Benchmarks continue to trade sanguine on rate cut hopes; Nifty stays close to 6000 mark

Gyrating in thin-range, benchmark equity indices continued to trade firm on account of positive macro-economic data amidst positive global cues. Lower than expected December Inflation figures, which revived hopes of rate-cut from Reserve Bank of India (RBI), in its upcoming monetary policy review on January 29 also boosted sentiment at D-Street.

Trading in vicinity to intra-day’s high, 30 share barometer index, Sensex, was oscillating above its 19800 psychological level, while 50 share barometer index, Nifty, appeared increasing close to its 6000 bastion. Additionally, broader indices too have pared some gains.

On the global front, Asian pacific were trading mostly higher on Monday, with Chinese stocks up substantially after the head of the securities regulator made comments on foreign participation in China's largely closed off stock market, while Singapore declined as property developers fell after the government introduced new cooling measures. Closer home, even gains from Information Technology and Consumer Durable counters, buttressed the sentiment. Infosys shares, which rose nearly 3 per cent on the back of multiple brokerage upgrades following the strong quarterly performance on Friday, mainly spurred gains for the rest of peers.

The BSE Sensex is currently trading at 19808.23 up by 144.59 points or 0.74% after trading in a range of 19853.91 and 19689.09. There were 21 stocks advancing against 9 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.50% and Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were, IT up by 2.33%, Realty up by 2.18%, TECk up by 1.99%, Consumer Durables up by 1.06% and Bankex up by 0.80% while, Auto down by 0.48% and Health Care down by 0.20%, were the only losers on the index.

The top gainers on the Sensex were Infosys up by 3.15%, ONGC up by 2.11%, TCS up by 2.02%, ICICI Bank up by 1.68%, and NTPC up by 1.02%.

On the flip side, Maruti Suzuki was down by 1.98%, Cipla was down by 1.28%, Coal India was down by 0.83%, Sun Pharma was down by 0.76% and Bajaj Auto was down by 0.71% were the top losers on the Sensex.

Meanwhile, dashing hopes of any policy rate cut by the RBI in the upcoming monetary policy review, annual rate of inflation, based on the consumer prices index (CPI) in India, crept higher in the month of December at 10.56 percent.  Meanwhile, Food inflation in the CPI surged to 13.04 percent in December from 11.81 percent in November 2012.

According to the data released by Central Statistics Office, provisional annual inflation rate based on all India general CPI (Combined) for December 2012 on point to point basis stood at 10.56 percent as compared to 9.90 percent for the previous month of November 2012.

According to the Ministry of Statistics and Programme Implementation, which released the monthly provisional CPI on Base 2010=100 along with annual inflation rates for December 2012, all India provisional General (all groups), CPI numbers of December 2012 for rural, urban and combined were at 126.8, 124.0 and 125.6 respectively. The corresponding inflation rates for rural and urban areas for December came in at 10.74 percent and 10.42 percent respectively as against November's 9.79 percent and 9.72 percent, respectively, which indicated that the rate of price rose in rural areas.

India has the highest retail inflation among the BRICS group of emerging economies - Brazil, Russia, China, and South Africa -- and is way above the Reserve Bank of India (RBI)'s comfort level. However, unlike most central banks, the RBI uses wholesale inflation in its policy formulation, as annual consumer price inflation data was only launched this year in January.

The S&P CNX Nifty is currently trading at 5,991.75 up by 40.45 points or 0.68% after trading in a range of 6,002.45 and 5,962.15. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were HCL Tech up by 4.32%, DLF up by 3.97%, Infosys up by 3.05%, TCS up by 2.14%, and ONGC up by 2.10%.

On the flip side, Maruti Suzuki down by 1.80%, Lupin down by 1.69%, ACC down by 1.60%, Ultratech Cement down by 1.41%, and Cipla down by 1.30%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite soared 3.09%, Hang Seng rose 0.52%, Jakarta Composite surged 1.08%, KLSE Composite 0.14%, KOSPI Composite was up by 0.52% and Taiwan Weighted was up by 0.06%, while Straits Times dropped 0.40%. Japanese Nikkei remained shut for trade today on account of Coming of Age (Adults') Day.