Benchmarks trade choppy on profit booking

After witnessing a rally of over 6% in last week, Indian equity markets have made a flat opening and extended their losses in the early trade on the back of profit booking in the blue chip stocks. Moreover, the global cues remained unsupportive as US markets made a mixed closing on Friday, while all the Asian peers were exhibiting a subdued trade at this point of time. Back home, BSE’s Sensex breached its crucial 17,800 mark in early trade and lingering near its psychological 17,700 level. Moreover, the downfall is also supported by Auto major, Maruti Suzuki India which tumbled about 3% after dismal Q2 results. The company has reported a 59.8% year-on-year drop in net profit to Rs 240.4 crore, mainly due to prolonged labour unrest in the companies’ Gurgaon unit. On the sectoral front, software remained the top gainer led by Wipro which reported a decent Q2 results. The company’s consolidated net profit increased marginally by 1.25% at Rs 1300.9 crore for the quarter as compared to Rs 1284.9 crore for the similar quarter a period ago moreover, the Bangalore-based company forecasted third-quarter revenue of $1.50 billion to $1.53 billion from its IT services unit, which accounts for three-quarters of its total revenue, a rise of 2% to 4.1% from the second quarter. On the flip side, metal remained the top loser followed by oil and gas and consumer durables on the BSE sectoral space. The market breadth, indicating the overall health of the market was positive; there were 1,036 shares on the gaining side against 714 shares on the losing side while 54 shares remained unchanged.

The BSE Sensex opened at 17,806.21; about 2 points higher compared to its previous closing of 17,804.80, and has touched a low of 17,703.61 while high remain its opening.

The index is currently trading at 17,708.15, down by 96.65 points or 0.54%. There were 23 stocks advancing against 7 declines on the index.

The overall market breadth has made a positive start with 57.43% stocks advancing against 39.58% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.13% and 0.27% respectively.

The only gaining sectoral indices on the BSE were, IT up by 0.46%, TECk up by 0.37%, CG up by 0.16% and Power was up by 0.04%. While, Metal down by 1.23%, Oil and Gas down by 1.08%, CD down by 0.95%, Auto down by 0.77% and HC down by 0.73% were the top losers on the index.

The top gainers on the Sensex were Wipro up by 2.28%, NTPC up by 1.76%, Hero MotoCorp up by 1.27%, Infosys up by 0.80% and L&T was up by 0.34%.

On the flip side, Maruti Suzuki was down by 2.83%, Tata Motors was down by 2.42%, Hindalco was down by 2.39%, Sterlite Industries was down by 2.33% and Coal India was down by 1.35% were the top losers on the Sensex.

Despite the slowdown in global economy, Foreign Direct Investment (FDI) in India jumped by 95% in the first five months of the 2011-12. According to the ministry of commerce and industry’s data, FDI in April-August 2011 stood at $17.37 billion as compared to $8.887 billion during April-August 2010.

In the first seven months of the current calendar year, foreign investments surged by 50% to $20.76 billion compare $13.85 in the same period of last year. On month-on-month basis, FDI in August stood at $2.83 billion compare to $1.099 billion in July. July’s FDI inflow was the lowest figure in 2011-12, which indicate the slowdown in the global economy has affected the pace of capital inflow.

However, experts have the view that the government should further streamline polices and make the environment more conducive to the overseas investments.  In order to attract foreign investment, the government had relaxed FDI norms. The government had also relaxed norms for FDI in construction of old age homes and educational institutes and without lock in period rules.

The major sectors attracting overseas investment in the country are service (financial and non financial services), Telecommunication, housing and real estate and power sector. The major investing countries are Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE.

From last two financial years, India has been experiencing decline in FDI inflows, for 2010-11. India received FDI around $19.42 billion in 2010-11 compare to $25.83 billion in 2009-10, which is almost 25% decline. FDI inflows in 2008-09 were around $27.33 billion.

The S&P CNX Nifty opened at 5,358.90; about 2 points lower compared to its previous closing of 5,360.70, and has touched a high and a low of 5,360.25 and 5,326.15 respectively.

The index is currently trading at 5,327.90, lower by 32.80 points or 0.61%. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Wipro up by 1.87%, NTPC up by 1.85%, Siemens up by 1.55%, Hero MotoCorp up by 1.28% and Sesa Goa up by 1.17%.

On the flip side, Tata Motors down by 2.76%, Maruti Suzuki down by 2.66%, Hindalco down by 2.49%, Sterlite Industries down by 2.33% and Reliance Infra down by 2.03%, were the major losers on the index.

All the Asian counterparts were trading on the subdued note on Monday, Shanghai Composite was down 13.00 points or 0.53% to 2,460.41, Hang Seng was down 227.50 points or 1.14% to 19,791.74, Jakarta Composite was down 60.04 points or 1.57% to 3,769.92, KLSE Composite was down 4.04 points or 0.27% to 1,477.78, Nikkei 225 was down 15.43 points or 0.17% to 9,035.04, Straits Times was down 35.32 points or 1.22% to 2,870.40, Seoul Composite was down 23.32 points or 1.21% to 1,906.16 and Taiwan Weighted was down by 35.87 points or 0.47% to 7,580.19.