Benchmarks trade flat in early deals on Friday

After making a positive start, Indian equity benchmarks were trading flat in early morning trades on uncertainty over government’s ability to push through key reforms in the winter session of the Parliament. The winter session of the Parliament commenced yesterday and is expected to conclude on December 20, 2012. On the global front, the US markets remained closed overnight on account of Thanksgiving Day and were unable to give any cues to the other global markets. While, most of the Asian markets were trading marginally in the green on encouraging Chinese manufacturing data, easing tensions in the Middle East and continued hopes that Greece will get its next batch of bailout funds.

Back home, sentiments got some boost from Finance Minister P Chidambaram’s statement that expenditure would be contained for the current financial year. Moreover, telecom stocks too supported the sentiments after Centre on Thursday justified in the Supreme Court the non-auctioning of 900 MHz spectrum in 2G licences, saying that it was not the subject matter of 122 licences which were cancelled pursuant to the February 2 judgment. However, Pharma stocks bore the brunt of profit booking as the Central Government cleared the National Pharmaceutical Pricing Policy that will bring 348 essential drugs under price control, leading to reduction in prices and putting some pressure on the companies with major domestic concentration.

On the sectoral front, oil and gas witnessed the maximum gain in trade followed by technology and consumer durables while, public sector undertaking, banking and realty 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 872 shares on the gaining side against 646 shares on the losing side while 83 shares remain unchanged.

The BSE Sensex opened at 18,543.95; about 26 points higher compared to its previous closing of 18,517.34, and has touched a high and a low of 18,556.50 and 18,493.33 respectively.

The index is currently trading at 18,516.98, down by 0.36 points. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a positive start with 54.47% stocks advancing against 40.35% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.13% and 0.24% respectively.

The top gaining sectoral indices on the BSE were, Oil and Gas up by 0.36%, TECk up by 0.35%, CD up by 0.34%, IT up by 0.28% and Power up by 0.22%. While, PSU down by 0.32%, Bankex down by 0.27%, Realty down by 0.20%, Auto down by 0.05% and FMCG down by 0.05% were the top losers on the index.

The top gainers on the Sensex were BHEL up by 1.31%, Sun Pharma up by 1.24%, RIL up by 0.82%, Hero MotoCorp up by 0.63% and Wipro up by 0.63%.

On the flip side, Cipla was down by 1.52%, GAIL was down by 0.42%, ITC was down by 0.40%, ICICI Bank was down by 0.39% and NTPC was down by 0.31% were the top losers on the Sensex.

Meanwhile, with the European Union and the US markets struggling with fiscal crisis, in a move to help the exporters, the Commerce Ministry is planning to introduce a method of providing incentives to exporters in order to achieve the $320 billion exports target for the current financial year. As per the Commerce and Industry Additional Secretary Rajeev Kher, special efforts were needed that could be in nature of incentives, additional markets and making more efforts on market promotions.

Further, with the recent FICCI survey highlighting that the export target of $320 billion for FY13 is unlikely to be met due to the global demand slowdown. Moreover, rising cost of raw materials and weak demand from overseas are primary factors that are bothering members of the export community. As a result, primary focus will now be for providing tax incentive or market promotion scheme with an ultimate aim of making the export more profitable.

At present, Europe and the US have been the primary export markets and as per Kher, new export strategy should be developed targeting other countries like Africa and the Middle East to take the next leap forward.

However, trade deficit with China has also risen to $40 billion and thus arises the need to export more to that country. Further, optimistic about the pharma sector, Kher said the sector will be able to achieve the export target of $25 billion by 2014. Moreover, increasing imports and widening trade deficit will definitely impact the country’s CAD which will put pressure on rupee.

The S&P CNX Nifty opened at 5,635.45; about 8 points higher as compared to its previous closing of 5,627.75, and has touched a high and a low of 5,637.75 and 5,619.55 respectively.

The index is currently trading at 5,625.75, down by 2.00 points or 0.04%. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were BHEL up by 1.02%, HCL Tech up by 1.01%, Sun Pharma up by 0.83%, Reliance Industries up by 0.76% and Wipro up by 0.73%.

On the flip side, Cipla down by 1.42%, IDFC down by 1.31%, Siemens down by 1.18%, M&M down by 0.66% and Reliance Infra down by 0.57%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up by 14.70 points or 0.73% to 2,030.31, Hang Seng gained 46.58 points or 0.21% to 21,789.78, Jakarta Composite was up by 3.76 points or 0.09% to 4,338.63, Straits Times gained 1.76 points or 0.06% to 2,988.58, Seoul Composite was up by 5.84 points or 0.29% to 1,905.10 and Taiwan Weighted surged by 145.81 points or 2.06% to 7,251.90.

KLSE Composite was the lone loser, down by 5.33 points or 0.33% to 1,613.22.

The Japanese market remained closed today.