Benchmarks gyrate around neutral line; October IIP expands at 8.2%

The Indian equity markets are gyrating around their neutral line. While, most of the Asian equity indices were trading in the green at this point of time thanks to strong overnight performances in global equities and firmer economic sentiment in Germany buoyed sentiment. On the home turf, annual industrial output growth measured by index of industrial production (IIP), expanded by robust 8.2% at 171.3 for the month of October 2012 against contraction of 0.4% in the previous month. The figure was much higher against the street’s expectation of 4.9%. The cumulative growth for the period April-October 2012-13 over the corresponding period of the previous year stands at 1.2%.The indices of industrial production for the mining, manufacturing and electricity sectors for the month of October 2012 stood at 122.5, 181.9 and 160.5 respectively, with the corresponding growth rates of  (-) 0.1%, 9.6% and 5.5% as compared to October 2011. The traders were seen piling up position in IT, Auto and TECk, while selling was seen in PSU, FMCG and Power sector. In the scrip specific development, Indian Oil Corporation, HPCL and BPCL were trading in red after Oil Minister Veerappa Moily stated that government is likely to increase the limit of subsidised cooking-gas supplies to nine 14.2-kilogram cylinders per family a year from six now. GMR Infrastructure was trading under pressure on reporting that company, which is the largest stake holder in a venture that runs the Delhi airport, could be on a collision course with its consortium partner the Airports Authority of India (AAI) on the issue of sharing revenues. Tech Mahindra was trading in green after a block sale of 9.3 million shares. The NSE Nifty and BSE Sensex were managing to hold their psychological 5,850 and 19400 levels respectively. The market breadth on BSE was positive, in the ratio of 1134:953.

The BSE Sensex is currently trading at 19400.97 up by 13.83 points or 0.07% after trading in a range of 19478.79 and 19381.07. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.28% and Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were, IT up by 1.00%, Auto up by 0.82%, TECk up by 0.73%, Consumer Durables up by 0.60% and Healthcare up by 0.45%. On the other hand, PSU down by 0.31%, FMCG down by 0.30%, Power down by 0.25%, Bankex down by 0.20%, and CG down by 0.18% were the top losers on the Sensex.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.78%, Sun Pharma up by 1.50%, Bajaj Auto up by 1.44%, Hero MotoCorp up by 1.42%, and Wipro up by 1.20%. On the flip side, Hindustan Unilever was down by 2.65, Tata Power was down by 1.26, NTPC was down by 0.91, Bharti Airtel was down by 0.80, and L&T was down by 0.65 were the top losers on the Sensex.

 Meanwhile, Global rating agency Moody’s expects India’s growth prospects to improve in 2013.In its report it has stated that after an obstinate coalition partner Trinamool Congress withdrew its support to government because of which government was able to push through economic reforms, especially allowing foreign investment in multi-brand retail. Moody’s in its report pointed out that government has also expressed its commitment to raise FDI cap in the insurance sector, which would require approval of Parliament. Moody's added that it expects that India's structural strengths, high household savings rate and relatively competitive private sector will ultimately raise the GDP growth rate to 6%  from around 5.4% in FY13 and higher in the next financial year.

Further, the rating agency said that near-term risks around India’s fiscal and external deficits have receded and business groups are more upbeat, it will translate into better investment and GDP growth in future, that improves its longer-term outlook.

However, Moody's also cautioned that high inflation and a large fiscal deficit would continue to pose challenge for the economy limits the scope for further fiscal and monetary easing. 

The S&P CNX Nifty is currently trading at 5,897.35, down by 1.45 points or 0.02% after trading in a range of 5,924.60 and 5,892.25. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were HCL Tech up by 2.38%, M&M up by 1.54%, Sun Pharma up by 1.47%, Hero Motocorp up by 1.24% and Wipro up by 1.24%. On the flip side, Hindustan Unilever down by 2.74%, Ultra cement down by 1.33%, Tata Power down by 1.30%, Bank Baroda down by 0.93% and Bharti Airtel down by 0.92%, were the top losers on the index.

Most of the Asian markets trade in green Hang Seng gained 120.82 points or 0.54% to 22,444.76, Jakarta Composite was higher by Up 8.81 points or 0.20% to 4, 3226.73, KLSE Composite was up by 5.33 points or 0.32% to 1,646.90, Straits Times was up by 19.13 points or 0.61% to 3,137.46, Seoul Composite was up by 5.75 points or 0.29% to 1,970.37., Nikkei 225 gain 64.51 points or 0.68% to 9,589.83 and Taiwan Weighted was trading higher by 60.69 points or 0.80% to 7,674.38.

On the other hand, Shanghai Composite was down by 2.68 points or 0.13% to 2,072.03 was the sole loser in Asian pack.