condition with less room to save further.

RBI’s report reveals that the change in consumer behavior and more investment flow to assets like gold which give high returns is also a major concern for low bank deposit growth. The central bank also noted that in the past 11 years, gold has given compounded annual return of 18.5%, emphasizing the worrying trend.

The S&P CNX Nifty opened at 5,387.85; about 1 point higher compared to its previous closing of 5,386.70, and has touched a high and a low of 5,399.15 and 5,378.50 respectively.

The index is currently trading at 5,378.60, down by 8.10 points or 0.15%. There were 11 stocks advancing against 39 declines on the index.

The top gainers of the Nifty were M&M up by 1.73%, Bharti Airtel up by 1.13%, RIL up by 1.13%, GAIL up by 0.94% and Ambuja Cement up by 0.76%.

On the flip side, Jindal Steel down by 2.28%, DLF down by 1.47%, Axis Bank down by 1.16%, Coal India down by 1.14% and JP Associates down by 1.06%, were the major losers on the index.

Asian markets were trading mostly in the red, Shanghai Composite was down by 20.98 points or 1.00% to 2,071.13, Hang Seng was marginally down by 16.76 points or 0.08% to 19,863.27, Straits Times was lower by 3.43 points or 0.12% to 3,046.86, Kospi Composite was down by 4.86 points or 0.25% to 1,914.77 and Taiwan Weighted has lost 8.06 points or 0.11% to 7,469.20.

On the other hand, KLSE Composite was up by 1.13 points or 0.07% to 1,649.34, Nikkei 225 has gained 30.46 points or 0.34% to 9,101.22.