Sensex trades flat after sharp setback on RBI’s no action mode

Indian equity markets trading flat in positive territory in the late morning session, following a sharp fall after Reserve Bank of India (RBI) left repo rate and the cash reserve ratio unchanged in its mid-quarter monetary policy review for the fifth straight meeting, as surging inflation restricted the scope for monetary easing sought by the investors. Meanwhile, the finance ministry had cut its forecast for India’s growth to about 5.7% to 5.9% in the year through March from an earlier estimate of as much as 7.85%. In currency markets, rupee gave up some gains after RBI’s policy announcement. On sectoral front, banking stocks fell sharply on central banks no-action mode. Realty stocks were also edging lower after a fairly decent spell in positive territory. Automobile stocks were managing to find some support for now. In global markets, most Asian shares edged up tracking overnight gains in US stocks, as fresh signs of compromise maintain a new optimism that the US fiscal cliff budget tussle could be settled before tax hikes and spending cuts begin to bite early next year. Back home, the market breadth favoring positive trend; there were 1,286 shares on the gaining side against 1,190 shares on the losing side while 114 shares remain unchanged.

The BSE Sensex is currently trading at 19,270.15 up by 25.73 points or 0.13% after trading in a range of 19,330.60 and 19,149.03. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading on mixed note; the BSE Mid cap index was down by 0.03% and Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were, Metal up by 1.17%, Auto up by 0.92%, Capital Goods (CG) up by 0.73%, Consumer Durables (CD) up by 0.67% and Power up by 0.63%. While Bankex down by 0.72%, Oil & Gas down by 0.44%, FMCG down by 0.28%, IT down by 0.16%, Realty down by 0.12% were the top losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 3.31%, BHEL up by 2.49%, Sun Pharma up by 2.43%, Sterlite Industries up by 2.25% and Hindalco up by 2.01%.

On the flip side, SBI was down by 1.06%, ONGC was down by 0.93%, Maruti Suzuki was down by 0.78%, ICICI Bank was down by 0.67%, and Reliance was down by 0.66% were the top losers on the Sensex.

Meanwhile, to push growth, which is estimated to decline to 5.7-5.9% in the current fiscal, chief economic advisor Raghuram Rajan has suggested a three-pronged strategy, which includes ‘a good confidence inducing budget, speeding up clearance for projects and capital market reform'.

While briefing the mid-year economic analysis, which was tabled in Parliament on December 18, Rajan said ‘we are at the end of the beginning and can take more steps to boost the economic growth.’ He said that the GDP growth may show improvement in the second half  of this fiscal to 6 per cent from 5.4 per cent in the first half  driven by factors like improved business confidence, corporate profitability, better industrial output numbers and moderating inflation.

While expressing his views on capital market reforms, Rajan said we have to take the number of measures like to strengthen the financial infrastructure, ability of equity market to finance infrastructure requirement, vibrancy of equity market and to improve the capital bond market.

The S&P CNX Nifty is currently trading at 5,857.50 up by 0.40 points or 0.01% after trading in a range of 5,882.70 and 5,823.15. There were 26 stocks advancing against 23 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Bharti Airtel up by 3.28%, Sun Pharma up by 2.46%, BHEL up by 2.44%, Sesa Goa up by 2.31% and Hindalco up by 1.93%.

On the flip side, Axis Bank down by 1.84%, Kotak Bank down by 1.29%, IDFC down by 1.09%, SBI down by 1.08%, and ACC down by 0.93% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite gained 0.01%, KLSE Composite added 0.42%, Nikkei 225 soared 0.96%, Straits Times gained 0.33%, KOSPI Composite was up by 0.24% and Taiwan Weighted was up by 0.16%.

On the flip side, Hang Seng down 0.02% and Jakarta Composite declined 0.41%.