Indian equity pare loss; Nifty above 5,900 mark

Indian equity markets pared losses to continue its trade hovering near the neutral line in the late afternoon session on account of buying in frontline counters. Traders were seen piling some position in Realty, Health Care and IT sector while selling was witnessed in Metal, CG and CD sector. In the scrip specific development, Kingfisher Airlines was locked at upper circuit limit after United Breweries (Holdings) hiked its loan limit for the beleaguered airlines to Rs 750 crore from Rs 300 crore. Realty major DLF was trading in green as the company aims to cut its net debt by half over the next three years to Rs 10,000-11,000 crore with the help of fresh issue of equity shares, sale of non-core assets and improved cash flows. Infosys was trading firm as the software services major will get listed on NYSE Euronext London and Paris markets tomorrow, becoming the first Indian company to be admitted to trade on the leading global bourse. Telecom stocks like Bharti Airtel and Idea Cellular were trading under pressure after wireless broadband airwave holders were allowed to provide voice services by paying additional fee, a move that is seen benefiting 4G licence holder Reliance Industries but leading to more competition in the sector.

On the global front, most of the Asian markets were trading in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,900 and 19,400 levels respectively. The market breadth on BSE was positive in the ratio of 1375:1270 while 143 scrips remain unchanged.

The BSE Sensex is currently trading at 19,498.57, down by 2.51 points or 0.01% after trading in a range of 19,531.51 and 19,457.21. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading higher by 0.51% and 0.43% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 0.86%, Health Care up by 0.80%, Information Technology (IT) up by 0.66%, Power up by 0.51% and PSU up by 0.32%. While, Metal down by 0.39%, Capital Goods (CG) down by 0.26%, Consumer Durables (CD) down by 0.23%, Oil & Gas down by 0.10% and Bankex down by 0.04% were the top losers on the index.

The top gainers on the Sensex were ONGC up by 2.41%, Cipla up by 1.75%, Hindustan Unilever up by 1.41%, BHEL up by 1.32% and NTPC up by 1.29%.

On the flip side, Bharti Airtel down by 2.39%, Hero MotoCorp down by 1.77%, Gail India down by 1.67%, Coal India down by 1.51% and Jindal Steel down by 1.19% were the top losers on the Sensex.

Meanwhile, arresting the hopes of further rate-cuts, Reserve Bank of India (RBI) Governor, D Subbarao said, ‘there is room for monetary easing over the next few months, but that room is limited because of the outlook for inflation and outlook for growth.’ As per the RBI, risk of inflation escalation as well as concerns over fiscal and current account deficits, are limiting the scope for easing of monetary policy.

As per the RBI governor, to decide on the monetary policy action, the RBI would have take into account the fiscal consolidation measures and deficit projections by the Finance Minister in the upcoming budget. He said that the government will come up with deficit status in the budget and we will consider the headline fiscal deficit number along with the quality of the fiscal adjustment.

By adding further he said monetary policy stance is also determined by the various factors like how the inflation will unfold and current account situation. Currently, the government is struggling with situation of widening deficit and now the pressure has shifted to the central bank to bring an environment of price stability and fiscal consolidation and also maintain it for long-term economic growth.    

As per Subbarao, current account deficit (CAD) in the current fiscal is expected to be at the highest level. CAD, which is the difference between inflow and outflow of foreign currency, was 4.2% in 2011-12 fiscal. It touched a record high of 5.4% in July-September quarter of current fiscal. While for fiscal deficit, the government aims to restrict fiscal deficit in the current financial year at 5.3% of GDP and bring it down to 4.8% in 2013-14. 

The S&P CNX Nifty is currently trading at 5,900.30, up by 2.10 points or 0.04% after trading in a range of 5,904.15 and 5,883.15. There were 29 stocks advancing against 20 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were ACC up by 2.36%, ONGC up by 2.30%, Cipla up by 1.95%, DLF up by 1.93% and Ranbaxy up by 1.93%.

On the flip side, Bharti Airtel down by 2.37%, GAIL down by 2.01%, Coal India down by 1.59%, Hero MotoCorp down by 1.56% and L&T down by 1.11% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 1.60%, Hang Seng dipped 1.02%, Jakarta Composite decreased 0.50%, KLSE Composite slipped 0.39% and Nikkei 225 was down by 0.31%. On the flip side, Straits Times rose 0.15%, KOSPI Composite added 0.20% and Taiwan Weighted was up by 0.22%.

The European markets were trading in green; France’s CAC 40 added 0.70%, Germany’s DAX rose 0.45% and United Kingdom’s FTSE 100 edged higher by 0.19%.