Markets pare early gains amid volatile trade

After a steady start, Indian equity markets pared some early gains and trading flat in positive territory in the late morning session amid stock specific activity. Markets were taking cues from quarterly results and movements are a bit volatile due to expiry of near month derivatives contracts on Jan 31. In currency markets, rupee extended earlier session’s gains against US dollar on Wednesday after the RBI slashed lending rate and cash reserve ratio (CRR) by 0.25% each on Jan 29, to perk up economic growth. On sectoral front, consumer durables, oil and realty stocks were among the notable gainers. Select metal stocks also rallied smartly, while automobile, FMCG and power stocks were a bit subdued. In global markets, Asian shares rallied on Wednesday as investor confidence in the global economic outlook strengthened on solid US data, giving comfort to investors ahead of the US Federal Reserve's monetary policy decision due later in the session. Back home, the market breadth favoring negative trend; there were 1,127 shares on the gaining side against 1,213 shares on the losing side while 130 shares remain unchanged.

The BSE Sensex is currently trading at 19,993.55 up by 2.65 points or 0.01% after trading in a range of 20,073.46 and 19,992.86. 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 0.34% and Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.81%, Realty up by 1.35%, Oil & Gas up by 1.01%, Metal up by 0.56% and Bankex up by 0.18%. While, FMCG down by 0.71%, Capital Goods down by 0.55%, Power down by 0.55%, Auto down by 0.29% and PSU down by 0.06% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 1.75%, RIL up by 1.65%, Hindustan Unilever up by 1.65%, Sterlite Inds up by 1.24% and Coal India up by 1.14%.

On the flip side, ITC down by 1.83%, Tata Power down by 1.69%, Gail India down by 1.58%, Tata Motors down by 1.02% and SBI down by 1.01% were the top losers on the Sensex.

Meanwhile, to enhance the share of export credit in the books of banks, Reserve Bank Governor D Subbarao on January, 29 constituted a technical advisory group to look for solutions to help the export orientated sector. Worried over the declining export, Subbarao said that the burgeoning current account deficit as 'biggest risk for inflation and macroeconomic management'.

The RBI governor D Subbarao said that banks' exposure to the exports sector still stands at a poor 5 percent or less in some cases, even when the RBI has allowed them to go up to 12 percent. By adding further, Subbarao said ‘apart from cost of financing, there are a number of non-cost issues for export sectors like transaction costs, accounting norms, documentation required, procedural difficulties. So, we decided to constitute a technical working group to go into these issues.’

The constituted technical advisory group will be headed by RBI Executive Director G Padmanabhan. Apart from officials from the central bank, the committee will also be represented by Export Credit Guarantee Corporation, the Exim Bank, the Indian Banks Association and the Federation of Indian Exporters Organisation.

Further, as per the governor, in the last six months, the apex bank has taken certain steps to improve the export like raising the rupee export credit refinance facility to 50 percent from 15 percent and the recent dollar-rupee swap facility to $6.5 billion.

The S&P CNX Nifty is currently trading at 6,053.20 up by 3.30 points or 0.05% after trading in a range of 6,071.95 and 6,052.50. There were 29 stocks advancing against 20 declines on the index, while one remains unchanged.

The top gainers of the Nifty were DLF up by 3.43%, Reliance Industries up by 1.72%, Hindustan Unilever up by 1.70%, Cipla up by 1.58% and Axis Bank up by 1.41%.

On the flip side, PNB down by 1.84%, Tata Power down by 1.74%, ITC down by 1.67%, GAIL down by 1.50% and Bank of Baroda down by 1.20% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite rose 0.20%, Hang Seng increased 0.72%, Jakarta Composite surged 0.18%, Nikkei 225 soared 2.10%, Straits Times jumped 0.54%, KOSPI Composite added 0.43% to 1,956.74 and Taiwan Weighted was up by 0.40%.

On the other side, KLSE Composite was down by 0.77%.