Sensex, Nifty moves in tight band amid cautious trade

After a buoyant start and subsequent retreat, Indian equity markets held modest gains in the late morning session on Tuesday amid alternate bouts of buying and selling. The Sensex briefly touched 20,000-mark in the first minute of trade, but pulled back immediately, tracking the weak trend in global markets, Nifty still trading above 6,000 mark. Meanwhile, markets sentiments were supportive after the government delayed the implementation of GAAR, the controversial rule on tax avoidance, and lower-than-expected inflation bolstered the case for cut in interest rates. In currency market, following positive opening, local unit erased all early gains amid dollar demand from importers. On sectoral front, automobile, capital goods and information technology stocks were finding some support. A few stocks from healthcare and FMCG sectors were also edging up a bit, while metal stocks were mostly subdued. In global markets, Asian stock markets were trading mixed on Tuesday with investors mostly treading cautiously following a flat lead overnight from Wall Street. Back home, the market breadth favoring positive trend; there were 1,344 shares on the gaining side against 1,105 shares on the losing side while 114 shares remain unchanged.

The BSE Sensex is currently trading at 19,936.87 up by 30.46 points or 0.15% after trading in a range of 20,007.09 and 19,907.85. 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 0.46% and Small cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were, Realty up by 1.18%, Auto up by 0.75%, Capital Goods up by 0.50%, TECk up by 0.48% and IT up by 0.43%. While, Oil & Gas down by 0.11% was the sole loser on the index.

The top gainers on the Sensex were TCS up by 2.23%, Bharti Airtel up by 1.61%, Maruti Suzuki up by 1.49%, Tata Motors up by 1.48% and Cipla up by 1.44%.

On the flip side, Hero MotoCorp was down by 1.64%, Hindustan Unilever was down by 0.89%, Sterlite Industries down by 0.89%, Sun Pharma down by 0.82% and Coal India down by 0.82% were the top losers on the Sensex.

Meanwhile, in an effort to boost country’s exports, Reserve Bank of India (RBI) has extended the 2 per cent interest subsidy scheme for exporters in segments like handicrafts, carpets, SMEs and certain engineering goods, by one year till March 2014. Other sectors which will be benefited from the extension of Rupee Export Credit Interest Rate Subvention Scheme are, handlooms, readymade garments, processed agriculture products, sports goods, toys and 134 engineering good items (or tariff lines).

Under the scheme, banks would reduce the interest rate chargeable to the exporters as per Base Rate system in the select sectors eligible for export credit subvention by the amount of subvention available subject to a floor rate of 7%. Banks may ensure to pass on the benefit of 2% interest subvention completely to the eligible exporters.

Earlier also, the interest subvention scheme was extended till March 31, 2013 on pre and post shipment rupee export credit for certain employment orientated export sectors. However, this time around the government decided to widen the scheme to include certain goods from the engineering sector. A list of as much of 134 tariff lines of Engineering products was approved for inclusion in Interest Subvention for the period January 1, 2013 to March 31, 2013.

Country’s exports have been on declining spree past last eight months. Exports fell 1.9% year-on-year to $24.88 billion in December, whereas improved when compared to $22.3 billion recorded in November 2012.

The S&P CNX Nifty is currently trading at 6,036.05 up by 12.00 points or 0.20% after trading in a range of 6,044.60 and 6,023.20. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Ambuja Cement up by 2.95%, TCS up by 2.27%, Axis Bank up by 2.07%, Ultra Cement up by 1.87% and Bharti Airtel up by 1.86%.

On the flip side, Hero MotoCorp down by 1.26%, Sesa Goa down by 1.12%, Hindustan Unilever down by 1.01%, Sun Pharma down by 0.85% and Kotak Bank down by 0.84%, were the major losers on the index.

The Asian equity indices were trading on mixed; Hang Seng declined 0.13%, Straits Times dropped 0.60%, KOSPI Composite decreased 1.16% and Taiwan Weighted was down by 0.75%.

On the flip side, Shanghai Composite surged 0.37%, KLSE Composite rose 0.08%, Nikkei 225 was up by 0.72%, and Jakarta Composite rose 0.21%.