Domestic bourses trade flat ahead of US presidential election

Indian benchmarks have made a muted start on Tuesday racking subdued global cues as traders remained cautious ahead of the Presidential Election as Opinion polls indicated a neck-to-neck fight between President Barack Obama and Republican challenger Mitt Romney. Most of the Asian equity indices were trading in the red at this point of time as there was cautiousness across the region ahead of the US presidential election and China’s once-in-a-decade leadership change later this week, which is likely to see in the selection of Xi Jinping to succeed President Hu Jintao. Meanwhile, Chinese and Japanese officials had met to discuss a territorial dispute that has damaged relations between Asia’s two biggest economies.

Back home, key domestic bourses, despite the subdued global cues, were trading above their pre-close level on some consoling news for the rate sensitives’ as the Reserve Bank of India governor Duvvuri Subbarao has said that he may go for easing monetary policy as early as January. Also, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said that the government is taking several steps to boost investor confidence and more such measures may follow. Sentiments also lifted after Cipla reported stronger-than-expected second quarter result. The company has reported 61.83% rise in its net profit at Rs 500.01 crore as compared to Rs 308.97 crore for the same quarter in the previous year.

On the sectoral front, software witnessed the maximum gain in trade followed by technology and healthcare while, auto, oil and gas and capital goods remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 954 shares on the gaining side against 679 shares on the losing side while 84 shares remain unchanged.

The BSE Sensex opened at 18,739.97; about 23 points lower compared to its previous closing of 18,762.87, and has touched a high and a low of 18,810.96 and 18,739.82 respectively.

The index is currently trading at 18,768.09, up by 5.22 points or 0.03%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a positive start with 55.56% stocks advancing against 39.55% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.36% and 0.20% respectively.

The top gaining sectoral indices on the BSE were, IT up by 0.68%, TECk up by 0.59%, HC up by 0.56%, Realty up by 0.55% and CD up by 0.49%. While, Auto down by 0.65%, Oil and Gas down by 0.26%, CG down by 0.09% and Bankex down by 0.07% were the few losers on the index.

The top gainers on the Sensex were Cipla up by 2.52%, GAIL up by 1.35%, Jindal Steel up by 1.34%, Infosys up by 1.06% and NTPC up by 0.72%.

On the flip side, Maruti Suzuki was down by 2.08%, Hero MotoCorp was down by 1.31%, Hindalco was down by 1.05%, Tata Motors was down by 0.98% and RIL was down by 0.71% were the top losers on the Sensex.

Meanwhile, amid peaking inflation rate in line with global financial ill health, Finance Minister P Chidambaram has expressed optimism to attain 5.5% to 6.0% financial growth this fiscal, while expecting it to return to 7% growth by 2013 and 8% by 2014-15.

Last month, the International Monetary Fund had scaled down India’s economic growth estimate for 2012-13 to 4.9% from 6.1% previous year. Chidambaram also expressed his concerns over the inflation rate, which had hit a 10-month high of 7.8% in September.

Reserve Bank of India had left interest rates unchanged at 8% last week, without considering government’s pressure to lower rates for the first time since April. While, the central bank had trimmed India’s GDP growth forecast to 5.8% from previous 6.5%. It also scaled up its inflation projection in March to 7.5% from a previous 7%.

However, Chidambaram emphasized that a combination of effective monetary policy, spending cuts, and a tightening of tax collection is necessary to pare the fiscal deficit and to trigger growth. He also denied the chance for India to face a credit rating downgrade, after the rating agency Standard & Poor's recent comments that the nation holds one third chance to be rated to junk over the next two years.

The S&P CNX Nifty opened at 5,694.10; about 10 points lower compared to its previous closing of 5,704.20, and has touched a high and a low of 5,715.90 and 5,693.65 respectively.

The index is currently trading at 5,705.45, up by 1.25 points or 0.02%. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were Cipla up by 2.71%, Jindal Steel up by 1.56%, GAIL up by 1.40%, Ambuja Cement up by 1.33% and Power Grid up by 1.15%.

On the flip side, Maruti down by 2.12%, IDFC down by 1.80%, Hero MotoCorp down by 1.22%, Tata Motors down by 1.11% and RIL down by 0.97%, were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite plunged by 29.84 points or 1.41% to 2,084.19, Hang Seng lost 164.39 points or 0.75% to 21,842.01, KLSE Composite was down by 8.71 points or 0.53% to 1,645.17, Nikkei 225 lost 41.31 points or 0.46% to 8,966.13, Straits Times declined by 8.27 points or 0.28% to 3,022.23 and Jakarta Composite was down by 1.93 points or 0.04% to 4,301.01.

On the other hand, Taiwan Weighted rose 23.14 points or 0.32% to 7,208.50 and Kospi Composite was up by 4.33 points or 0.23% to 1,912.52.