Bourses recover from intra-day’s low; oscillate in proximity of neutral line

Recovery came to the Indian equity markets at intra-days low level, as bourses after entering into the red zone, trimmed substantial losses to trade near neutral line. Firm support emerged from Public Sector Undertaking, Power and Fast Moving Consumer Goods counters, which mainly aided benchmarks into cutting short losses. However, stocks from Oil & Gas and Metal counters, nudging lower capped the upside of the bourses. Even after the negative European counterparts start, 30 share barometer index of Bombay Stock Exchange (BSE), Sensex, was trading above 18500 mark, while the widely followed index of National Stock Exchange (NSE), Nifty,  trading above the crucial 5600 mark, appeared on the verge of breaking out in green. Conversely, broader indices, showcasing different trend, added some more traction in comparison to their early deals.

On the global front, Asian shares were reeling under pressure as markets paused from sharp gains inspired by the Federal Reserve's aggressive stimulus and turned instead to concerns about the growth slowdown in China. Meanwhile, European shares too nudged lower as investors continued to consolidate recent gains, with worries about Spain simmering in the background. Qualms about growth were back in focus on Monday following a weak Empire State manufacturing reading for September. The index fell to, -10.410--the lowest level since November 2010, compared with expectations for a reading of zero.

Closer home, the BSE Sensex is currently trading at 18,533.48, down by 8.83 points or 0.05% afte touching a high of 18580.48 and low of 18480.96. There were 13 stocks advancing against 16 declines while one stock remained unchanged on the index.

The broader indices added traction; the BSE Mid cap index was up by 0.95% and Small cap index was up by 0.77%.

The top gainers on the BSE sectoral space were, PSU up by 1.10%, Power up by 0.99%, FMCG up by 0.81%, Capital Goods up by 0.71% and Bankex up by 0.57%. While Oil & Gas down by 0.77% and Metal down by 0.10% were only losers on the sectoral space.

The top gainers on the Sensex were BHEL up by 2.84%, SBI up by 2.40%, GAIL India up by 2.22%, Jindal Steel up by 2.15% and Infosys up by 1.97%. On the flip side, Wipro down by 3.11%, HDFC down by 2.16%, TCS down by 1.92%, Reliance Industries down by 1.68% and Hindalco Industries down by 1.36% were major losers on the Sensex. 

Meanwhile, driven by the rise in food inflation, annual rate of inflation, based on the consumer prices index (CPI) in India, creeping higher in the month of August, entered double digit figure of 10.03 percent. Food inflation in the CPI accelerated to 12.03 percent in August from 11.53 percent in August. According to the data released by Central Statistics Office, provisional annual inflation rate based on all India general CPI (Combined) for August 2012 on point to point basis stood at 10.03 percent as compared to 9.86 percent for the previous month of July 2012. However, July consumer price inflation was revised lower to 9.76 percent from 9.86 percent earlier.

According to the Ministry of Statistics and Programme Implementation, which released the monthly provisional CPI on Base 2010=100 along with annual inflation rates for August 2012, all India provisional General (all groups), CPI numbers of August 2012 for rural, urban and combined were at 124.3, 121.11 and 122.9 respectively. The corresponding inflation rates for rural and urban areas for August came in at 9.90 percent and 10.19 percent respectively as against July’s  9.76 percent and 10.10 percent, respectively, which indicated that the rate of price rise rose in both in rural and urban areas.

India has the highest retail inflation among the BRICS group of emerging economies - Brazil, Russia, China, and South Africa -- and is way above the Reserve Bank of India (RBI)’s comfort level. However, unlike most central banks, the RBI uses wholesale inflation in its policy formulation, as annual consumer price inflation data was only launched this year in January.

Driven by higher food prices due to deficient monsoon, the wholesale price index (WPI), India's main inflation gauge, shockingly rose at 7.55% for the month of August, as compared to 6.87% (Provisional) for the previous month and 9.78% during the corresponding month of the previous year. Meanwhile, furthering its anti-inflationary stance, the RBI, in its mid-quarter monetary policy review, leaving the key policy rates, viz. repo and reverse repo rate unchanged, only slashed cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.75 per cent to 4.50 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning September 22, 2012.

The S&P CNX Nifty is currently trading at 5,609.80, down by 0.20 points after trading in a range of 5,620.55 and 5,586.45. There were 28 stocks advancing against 22 declining one’s on the index.

The top gainers of the Nifty were PNB up by 5.05%, BHEL up by 2.90%, SBI up by 2.47%, Jindal Steel up by 2.38% and IDFC up by 2.24%. On the flip side, Wipro down by 3.38%, Cairn India down by 3.03%, HDFC down by 2.23%, TCS down 2.10% and Kotak Bank down by 2.05% were top losers on the index.

Most of the Asian indices were reeling under pressure, barring Seoul Composite which edged higher by 0.13%, Nikkei 225 declined 0.39%, Jakarta Composite lost 0.44%, Hang Seng slipped by 0.17%, Taiwan Weighted surrendered 0.36%, Shanghai Composite plunged 1.01% and Straits Times lost 0.23%, while KLSE Composite was trading flat with negative bias.

European too go off to a red start; with CAC 40 trading lower by 0.53%, DAX losing 0.11% and FTSE100 slipping by 0.45%.