Benchmarks pare gains after a firm start

Bout of volatility was witnessed at the start of the trading session as key benchmark indices trimmed most of their gains after a firm opening triggered by higher Asian stocks. The frontline indices made a gap-up opening as market-men got some support from statement of PM’s Economic Advisor Council chairman C Rangarajan, who said that the current account deficit in 2012-13 is likely to be in the region of the last financial year's level of 4.2% of the GDP and are not a thing to worry as capital inflows through FDI, FII, external commercial borrowings or NRI deposits were adequate to cover the gap. But, market pared most of their initial gains as profit booking emerged in rate sensitives like banking and realty stocks after two consecutive days of rally. The domestic gauges, however, still trading marginally in the green as some support came in from metal counters as stocks like Tata Steel, SAIL, Sterlite Industries, Hindalco and Sesa Goa surged as LMEX, a gauge of six metals traded on the London Metal Exchange, jumped 3.68% to 3,581.70 on January 2, 2013.

Global cues too remained supportive as the US markets rallied on Wednesday, the first trading day of the year after a last-minute deal to avert the 'fiscal cliff' of tax hikes and spending cuts that threatened to derail the economy. While, the Asian markets have continued their rally mood with most of them trading higher by about half a percent as sentiments got some boost after China’s official purchasing managers’ index (PMI) for the non-manufacturing sector rose to a four-month high of 56.1 in December from 55.6 in November, adding to signs of a revival in the world’s second-largest economy.

Back home, software witnessed the maximum gain in trade followed by power, technology and metal while, banking, realty and consumer durables remained the top losers on the BSE sectoral space. Moreover, the broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 1,017 shares on the gaining side against 658 shares on the losing side while 80 shares remain unchanged.

The BSE Sensex opened at 19,771.03; about 56 points higher compared to its previous closing of 19,714.24, and has touched a high and a low of 19,786.30 and 19,693.29 respectively.

The index is currently trading at 19,726.25, up by 12.01 points or 0.06%. There were 15 stocks advancing against 15 declines on the index.

The overall market breadth has made a positive start with 57.95% stocks advancing against 37.49% declines. The broader indices too were trading in-line with benchmarks; the BSE Mid cap and Small cap indices rose 0.19% and 0.33% respectively.

The top gaining sectoral indices on the BSE were, IT up by 0.52%, TECk up by 0.40%, Metal up by 0.25%, Health Care up by 0.25% and Oil & Gas up by 0.16%. While, Bankex down by 0.27%, Realty down by 0.13%, Consumer Durables down by 0.10%, Power down by 0.09% and Auto down by 0.05% were the top losers on the index.

The top gainers on the Sensex were Dr Reddys Lab up by 1.81%, Tata Steel up by 0.92%, Coal India up by 0.77%, Wipro up by 0.72% and Infosys up by 0.71%.

On the flip side, Maruti Suzuki was down by 0.57%, Tata Power was down by 0.45%, ICICI Bank was down by 0.44%, Sun Pharma was down by 0.42% and HDFC Bank was down by 0.37% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) has reported that credit to industry increased at 17.7 per cent to Rs 20,85,300 crore in November 2012, lower than the growth of 20.9 per cent to Rs 17,71,200 crore in November 2011. However, the credit growth in November was in line with central bank's projections of 17 per cent growth for 2012-13 and bankers are expecting to achieve this credit growth mark in January-March quarter as banks have started lending to non-banking finance companies.

On a year-on-year (y-o-y) basis, non-food bank credit increased by 17.6 per cent in November 2012 as compared with the increase of 16.8 per cent in same period last year. However, RBI said that credit growth to industry declined in all sub-sectors except food processing, coal products, nuclear fuels, chemical and chemical products, paper and paper products, petroleum, barring mining and quarrying, wood and wood products, cement and cement products and all engineering. However, credit to the services sector increased by 15.3 per cent in November 2012 as compared with the increase of 17.2 per cent in November 2011.

Further RBI added that medium-sized units recorded only 3 per cent credit growth in November 2012 as against 28.7 per cent in November 2011 and credit in home loan increased by 13.2 per cent in November 2012 to Rs 4,37,200 crore as against the growth of 13.8 per cent to Rs 3,86,100 crore in the same period of previous year. Personal loans increased by 16.3 per cent in November 2012 as compared with the increase of 13.3 per cent in November 2011.

The S&P CNX Nifty opened at 6,015.80; about 22 points higher as compared to its previous closing of 5,993.25 and has touched a high and a low of 6,017.00 and 5,986.55 respectively.

The index is currently trading at 5,997.40, up by 4.15 points or 0.07%. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were Dr Reddys Lab up by 1.80%, IDFC up by 1.23%, Cairn up by 1.22%, Tata Steel up by 1.08% and Coal India up by 0.78%.

On the flip side, Punjab National Bank down by 0.82%, Bank of Baroda down by 0.76%, BPCL down by 0.68%, Tata Power down by 0.63% and Maruti Suzuki down by 0.51%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng rose 26.00 points or 0.11% to 23,337.98, Jakarta Composite surged 46.96 points or 1.08% to 4,393.44, KLSE Composite increased 10.41 points or 0.62% to 1,685.13, Straits Times added 14.91 points or 0.47% to 3,216.65 and Taiwan Weighted was up by 39.44 points or 0.51% to 7,818.66.

On the flip side, KOSPI Composite was down by 10.38 points or 0.51% to 2,020.72.

Markets in Japan and China remained shut for public holidays and will reopen on Friday.