Benchmark continue weak trade; GDP grew higher than expected at 5.5% in Q1FY13

Indian equities continued weak trade in the late morning session. On the global front, Asian markets were trading mixed with Japanese Nikkei losing the most as the nation’s industrial output unexpectedly fell in July while manufacturing activity in August contracted to the lowest level in 16 months. Back home India's gross domestic product (GDP) grew higher than expected at 5.5% in the first quarter (April-June) of 2012-13 as against the consensus estimates of 5.3%. However, this growth figure has registered sharp decline from the robust 8% growth in the same quarter of the last financial year. As per official data released by the Central Statistics Organization, the economic activities, which registered significant growth in Q1 of 2012-13 over Q1 of 2011-12, are construction at 10.9%, financing, insurance, real estate and business services at 10.8% and community, social and personal services at 7.9%. Further, the estimated growth rates in other economic activities are agriculture, forestry & fishing at 2.9%, mining & quarrying at 0.1%, manufacturing at 0.2% and electricity generation at 6.3% during this period. The traders were seen piling up position in HC and CD sector, while selling was witnessed in Auto, Power and Realty sector. Tata Motors, Mahindra & Mahindra, Bajaj Auto, Hero Moto Corp and Maruti Suzuki from Auto sector were trading in red exerting pressure on the market, while Power majors NTPC, Power Grid Corp, BHEL and Tata Power too were pressurizing the markets. On the other hand, Cipla, Lupin, Ranbaxy Laboratories and Glaxosmithkline Pharmaceuticals from HC pack were seen trading in green edging the markets higher.  Titan Industries, Videocon Industries, Blue Star and Gitanjali Gems from CD pack were seen trading firm in green, holding the markets from dipping further. In the scrip specific development, RCom soared on securing various orders worth Rs 150 crore from Government. Rashtriya Chemicals & Fertilizers jumped on plan for capacity expansion. Religare Enterprises gained as its arm raised stake in Hindustan Tin Works by 2.41%. Den Networks edged higher on reporting a rise of 13.24% in its net profit at Rs 7.87 crore for the year under review as compared to Rs 6.95 crore in the previous year. The NSE Nifty and BSE Sensex were managing to hold their psychological 5250 and 17400 levels respectively. The market breadth on BSE was positive, in the ratio of 979:850.

The BSE Sensex is currently trading at 17464.15 down by 77.49 points or 0.44% after touching a high of 17557.62 and low of 17432.70. There were 6 stocks advancing against 24 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26% and Small cap index was up by 0.51%.

On the BSE sectoral space, HC up by 0.67% and CD up by 0.22% were the only gainers. While, Auto down by 0.93%, Power down by 0.90%, Realty down by 0.81%, PSU down by 0.77%, and Metal down by 0.71% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 2.16%, HDFC up by 0.99%, Bharti Airtel up by 0.93%, Wipro up by 0.53% and ONGC up by 0.09%. On the flip side, Coal India was down by 2.04%, Hindalco Industries  was down by 1.98%, NTPC was down by 1.90%, BHEL was down by 1.39% and Hero Moto Corp  was down by 1.38%, were the top losers on the Sensex.

 Mean while, in a move to get Reserve Bank of India (RBI) and Government on the same page, a Parliamentary panel headed by BJP MP Yashwant Sinha has urged the latter to take immediate steps to supplement and compliment RBI’s initiatives with fiscal measures to rein in inflation and trigger sustainable growth. The parliamentary standing committee on finance, which went deeper due to high inflation and slow down in the Indian economy in the last couple of years in its 27 pages long report that was tabled in Parliament on Thursday, highlighted the visible lack of sync between government and the RBI in tackling the pressing problems of the Indian economy.

Meanwhile, the committee backed Subbarao, saying “Medium to long-term benefits are more important than short-term benefits and that a low and stable inflation is a necessary precondition for achieving India's growth prospects.” Disagreeing with the government contention that monetary tightening was responsible for the growth slowdown, RBI blamed the government in failing to keep its end of the bargain in terms of fiscal policy.

Further, the report on “Current Economic Situation and Policy Options” also recommended that government should come out with a 'well thought-out revival policy' to ensure effective decision making, time bound clearance of projects, more transparent tax regime and enhanced domestic investment.  

The S&P CNX Nifty is currently trading at 5,281.45, down by 33.60 points or 0.63% after trading in a range of 5,300.60 and 5,273.65. There were 8 stocks advancing against 41 declines on the index while one stock remained unchanged.

The top gainers of the Nifty were Cipla up by 2.23%, Bharti Airtel up by 0.93%, HDFC up by 0.81%, Reliance Infra up by 0.75% and Sesa Goa up by 0.70%. On the flip side, Coal India down by 2.52%, IDFC down by 2.49%, NTPC down by 1.95%, Hindalco down by 1.84% and HUL down by 1.63%, were the major losers on the index.

Asian indices were trading on mix note; Nikkei 225 down by 1.30%, Hang Seng index down by 0.31%, Shanghai Composite down by 0.07% and Jakarta Composite down by 0.50% while Kospi Composite Index up by 0.10%, Taiwan Weighted up by 0.28% and Straits Times up by 0.07%, were the gainers. KLSE Composite was closed today on account of Merdeka day holiday.