Markets continue positive trade amid volatility

Indian equity markets pared some marginal gains but continued trading in positive territory in the late morning session, amid some bargain hunting after recent heavy losses. The Sensex was up by 77.86 points, while Nifty index of the National Stock Exchange was up 26 points. In currency market, rupee trimmed early gains but trading higher against greenback, amid increasing dollar selling by banks and exporters on expectation of resumption of foreign capital inflows into equity market. On the sectoral front, Banking stocks were trading higher, while IT stocks were mostly lower on weak economic data from the US, the biggest outsourcing market for the Indian IT firms. On the global front, Asian shares recovered but their gains remain capped as the US factory output slipped for the first time in six months raising concerns over the Fed bond-buying programme. Also, investors were keenly waiting for the US jobs report later in the week. Back home, the market breadth was favoring positive trend; there were 1,081 shares on the gaining side against 803 shares on the losing side, while 115 shares remain unchanged.

The BSE Sensex is currently trading at 19,688.34, up by 77.86 points or 0.40%, after trading in a range of 19,742.70 and 19,576.18. There were 23 stocks advancing against 7 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.50% and Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were, Health Care up by 1.92%, Capital Goods up by 1.59%, Power up by 0.84%, Oil & Gas up by 0.70% and PSU up by 0.69%, while IT down by 0.83%, TECk down 0.42% and Consumer Durables down by 0.27% were the top losers on the BSE.

The top gainers on the Sensex were L&T up by 2.48%, Cipla up by 2.39%, Dr Reddys Lab up by 1.60%, ICICI Bank up by 1.44% and NTPC up by 1.41%.

On the flip side, Infosys was down by 1.07%, Sterlite Inds was down by 1.02%, TCS was down by 1.00%, Jindal Steel was down by 0.89% and HDFC was down by 0.64% were the top losers on the Sensex.

Meanwhile, allaying fears of stagflation in the economy, the Reserve Bank of India governor D Subbarao said that the central bank is sensitive to growth concerns but not at the cost of higher inflation. During the interview, the governor said that the RBI takes into account the growth- inflation balance and accordingly it has been easing of interest rate since January last year.     

Maintaining that it is comfortable with 5 percent inflation, Subbarao asserted the need to bring down inflation to 5 percent saying that the relationship between growth and inflation is non-linear. ‘There is a threshold level of inflation and if inflation is above that level, it is unfavourable for growth. If inflation is below that level it is possible that you can bargain for higher growth, tolerating a little higher inflation’ he added.

By adding further, he said that stagflation is prolonged low growth and high inflation. But if we look at the trajectory of growth and inflation, we find that our inflation has come down. Indian economy’s growth has also come down because of crisis the post-crisis developments, he added. Indian GDP growth slowed down to decade low at around 5 percent in the FY13. Meanwhile, the average annual WPI inflation for 2012-13 was 7.34 percent. 

The CNX Nifty is currently trading at 5,965.30 up by 26.00 points or 0.44% after trading in a range of 5,981.60 and 5,932.85. There were 39 stocks advancing against 10 declines on the index and one remains unchanged.

The top gainers of the Nifty were Ranbaxy up by 2.79%, Cipla up by 2.69%, L&T up by 2.51%, Lupin up by 2.14% and IDFC up by 1.95%.

On the flip side, Sesa Goa down by 1.18%, Infosys down by 1.16%, HCL Tech down by 0.92%, TCS down by 0.91%, and UltraTech Cement down by 0.89% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite tumbled 1.26%, Jakarta Composite dropped 0.38%, Straits Times declined 0.10%, and Taiwan Weighted was down by 0.12%.

On the flip side, Hang Seng up by 0.11%, KLSE Composite rose 0.16%, Nikkei 225 was up by 2.07% and KOSPI Composite up by 0.02%.