Indian equities pare gains to trade below neutral line

Indian equities pared gains to continue its weak trade below neutral line in the late afternoon session on the back of selling in frontline counters and taking cues from subdued European counterparts. The market traded in green for most of the time from early morning but the benchmark index BSE after scaling three and half week high slipped into negative terrain. Traders were seen piling some position in Realty, Health Care and Bankex sector while selling was witnessed in Auto, Capital Goods and Oil & Gas sector. In the scrip specific development, Maruti Suzuki India was trading in red on reports that the workers are planning a hunger strike and other peaceful protests to force the management to take back the 548 employees sacked after the deadly violence in July that hit production. Mastek is locked in upper circuit limit on reports that the company has agreed to buyback share at a price up to Rs 175 per share. Kingfisher Airline is locked in lower circuit limit for second straight day on news that if the ailing carrier fails to provide a turnaround plan by end of December its license may be cancelled.

On the global front, most Asian markets were trading in red barring Kospi Composite and Taiwan Weighted while the European markets were trading on optimistic note. Greece’s Prime Minister has warned that the country could be forced out of the euro zone if the debt-laden country’s parliament does not approve a new round of austerity measures in a vote scheduled on Nov 7. Greece’s parliament is due to vote on a package of more than 13 billion euros in spending cuts, tax hikes and other reforms. Greece must approve the package and its 2013 budget to receive aid from the European Union and the International Monetary Fund. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,750 and 18,800 levels respectively. The market breadth on BSE was negative in the ratio of 1328:1349 while 140 scrips remain unchanged.

The BSE Sensex is currently trading at 18,742.75, down by 20.12 points or 0.11% after trading in a range of 18,813.03 and 18,727.09. There were 10 stocks advancing against 20 declines on the index.

The broader indices added some traction; the BSE Mid cap and Small cap indices were trading higher by 0.36% and 0.19% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 0.98%, Health Care (HC) up by 0.60%, Bankex up by 0.23%, Power up by 0.20% and Information Technology (IT) up by 0.09%. While, Auto down by 0.90%, Capital Goods (CG) down by 0.53%, Oil & Gas down by 0.50%, Metal down by 0.43% and Consumer Durables down by 0.13% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 3.43%, HDFC up by 1.44%, Jindal Steel up by 1.30%, GAIL India up by 0.94% and SBI up by 0.84%.

On the flip side, Hindalco Industries down by 2.18%, Maruti Suzuki down by 1.91%, Tata Motors down by 1.30%, L&T down by 0.94% and Bajaj Auto down by 0.93% were the top losers on the Sensex.

Meanwhile, amid slowing economy with sluggish investments and industrial growth, the Finance Ministry might scale down the financial growth forecasts to 5.7-6% in its mid-term review of the state of economy to be tabled in Parliament by December.

The Reserve Bank of India (RBI), in its half yearly review of the monetary policy, had lowered the financial growth projection of the country to 5.8%, from the previous forecast of 6.5%, albeit in 2012-13 budget the envisaged estimate was 7.6% growth. The RBI had blamed global and domestic factors like poor investments and subdued demand for the scale down.

Even though, the first quarter of the current financial year has registered a sluggish economic growth of 5.5%, the Planning Commission officials has expressed confidence that the economy is likely to pick up growth in the second half of 2012-13. The financial growth had slipped to nine-year low of 6.5% in 2011-12.

It is also likely to revise the fiscal deficit target, which was pegged at 5.1% of the Gross Domestic Product (GDP) in the financial budget 2012-13. The Finance Ministry had revised the fiscal deficit projection to 5.3%, considering various adverse global and domestic developments, though various global rating agencies opined that it is likely to peak to 6.1%. The panel will also consider various measures to improve the Current Account Deficit (CAD) situation. While, Chidambaram has stressed that it could improve to 3.5% of the GDP in the current fiscal, from 4.2% a year ago.

The review will also consider the peaking inflation, considering current price situation amid global and domestic factors, including the impact of monsoon on crops. RBI had recently revised the March-end inflation estimate to 7.5%, from previous projected 7%. Amid continuing attempts to promote investments to contain inflation and take India to high growth trajectory, Chidambaram last week had come up with a five-year road map for fiscal consolidation.

The S&P CNX Nifty is currently trading at 5,701.55, down by 2.65 points or 0.05% after trading in a range of 5,721.30 and 5,693.65. There were 25 stocks advancing against 25 declines on the index.

The top gainers of the Nifty were Cipla up by 3.51%, Asian Paints up by 3.22%, Power Grid up by 2.01%, Ambuja Cement up by 1.74% and Jindal Steel up by 1.46%.

On the flip side, IDFC down by 2.37%, Reliance Infrastructure down by 2.12%, Hindalco down by 2.01%, Maruti Suzuki down by 1.92% and Tata Motors down by 1.35%, were the major losers on the index.

Most of the Asian equity indices were trading in the red barring Kospi Composite which surged 1.05% and Taiwan Weighted advanced 0.71% while Jakarta Composite slipped 0.10%, Straits Times declined by 0.34%, KLSE Composite lost 0.66%, Hang Seng edged lower by 0.28%, Shanghai Composite descended 0.38% and Nikkei 225 was trading lower by 0.36%.

The European markets were trading in green with, France’s CAC 40 gained 0.26%, Germany’s DAX added 0.02% and the United Kingdom’s FTSE 100 ascended 0.10%.