Indian equity markets trim gains; Nifty holds 5,950 mark

Indian equity markets trim minor gains but continue their firm trade in green in the late afternoon session on account of buying in front line blue chip counters and taking cues from European counterparts. Traders were seen piling position in Health Care, Capital Goods and Auto stocks while selling was witnessed in Consumer Durables, IT and Metal sector stocks. In the scrip specific development, hectic activity was noticed in Infosys after Nomura Financial Advisory and Securities India maintained its reduce rating on the company, saying that although the return of Narayana Murthy is a positive step, other key issues like slowdown in discretionary spending by clients and continued margin pressures, still remain challenges. Phoenix Mills was trading in green after domestic brokerage firm maintained its buy rating on the stock citing operational ramp-up, de-leveraging and value unlocking as the key triggers for the stock. Idea Cellular was trading in green on reports that the company is in talks to sell its tower business to Axiata.

On the global front, most of the Asian markets were trading in green while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,950 and 19,600 levels respectively. The market breadth on BSE was positive in the ratio of 1122:1019, while 171 scrips remain unchanged.

The BSE Sensex is currently trading at 19,646.11, up by 35.63 points or 0.18%, after trading in a range of 19,742.70 and 19,576.18. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading up by 0.46% and 0.66% respectively.

The top gaining sectoral indices on the BSE were, Health Care up by 1.75%, Capital Goods up by 0.96%, Auto up by 0.66%, Power up by 0.52% and Oil & Gas up by 0.51%, while Consumer Durables down by 1.02% IT down by 0.26% and Metal down by 0.09% were the only losers on the BSE.

The top gainers on the Sensex were Cipla up by 2.77%, Mahindra & Mahindra up by 2.12%, L&T up by 1.83%, Dr. Reddy’s Lab up by 1.79% and Tata Steel up by 1.69%. On the flip side, Jindal Steel down by 1.50%, Sterlite Inds down by 0.86%, HDFC down by 0.77%, Hindalco Industries down 0.64% and SBI down by 0.57% were the top losers on the Sensex.

Meanwhile, concerned over the widening current account deficit (CAD), the Reserve Bank of India (RBI) governor, D Subbarao said, the central bank would consider measures to contain the deficit in its next monetary policy review on June 17, since it has implications for the exchange rate and thereby for inflation.

The RBI governor emphasized that the country can run a large CAD one year but it cannot do it year after year and said though exports have to go up, there is a need to quickly deal with the import side issues. By adding further, he said that the government has raised the customs duty on gold import and the RBI has come out with some regulations to restrain the import of gold. But we need to increase exports in a big way and reduce dead-weight import like gold.

Gold imports into India, the world's largest consumer of the metal, stood at around 830 tonne in 2012-13, which widened the CAD to a record high of 6.7 percent in the third quarter of FY13.  In April, gold import jumped by 138 percent to $7.5 billion the highest so far this year pushing up the CAD to $17.7 billion.

Meanwhile, the RBI has taken several steps to check the widening CAD as the central bank recently imposed curbs on import of the yellow metal by banks. Besides this, it has also put restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs. The government has also taken steps like hike in import duty to restrict gold imports. The CNX Nifty is currently trading at 5,953.80, up by 14.50 points or 0.24% after trading in a range of 5,981.60 and 5,932.85. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 4.40%, Cipla up by 2.71%, Lupin up by 2.25%, M&M up 2.12% and IDFC up by 2.05%. On the flip side, Sesa Goa down by 1.77%, Jindal Steel down by 1.70%, HDFC down by 1.13%, Grasim Industries down by 1.03% and Axis Bank down by 0.97% were the major losers on the index.

Most of the Asian equity indices were trading in green; Straits Times added 0.05%, Hang Seng inched up 0.01%, KLSE Composite rose 0.38%, Nikkei 225 was up by 2.05% and Jakarta Composite was trading up 0.61%.

On the flip side, Shanghai Composite tumbled 1.17%, Taiwan Weighted down by 0.12%. KOSPI Composite was trading flat with negative bias

The European markets were trading in green; France’s CAC 40 was up 0.65%, Germany’s DAX added 0.63% and the United Kingdom’s FTSE 100 ascended 0.57%.