Domestic bourses trade flat ahead of September PMI data

Domestic equity indices have made a flat start and were trading near its pre-close level after a rally of about a percent on Friday amid weak global cues. The US markets closed lower on Friday, though the economic news remain mixed but the concerns of the Europe debt crisis led the markets lower while, most of the Asian equity indices were trading in the red on the back of downbeat data on China’s manufacturing sector. Economic reports from Japan and South Korea too were disappointing.  Back home, marketmen are closely watching the Purchasing Managers Index (PMI) data and monthly auto volumes to be published later in the day for cues on the economy. Also, the Shome panel is due to submit its report on GAAR later in the day. Meanwhile, there was some buzz on the Kelkar Committee report, which was submitted after the market hours last weekend, the Kelkar report painted a grim picture on the fiscal deficit front and said that unless immediate correctives, such as a drastic cut in the subsidy bill are effected, the fiscal deficit would mount to an unmanageable 6.1 per cent of GDP in 2012-13.

Capital goods and oil and gas indices were the top losers so far in the session while software and technology indices were among the noteworthy leaders. Consumer durables, healthcare and auto indices were also in the positive territory. Moreover, the broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,038 shares on the gaining side against 471 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex opened at 18784.64; about 24 points higher compared to its previous closing of 18762.74, and has touched a high and a low of 18822.15 and 18759.19 respectively.

The index is currently trading at 18790.21, up by 27.47 points or 0.15%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a positive start with 66.03% stocks advancing against 29.96% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.88% and 0.83% respectively.

The top gaining sectoral indices on the BSE were, IT up by 1.53%, TECk up by 1.19%, CD up by 0.83%, HC up by 0.76% and Auto up by 0.49%. While, CG down by 0.14%, Oil and Gas down by 0.13%, Metal down by 0.12%, Power down by 0.10% and Bankex down by 0.05% were the top losers on the index.

The top gainers on the Sensex were Infosys up by 2.17%, Sun Pharma up by 1.04%, TCS up by 0.99%, Tata Motors up by 0.77% and Cipla up by 0.76%.

On the flip side, Tata Power was down by 0.75%, HDFC was down by 0.70%, ONGC was down by 0.64%, Tata Steel was down by 0.54% and ICICI Bank was down by 0.50% were the top losers on the Sensex.

Meanwhile, amid continuing battle against oppositions for the reform measures taken, the government has been provided with panacea from Kelkar Committee, who has been tasked to chart a roadmap for fiscal consolidation, and as per which the government has to take out half of the per unit diesel subsidy by the end of this fiscal and the rest over 2013-14, trim down subsidy on cooking gas by 25% this year and completely eliminated over the next two years. It has suggested hiking kerosene and urea prices regularly and switch to direct transfer of cash subsidies for the poor.

The panel also urged the centre to improve tax mobilization, trim plan expenses and focus more on disinvestment of state-run firms. It warned that the slow approach to this will cause huge mounting of fiscal deficit for the nation, leading sovereign credit downgrade and curtail foreign capital investments. The committee also cautioned that the deficit for the current fiscal can widen to 6.1% of the GDP against the budgeted 5.1%, also confirmed that the practice of suggestions put forth will ensure that the deficit will stick to 5.2% of the GDP, even though government does not seem to agree with the grim prognosis.

However,  Arvind Mayaram, Department of Economic Affairs Secretary pointed out that the proposals by the committee differ to the objective of the government, which focuses more on sustained and inclusive growth. In a developing country like India, where a significant proportion of the population is poor, a significant portion of subsidies is unavoidable, and measures must be taken to protect the poor and vulnerable sections of the society, he added.

The S&P CNX Nifty opened at 5,704.75; about a point higher compared to its previous closing of 5,703.30, and has touched a high and a low of 5,715.60 and 5,696.00 respectively.

The index is currently trading at 5,707.25, up by 3.95 points or 0.07%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were Ambuja Cement up by 2.60%, Infosys up by 2.07%, Tata Motors up by 1.85%, Ultratech Cement up by 1.58% and JP Associates up by 1.16%.

On the flip side, Tata Power down by 0.94%, Hindalco down by 0.91%, ONGC down by 0.87%, HDFC down by 0.78% and Power Grid down by 0.75%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Jakarta Composite was down by 40.71 points or 0.95% to 4,220.52, Nikkei 225 lost 73.34 points or 0.83% to 8,796.82, Straits Times declined by 13.16 points or 0.44% to 3,046.95 and Taiwan Weighted was lower by 43.47 points or 0.56% to 7,672.57. On the flip side, KLSE Composite was up by 2.75 points or 0.17% to 1,639.41.

Markets in China, Hong Kong and South Korea are closed today for holidays.