Sensex, Nifty trade sideways; marginally in green

Indian benchmarks swung sideways barely around the neutral line as uncertainty prevailed over the definite trend of the market on back of a directionless previous session that followed after the strong rally which drove the benchmark indices to a two-year high countered by optimism over foreign inflows. On the global front, most of the Asian equity indices were trading in green with major gauges gaining strength after a flat start as investors opted to pile up positions in beaten down but fundamentally strong stocks. Back home, the traders were seen piling up positions in Realty, Power and IT while selling was seen in Consumer Durables, Health Care and Bankex sector.

In scrip specific development, Pharma majors, Ranbaxy, Dr Reddy's, Cipla was trading in red after the Department of Pharma notified the drug price control order yesterday. Accordingly, new pricing will come into effect on the July 1. While this is in-line with most analyst expectations but it will impact the bottomline and return ratios of the companies in the near term with no substantial long term impact likely. Banking shares was trading under pressure two straight days of gains sparked by rising hopes the Reserve Bank of India will cut interest rates as early as June.

In scrip specific actions, Gujarat Alkalies and Chemicals (GACL), spurted after the company showed sharp rise in the net profit for the fourth quarter ended March 2013. Cairn India trades higher as the Vedanta group firm will invest $3 billion (over Rs 16,000 crore) in the next three years to expand its oil and gas production in the country. Cadila Healthcare gained after the company launched a migraine drug in the US market up on receiving the final approval from the USFDA. ITC soared will be in focus ahead of its quarterly results. Arvind Remedies rose after the company said it has registered higher net profit of Rs 12.41 crore in the quarter ended March 31, 2013 against Rs 45 lakh in the corresponding period of the previous fiscal. JM Financial surged as Vikram Pandit, the former chief executive of Citigroup, will acquire 50 per cent stake in JM's non-banking financial company (NBFC) and buy 3 per cent stake in the parent company. Gujarat State Fertilisers and Chemicals (GSFC) tanked  after the company reported 75 per cent decline in the net profit at Rs 58.44 crore for the fourth quarter ended March on account of higher expenses. Reliance Capital   dropped  after the company reported over 19 per cent decline in net profit at Rs 265 crore for the quarter ending March 2013, mainly due to drop in income from operations.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 6,100 and 20,000 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in ratio of 995: 748.

The BSE Sensex is currently trading at 20256.37, up by 9.04 points or 0.04% after trading in a range of 20308.97 and 20203.76. There were 17 stocks advancing against 13 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.42% and Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were, Realty up by 1.52%, Power up by 0.75%, IT up by 0.51%, Metal up by 0.33%, PSU up by 0.31% and while, Consumer Durables down by 0.52%, Health Care down by 0.24% and Bankex down by 0.12% were the losers on the BSE.

The top gainers on the Sensex were NTPC up by 1.28%, Tata Motors up by 1.25%, Cipla up by 1.22%, Jindal Steel up by 1.14%, Tata Power up by 0.81%. On the flip side, Dr Reddys Lab was down by 1.77%, Bharti Airtel was down by 1.23%, HDFC Bank was down by 1.15%, Gail India was down by 1.02%, and  HDFC was down by 0.99% were the top losers on the Sensex.

Meanwhile, As per the Department of Industrial Policy and Promotion (DIPP), India needs to boost its manufacturing sector to bridge the ballooning current account deficit (CAD) and trade imbalance. The CAD touched an all-time high of 6.7 percent of GDP in the third quarter of FY13, while India's trade deficit has touched a record of $191 billion during the last fiscal.

DIPP’s Secretary Saurabh Chandra said, the country’s manufacturing sector should be of high quality to increase the contribution of manufacturing sector in the country's GDP and create lakhs of jobs. There are countries such as Germany, China and Japan which have trade surpluses equal to India's trade deficit because of their high quality manufacturing activities.

By adding further, Chandra said that high manufacturing technology, high standard and focus on R&D are necessary for sustainable manufacturing. Further, the industry should start focusing at voluntary and mandatory standards for quality manufacturing.

He also expressed the need to shift jobs from agriculture sector to manufacturing for inclusive growth like China. According to estimates, China has transferred 150 million people from agriculture to manufacturing and created about 84 million jobs in the non-farm sector in rural areas.      

Meanwhile, to boost the manufacturing sector, the government has introduced National Manufacturing Policy, which aims at increasing contribution of manufacturing to the national GDP from current 16 per cent to 25-26 per cent by 2025 and of creating 100 million jobs in the next decade. The CNX Nifty is currently trading at 6,174.65 up by 4.75 points or 0.08% after trading in a range of 6,188.60 and 6,153.85. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were Ambuja Cements up by 2.60%, ACC up by 2.22%, Cairn up by 1.80%, Grasim up by 1.77% and JP Associaties up by 1.29%. On the flip side, IndusInd Bank down by 2.04%, Dr Reddy's Laboratories down by 1.81%, GAIL down by 1.24%, HDFC Bank down by 1.15% and Ranbaxy Laboratories down by 1.11% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 2.95 points or 0.13% to 2,254.75, Jakarta Composite surged 23.91 points or 0.47% to 5,102.59, KLSE Composite increased 1.75 points or 0.10% to 1,768.47, Nikkei 225 added 86.02 points or 0.58% to 15,124.82.

On the flip side, Straits Times was down by 0.02 points or 0.01% to 3,449.43 and Taiwan Weighted was down by 23.16 points or 0.28% to 8,366.87.

Markets in Hong Kong and South Korea are closed for holidays.