Benchmarks equity indices evaporating entire gains slip into red zone

Evaporating entire gains, benchmark equity indices were now trading in the red zone albeit with slender loss as investors continue to book profit tracing the tepid global cues. Asian pacific shares were trading down beat as some investors sold shares to lock in profits following recent rallies. Stocks in Hong Kong, Australian and elsewhere surged last week after U.S. lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the 'fiscal cliff.'

Losses in Capital Goods, Realty and Bankex counters also were underscoring the underlying weakness of the bourses. However, stocks from defensive HealthCare, rate sensitive Auto and Oil & Gas space, capped the losses of the bourses. Despite, trading in proximity to intra-day low level, Sensex was holding above 19750 level. Similarly, widely followed index, Nifty, on NSE too was holding 6000 bastion. Meanwhile, broader indices outperforming the frontline equity indices, have enticed gains above half a percent.

Upstream oil and gas companies continued to trade sanguine on hopes that a pricing formula recommended by a government-appointed panel will help sharply raise the prices of domestic natural gas. Oil and Natural Gas Corporation (ONGC) and Cairn India had rallied close to 2%. Additionally, Telecom stocks were ringing loud after EGOM decided 30%-lower 2G auction price. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1634:1028, while 122 shares remained unchanged.

The BSE Sensex is currently trading at 19778.20, down by 5.88 points or 0.03% after trading in a range of 19,856.43 and 19,758.23. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.65% and 0.86% respectively.

The top gaining sectoral indices on the BSE were, Health Care up by 0.88%, Auto up by 0.86%,Oil & Gas up by 0.54%, TECk up by 0.45% and Metal up by 0.43%, while, Capital Goods down by 0.84%, Realty down by 0.30%, Bankex down 0.24% and FMCG down by 0.16% were the top losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 2.88%, Cipla up by 2.56%, Hindalco Industries and Sun Pharma were up by 1.51% and M&M up by 1.40%. 

On the flip side, L&T down by 1.52%,  HDFC was down by 1.26%, HDFC Bank was down by 1.19%, HUL down by 0.91% and Coal India was down by 0.85% were the top losers on the Sensex.

Meanwhile, achieving 8.2% growth over the next five years (2012-17) will not be easy and a fresh approach to economic issues is needed to push growth, as per a Planning Commission study. Earlier, the country's apex policy making body - National Development Council (NDC) had already scaled down the average growth target for the 12th Plan to 8% from 8.2% envisaged earlier. The average growth rate was 7.9% in 11th Plan (2007-12).

Further, as per the study, policy options where the government only augments one determinant of growth at a time will not be enough, because the quantum of increase needed will be very high and at times unreasonable.

The Planning panel study also suggested that only a balanced growth path will be plausible and sustainable. New thinking, new efforts and new policies which can be implemented in a time-bound manner will be needed to augment each determinant of growth, in order to achieve the 12th Plan target over the next five years. Further, it added that the policies that led the growth spurt of mid-2000s may have already had its impact.

The economy recorded 9-year low annual economic growth of 6.5 percent in FY12 and it has grown by 5.4 percent in the first half of this fiscal. Meanwhile, Kaushik Basu a senior economist working with the World Bank, also noted that the economic growth in the current fiscal would be less than 6 percent.

The S&P CNX Nifty is currently trading at 6,012.55, down by 3.60 points or 0.06% after trading in a range of 6,042.15 and 6,005.75. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were BPCL up by 4.10%, Maruti Suzuki up by 2.96%, Cipla up by 2.67%, Cairn up by 2.02% and Hindalco Industries up by 1.62%.

On the flip side, L&T down by 1.57%, HDFC down by 1.28%, HUL down by 1.22%, HDFC Bank down by 1.16% and Coal India down by 1.06% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng was trading flat with negative bias, Nikkei 225 was trading lower by 0.83%, Straits Times edged lower by 0.01%, KOSPI Composite lost 0.03%, Taiwan Weighted declined by 0.65% and Jakarta Composite slips 0.17%. On the flip side, Shanghai Composite advanced 0.23% and KLSE Composite gained 0.07%.