Markets erase some early gains; Nifty flat in green zone

Following a bright start and a subsequent retreat from higher levels, Indian equity markets shed some more gains and currently trading absolutely flat in positive bias. The 30-share BSE Sensex rose 50.33 points, while 50-share NSE Nifty moved up 16.55 points. In currency markets, rupee strengthened against US currency on Tuesday amid sustained dollar selling by exporters and banks. Meanwhile, Reserve Bank of India’s Deputy Governor Subir Gokarn statement on Nov 19 that central bank will intervene in the foreign exchange market to check any sharp fall in the rupee also improved investor’s sentiments. On sectoral front, FMCG, power, automobile and metal stocks were finding some support, while stocks from information technology, oil, healthcare and banking sectors were mostly subdued. In global markets, most Asian shares rose again on Tuesday anticipating a resolution for the US fiscal cliff. Back home, the market breadth favoring positive trend; there were 1,217 shares on the gaining side against 1,164 shares on the losing side while 124 shares remain unchanged.

The BSE Sensex is currently trading at 18,389.33, up by 50.33 points or 0.27%. There were 18 stocks advancing against only 10 declines while 2 remain unchanged on the index.

The broader indices were also trading with green mark; the BSE Mid cap and Small cap indices rose 0.19% and 0.19% respectively.

The top gaining sectoral index on the BSE were FMCG up by 0.64%, Auto up by 0.41%, Power up by 0.40%, Realty up by 0.22%, Metal up by 0.21%. While, IT down by 0.58%, TECk down by 0.42%, CD down by 0.08%, Oil & Gas down by 0.06% and HC down by 0.04% were top losers on the index.

The top gainers on the Sensex were HDFC up by 2.46%, Mahindra & Mahindra up by 1.51%, GAIL up by 1.31%, Tata Power up by 1.09% and Wipro up by 1.05%. While, Infosys down by 1.69%, Sun Pharma down by 1.13%, Hero MotoCorp down by 0.88%, Bajaj Auto down by 0.62% and SBI down by 0.33% were the top losers on the Sensex.

Meanwhile, the government will make all efforts to restrict fiscal deficit to 5.3 per cent of gross domestic product (GDP) for the current financial year, Prime Minister’s Economic Advisory Council (PMEAC) Chairman C. Rangarajan reported. The government initially pegged fiscal deficit for the current financial year at 5.1% of the GDP in the budget, which later got revised to 5.3% in view of subdued revenue collection and rising fuel and food subsidy bills.

The PMEAC chief's comments assumes significance since this comes in the backdrop of lukewarm response to the 2G spectrum auction which could garner the government only Rs 9,407 crore as against the target of Rs 40,000 crore. However, the government intends to go in for another round of spectrum auction before end of the current fiscal, which will be before March 31, 2013.

On depreciation of the rupee, Rangarajan underscored that the capital inflows during the current year would be adequate to cover the Current Account Deficit (CAD). Further, he expects rupee to stay around this particular range (Rs 54-55 a dollar) even by the end of this year. Off lately, Investor’s friendly, Finance Minister P Chidambaram exuded confidence that CAD will come down to 3.7% of GDP in 2012-13. In 2011-12, CAD touched a 30-year high of 4.2% of the GDP or $78 billion.

Further, on key policy rates, former RBI Governor Rangarajan, highlighted that RBI needs to watch the behavior of prices for some more time. He added that, of course, RBI will take all factors into account, but there is still some time for Reserve Bank to take a decision.

The S&P CNX Nifty is currently trading at 5,587.95, higher by 16.55 points or 0.30%. There were 29 stocks advancing against 21 stock declines on the index.

The top gainers of the Nifty were HDFC up by 2.63%, M&M up by 1.66%, PowerGrid up by 1.54%, IDFC up by 1.49% and GAIL up by 1.39%. On the flip side, Infosys down by 1.66%, HCL Tech down by 1.32%, Sun Pharma down by 1.08%, Hero MotoCorp down by 0.95% and Cairn down by 0.85% remained top losers on the index.

Most of  the Asian equity indices were trading in the green; Hang Seng up by 0.69%, Straits Times was up by 0.48%, Kospi Composite up by 0.70%, KLSE Composite was up by 0.14, Taiwan Weighted up by 0.23%, were the gainers amongst Asian pack.

On the flip side, Nikkei 225 down by 0.09%, Shanghai Composite declined 0.43%, Jakarta Composite down by 0.12% were trading in red.