Indian markets trade flat in morning deals

Indian equity benchmarks, after touching their two years high in previous session, have made a flat start and are hovering near their pre-close mark as market participants’ trade cautiously ahead of key earnings announcement this week. Adding to the woes were concerns over global growth recovery after World Bank cut its global growth forecast for this year, as austerity measures, high unemployment and low business confidence was dampening economies in developed nations. The US markets ended mixed overnight while, most of the Asian equity indices were trading lower at this point of time in Wednesday’s morning session with Japanese benchmark index heading for its first decline in three days, as Nikkei Stock Average retreated from a 32-month high on profit-booking amid earnings concerns.

Back home, markets witnessed some nervousness due to selling in banking counters as International Monetary Fund said that India’s financial system has been made vulnerable by deterioration in bank assets and a lack of capital as the economy slowed. Some pressure also came in from selling in retail stocks like Provogue India, Shoppers Stop, Trent and V2 Retail as Fitch Group maintained a negative outlook on the Indian retail sector for 2013, saying that slowdown has started hurting retail sector due to waning consumption owing to rising inflation and other macroeconomic factors. On the other hand, there is positive news that the finance ministry has finalised norms for new bank licenses and has sent its comments to the Reserve Bank of India.

On the sectoral front, oil and gas witnessed the maximum gain in trade followed by healthcare and consumer durables while, auto, software and technology remained the top losers on the BSE sectoral space. The broader indices were going neck-to-neck with benchmarks while, the market breadth on the BSE was positive; there were 937 shares on the gaining side against 800 shares on the losing side while 95 shares remain unchanged.

The BSE Sensex opened at 19,978.19; about 8 points lower compared to its previous closing of 19,986.82, and has touched a high and a low of 19,998.92 and 19,950.13 respectively.

The index is currently trading at 19,993.62, up by 6.80 points or 0.03%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a positive start with 51.15% stocks advancing against 43.67% declines. The BSE Mid cap and Small cap indices rose 0.16% and 0.15% respectively.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.11%, Healthcare up by 0.76%, Consumer Durables up by 0.37%, Metal up by 0.12% and Power up by 0.12%. While, Auto down by 0.68%, IT down by 0.59%, TECk down by 0.42%, Bankex down by 0.33% and FMCG down by 0.05% were the top losers on the index.

The top gainers on the Sensex were RIL up by 2.09%, Sterlite Industries up by 1.97%, Dr Reddys Lab up by 1.87%, Bajaj Auto up by 1.45% and Gail India up by 0.93%.

On the flip side, Tata Motors was down by 2.01%, Mahindra & Mahindra was down by 1.20%, Jindal Steel was down by 1.07%, TCS was down by 1.06% and Hindustan Unilever was down by 1.01% were the top losers on the Sensex.

Meanwhile, the government in next three weeks will decide on pricing of spectrum that will be sold in the second round of auction beginning March 11. The government is likely to raise Rs 45,000 crore from the spectrum sale that is expected to be completed before March end.

Meanwhile, the Supreme Court yesterday allowed mobile phone operators, whose licenses were due to be revoked this week as per an earlier court order, to continue service till February 4. The time was given as the court wanted certain answers from the government on the status and floor price of the coming re-auction of 2G spectrum. However, Department of Telecommunications (DoT) had urged the court to allow companies to operate until the next airwave auction.

Telecom Minister Kabil Sibal, affirmed Apex Court order as “positive” and believes that spectrum pricing issues will be decided before February 4, when the apex court will again hear the matter. “I think it’s a positive sign and I am sure that just as the previous auction process was completed without any problem the new auctions will also be completed within the time-frame and before the end of March,” Sibal said.

However, last time around, about 70 percent of the airwaves went unsold in the November auction that raised Rs 9,410 crore, less than 25 percent of the amount the government was targeting to raise from spectrum sale this fiscal.

The S&P CNX Nifty opened at 6,049.00; about 7 points lower as compared to its previous closing of 6,056.60 and has touched a high and a low of 6,052.85 and 6,038.30 respectively. The index is currently trading at 6,051.90, down by 4.70 points or 0.08%. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Reliance up by 2.05%, Ranbaxy up by 1.84%, Dr Reddys Lab up by 1.72%, Bajaj-Auto up by 1.46% and Lupin up by 1.17%.

On the flip side, Tata Motors down by 2.22%, TCS down by 1.36%, JP Associate down by 1.19%, DLF down by 1.17% and Mahindra & Mahindra down by 1.16%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 10.21 points or 0.44% to 2,315.47, Hang Seng slipped 47.74 points or 0.20% to 23,333.77, Jakarta Composite dipped 0.35 points or 0.01% to 4,400.47, KLSE Composite contracted 4.24 points or 0.25% to 1,681.65, Nikkei 225 tumbled 226.99 points or 2.09% to 10,652.09 and Taiwan Weighted was down by 35.38 points or 0.46% to 7,729.64.

On the flip side, Straits Times increased 10.86 points or 0.34% to 3,206.93 and KOSPI Composite was up by 4.85 points or 0.24% to 1,988.59.