Benchmarks trade flat on F&O series expiry

Key benchmarks have made a flat opening as investors remained on the sidelines in early deals as September derivative contracts will expire today. The market breadth is positive as broader indices continue their recent out-performance of the frontline indices. The undertone is also partly supported by steady inflow of overseas portfolio capital. On the global front, US markets closed in the red on Wednesday as protests in Spain and Greece over euro zone austerity measures raised fresh concerns over Europe's ability to get its debt crisis under control. However, the Asian markets were trading mostly in the green with Chinese market taking the lead as decline in industrial profits has again raised speculation that its central bank will take measures to support economic growth.

Back home, the sentiments got some support after India made it mandatory for all foreigners to furnish a tax residency certificate of their home country to claim benefits under the double taxation avoidance agreement. However, the gains remain capped as ratings agency Moody’s Investors Service expects India’s fiscal deficit to exceed 5.1% despite the recent moves by the government to rein in deficit and has said that the recent reform measures won't improve India's credit profile and only serve as sentiment boosters, as the country is still constrained by its fiscal deficit. Traders will also be eyeing for some global cues after the opening of the European markets, as uncertainty over Spain bailout has dented sentiment.

On the sectoral front, auto witnessed the maximum gain in trade followed by capital goods and fast moving consumer goods while, software, power and oil and gas remained the top losers on the BSE sectoral space. Meanwhile, FMCG stocks surged on favourable outlook for Rabi or winter crops due to the moisture available in the soil following wide-spread rains in August and September while, cement stocks, viz. ACC, UltraTech Cement and Prism Cement, firmed up on optimism of higher demand as monsoon season comes to an end. The overall market breadth has made a positive start; there were 1,095 shares on the gaining side against 552 shares on the losing side while 78 shares remain unchanged.

The BSE Sensex opened at 18,659.75; about 27 points higher compared to its previous closing of 18,632.17, and has touched a high and a low of 18,711.62 and 18,644.77 respectively.

The index is currently trading at 18,648.32, up by 16.15 points or 0.09%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a positive start with 63.48% stocks advancing against 32.00% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.50% and 0.74% respectively.

The top gaining sectoral indices on the BSE were, Auto up by 1.02%, CG up by 0.29%, FMCG up by 0.19%, HC up by 0.14% and CD up by 0.09%. While, IT down by 0.33%, Power down by 0.28%, Oil and Gas down by 0.25%, Metal down by 0.25% and PSU down by 0.22% were the top losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 1.73%, M&M up by 1.61%, L&T up by 1.34%, Tata Motors up by 1.05% and Bharti Airtel up by 0.98%.

On the flip side, BHEL was down by 1.66%, Coal India was down by 1.38%, Wipro was down by 0.97%, Infosys was down by 0.73% and Cipla was down by 0.63% were the top losers on the Sensex.

Meanwhile, to attain 4% annual growth in the farm sector over the next five years, agri-credit worth Rs 800,000 crore a year would be required, as per the Planning Commission. The estimated credit requirement for the sector is higher than Rs 575,000 crore targeted by the government for the current financial year. Further, the total demand for farm credit in the entire 12th Plan period is projected between Rs 31,24,624 crore and Rs 42,08,454 crore.

The Planning Commission pointing out the problems facing farm credit said, agri-credit continues to overlook certain sub-sectors, the flow of term-lending is retreating and there is massive increase in the share of indirect finance. Further, disappointing credit dispensation by institutions to small and marginal farmers, including by the Cooperative Credit Structure (CCS), which has traditionally catered to smaller farmers.

The Commission also highlighted the need for objective assessment of credit requirement for direct and indirect financials of agriculture and also to re-define the priority lending sectors. It also said that although commercial banks have about 70% share in agri-lending, their rural branches continue to insist on collateral even for small loans, defy regulation. Moreover, delay in stabilization of the business correspondent model and increasingly larger exposures of banks to Non Banking Financial Company (NBFC) for easy compliance with priority lending requirements, is also affecting flow of institutional credit.

Further on the financial health of Long-term Cooperative Credit Structure (LTCCS), the panel said, a quick decision is warranted on the implementation of the revival package for the LTCCS also on the lines of Short-term Cooperative Credit Structure (STCCS).

The S&P CNX Nifty opened at 5,673.75; about 10 points higher compared to its previous closing of 5,663.45 and has touched a high and a low of 5,685.40 and 5,665.10 respectively.

The index is currently trading at 5,670.00, up by 6.55 points or 0.12%. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were HCL Tech up by 2.13%, Maruti Suzuki up by 2.01%, L&T up by 1.51%, ACC up by 1.49% and M&M up by 1.45%.

On the flip side, SAIL down by 1.79%, BHEL down by 1.78%, Coal India down by 1.30%, Wipro down by 0.96% and Infosys down by 0.90%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up by 4.52 points or 0.23% to 2,008.69, Hang Seng gained 92.97 points or 0.45% to 20,620.70, Jakarta Composite added 27.02 points or 0.64% to 4,206.79, KLSE Composite was up by 7.79 points or 0.47% to 1,627.04, Straits Times gained 13.88 points or 0.45% to 3,061.14, Kospi Composite added 3.74 points or 0.19% to 1,984.10 and Taiwan Weighted was higher by 16.90 points or 0.22% to 7,686.63.

On the other hand, Nikkei 225 was the lone loser, marginally down by 3.04 points or 0.03% to 8,903.66.