Benchmarks continue lackadaisical trade below neutral line

Indian equities continued lackadaisical trade below neutral line in the late morning session. The Asian markets were trading mostly in the red at this point of time on concern that talks among European leaders to resolve the region’s debt crisis are not getting any headway. Also, there was report of decline in optimism in Chinese manufacturers and retailers, putting additional pressure on the regional indices. Back home, traders were seen piling up position in Power, Realty and CG sector, while selling was witnessed in FMCG, IT and TECk sector. NTPC, BHEL, Power Grid Corp, Tata Power, Reliance Infra, Siemens and Reliance Power from Power pack were seen trading in green edging the markets higher. DLF, Unitech, HDIL, Oberoi Realty, Indiabulls Real Estate, Sobha Developers and Godrej Properties from Realty pack were seen trading firm in green. FMCG majors - ITC, Hindustan Unilever, Colgate Palmolive, Crompton Greaves and Dabur India were capping the markets’ gains while IT majors Infosys, Unitech, TCS, Wipro and HCL Tech too were pressurizing the markets.

Meanwhile, the sentiments remained choppy after international rating agency Standard & Poor’s cut India’s GDP forecast to 5.5%. Earlier, Indian rating agency CRISIL too had slashed its forecast for the country's GDP growth to 5.5% from 6.5% earlier for this fiscal. HSBC has also cut growth forecast for fiscal 2012-2013.

In the scrip specific development, Hero MotoCorp rose on mulling extending financing facilities to retail customers. CTIL gained on receiving approval to acquire 51% stake in Doctors time Health Service. Syndicate Bank jumped on entering into distribution tie-up with UTI Mutual Fund. Micro Technologies surged on innovating and integrating turnstiles with access control. Jai Balaji Industries jumped on getting CDR approval. S Mobility edged higher on plan to transfer handset business to S Mobile Devices. IVRCL gained on bagging multiple orders to the worth of Rs 959.04 crore.

The NSE Nifty and BSE Sensex were managing to hold their psychological 5650 and 18,700 levels respectively. The market breadth on BSE was positive, in the ratio of 1506:693.

The BSE Sensex is currently trading at 18709.41 down by 43.42 points or 0.23% after touching a high of 18811.13 and low of 18687.60. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.00% and Small cap index was up by 1.10%.

On the BSE sectoral space, Power up by 2.61%, Realty up by 1.76%, CG up by 1.04%, CD up by 0.86% and Auto down by 0.80% were the gainers. While FMCG down by 1.55%, IT down by 0.57%, TECk down by 0.47% and Oil & Gas down by 0.40% and HC down by 0.06% were the losers on the index.

The top gainers on the Sensex were BHEL up by 6.16%, Jindal Steel up by 4.27%, Tata Power up by 3.80%, Maruti Suzuki up by 2.34% and Mahindra & Mahindra up by 2.13%. On the flip side, ITC down by 2.25%, Hindustan Unilever down by 2.18%, Gail India down by 1.57%, TCS down by 1.52% and HDFC down by 0.86% were the losers on the Sensex.

Meanwhile, notwithstanding the series of reforms the government announced in the past two weeks, rating agency Standard & Poor's (S&P) today scaled down India's GDP growth forecast to 5.5%. The S&P forecast is part of a broader report on Asian economies, where the agency also slashed China’s gross domestic product (GDP) growth forecast to 7.5% from 8% and Japan’s to 2% from 2.5%. The rating agency, which has added to the spate of downgrades from global investment banks and rating agencies, in April, had lowered its outlook on India's sovereign rating of `BBB-' to negative.

Besides, slew of rating agency and global investment banks slashing its outlook on India’s GDP growth, Prime Minister's Economic Advisory Council (PMEAC) foreseeing global headwinds, sluggish policymaking, high interest rates and worries about a drought in parts of the country suppressing investment and demand, also slashed its economic growth projections for the current fiscal to 6.7% from an earlier 7.5-8%. Further, India’s plan panel also lowered annual average economic growth rate to 8.2% in the 12th Five Year Plan (2012-17) from earlier average economic growth rate of 9% due to lower economic growth and lack of appropriate policy measures.

However, driven by higher-than-expected performance on the agriculture front, India’s GDP grew at 5.5 per cent in the June 2012 quarter after declining in eight consecutive quarters. Agriculture emerged as the only saving grace for the sagging economy, which witnessed a near-stalling of industrial activity. Agriculture came in at better than expected at 2.9 per cent, as against major economists’ estimates at 2 percent. 

The S&P CNX Nifty is currently trading at 5,683.30, down by 7.85 points or 0.14% after trading in a range of 5,709.85 and 5,671.50. There were 25 stocks advancing against 25 declines on the index.

The top gainers of the Nifty were BHEL up by 5.59%, Jindal Steel up by 3.91%, Tata Power up by 3.70%, Reliance Infra up by 3.41% and Maruti by 2.37%. On the flip side, ITC by 2.52%, Hindustan Unilever down by 2.49%, HCL Tech down by 1.98%, TCS down by 1.50% and HDFC down by 1.05% were the losers on the index.

Most of the Asian indices were trading in red; Nikkei 225 down by 0.61%, Hang Seng index down by 0.05%, Shanghai Composite down by 0.06%, Straits Times down by 0.17% and Kospi Composite Index down by 0.02%, KLSE Composite down by 082% and Jakarta Composite down by 0.77% while Taiwan Weighted up 0.05% was only the gainer.