Markets retreat early gains amid lackluster trade

After a lower opening and a subsequent up move, Indian equity markets retreated again in the late morning session amid alternate bouts of buying and selling. Investor’s lackluster moves along with quarterly results are dictating the trend for the market. The 30-share BSE benchmark fell over 25 points, while 50-share NSE benchmark was down by 8.80 points due to lack of trigger from both domestic and global markets. In currency markets, rupee recovered against dollar on last trading session of the week amid dollar selling by exporters and banks. On sectoral front, auto, power and metal stocks were a bit steady. Select stocks from FMCG and consumer durables sectors too moved higher, while oil, IT and PSU sectors were trading in red. Meanwhile, United Spirits trading with huge gains on reports that the UB Group-Diageo has agreed on financial and management contours and they may announce deal of stake sale soon. In global markets, Asian shares fell further on Friday, weighed down by worries over the risk of a looming fiscal crisis in the world's largest economy. Back home, the market breadth favoring positive trend; there were 1,204 shares on the gaining side against 1,178 shares on the losing side while 122 shares remain unchanged.

The BSE Sensex currently trading at 18,820.71, down by 25.55 points or 0.14% after touching a high and a low of 18,894.42 and 18,812.36 respectively. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading mixed; the BSE Mid cap was down by 0.04% and Small cap up by 0.26%.

The top gaining sectoral indices on the BSE were, FMCG up by 0.33%, Metal up by 0.27%, Power up by 0.24%, Auto up by 0.08% and CD up by 0.06% while, Oil & Gas down by 0.57%, IT down by 0.54%, PSU down 0.41%, TECk down by 0.39% and CG down by 0.32% were the only losers on the index.

The top gainers on the Sensex were Tata Power up by 1.13%, Jindal Steel up by 1.04%, Hindalco up by 0.97%, Bajaj Auto up by 0.79% and Tata Steel up by 0.77%.

On the flip side, ONGC was down by 2.30%, Sterlite Industries was down by 1.02%, Hero MotoCorp down by 0.89%, Infosys was down by 0.86% and ICICI Bank down by 0.73% were the top losers on the Sensex.

Meanwhile, in conjunction with various measures to rejuvenate the economic growth of the nation, the Economic affairs secretary Arvind Mayaram, has confirmed that the Centre is planning to curb the fiscal deficit to 5.3% this financial year. The plans to rein in deficit to 5.3% emerged on optimism that it can raise more fund through selling stocks of top state-run companies and by curtailing unwanted expenditures.

The peaking fiscal deficit was concerning the government after the stock sales in state-run units had failed to takeoff as expected, while direct taxes mop up continue to be modest and as revenue from 2G spectrum auctions may be much below estimated Rs 30,000 crore. However, Mayaram has expressed confidence that the aggressive measures to contain fiscal deficit will see desired results.

In the budget for this financial year, the government had projected fiscal deficit of 5.1%. Fiscal deficit is the gap between government revenues and expenses that is met through the borrowings. Mayaram also pointed out that, with this directive the centre might also pare down subsidies on food, fertilizers and oil products given out annually in cash and kind. The centre might also have to borrow an additional Rs 20,000 crore, from the envisaged Rs 570,000 crore borrowings to attain 5.3% in deficit.

During April-October 2012, fiscal deficit has registered to Rs 3.37 crore that translates to 65.6%, while direct taxes collection marked 6.9% growth at Rs 3.02 lakh crore. Mayaram’s proposal on disinvestment programme has come up after the centre had deferred on 12.5% stake sale in Nalco and had postponed it reasoning performance related issues. While the Centre has decided to push on disinvestment of stocks in companies like Oil India, MMTC, Hindustan Copper, SAIL and NMDC to mobilize targeted non-tax revenue of Rs 30,000 crore.

The S&P CNX Nifty is currently trading at 5,729.95, down by 8.80 points or 0.15% after trading in a range of 5,751.70 and 5,727.55. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were Ultratech Cement up by 1.38%, Hindalco up by 0.92%, Jindal Steel up by 0.89%, Power Grid up by 0.88% and Bajaj Auto up by 0.86%.

On the flip side, ONGC down by 2.30%, Sesa Goa down by 1.32%, Infosys down by 0.97%, Hero MotoCorp down by 0.94% and HCL Tech down by 0.90%, were the major losers on the index.

Most Asian equity indices were trading in the red; Kospi Composite  down by 0.52%, Jakarta Composite  down by 0.22%, Straits Times  down by 0.21%, KLSE Composite down by 0.17%, Hang Seng  down by 0.60%, Nikkei 225 down by 0.90%, Shanghai Composite was down by 0.24%, while Taiwan Weighted up by 0.70% was the lone gainer.