Markets trade flat in negative territory amid volatility

Indian equity markets continued trading flat in negative territory amid selling pressure in late morning session, but the broader markets outperformed benchmarks. The Sensex was down by 30.06 points, Nifty down by 16.70 points. The Reserve Bank of India (RBI) kept interest rates unchanged on Monday, warning of upward risks to inflation, which also weighed on market movements. In currency market, rupee continued to depreciate against greenback and moving towards record low on Monday amid dollar strength against other Asian currencies, ahead of the two-day Federal Reserve meeting amid concerns about a potential early roll down of the US monetary stimulus programme. On the sectoral front, a few blue chip stocks from information technology, capital goods, metal and oil sectors finding good support at lower levels. Bank, Auto, FMCG and consumer durables stocks were trading weak.

On the global front, Asian shares eased on Tuesday as investors waited for Federal Reserve Chairman Ben Bernanke to clarify the US central bank's plans for its stimulus program - with the mere suggestion of fine-tuning it enough to unnerve market sentiment. Back home, the market breadth was favoring positive trend; there were 992 shares on the gaining side against 840 shares on the losing side, while 103 shares remain unchanged.

The BSE Sensex is currently trading at 19,287.81, down by 30.06 points or 0.20% after trading in a range of 19,334.07 and 19,227.11. There were 10 stocks advancing against 20 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 only gaining sectoral indices on the BSE were, Realty up by 0.66%, Oil & Gas up by 0.55%, TECk up by 0.53%, IT up 0.26% and Power up by 0.14%, while Consumer Durables down by 0.75%, Bankex down by 0.65%, Auto down by 0.47%, FMCG down by 0.23% and Capital Goods down by 0.14% were the top losers on the BSE.

The top gainers on the Sensex were Reliance up by 1.30%, Tata Power up by 1.15%, Bharti Airtel up by 0.73%, Infosys up by 0.65% and Hero MotoCorp up by 0.60%. On the flip side, Tata Motors was down by 1.89%, ICICI Bank was down by 1.18%, Hindalco was down by 1.13%, Cipla was down by 0.84% and GAIL was down by 0.80% were the top losers on the Sensex.

Meanwhile, in order to  increase production and contain the current account deficit (CAD), Finance Minister P Chidambaram said, the country should get its policies and priorities right as long-term measures and the only way to contain CAD is to increase the domestic production of oil & coal and restrain the consumption of gold.

Chidambaram said the main reason for India's large CAD is that the country has huge dependence on import of certain items like oil, coal and gold. Touching a record high of 6.7% of GDP in the third quarter of 2012-13, India’s CAD is likely to be around 5% in the 2012-13 fiscal. Further, high CAD is also impacting the domestic currency, which recently fell to its lifetime low level of over 58.90 against dollar.      However, as per the apex bank - RBI, India can sustain CAD of around 2.5%.

However, finance minister is of view that India continues to remain a desired destination for FDI and FII, despite recession in major economies. By adding further he said, in spite all probability the government was able to finance the CAD and also added around $3 billion to the forex reserves in 2012-13 and expressed confidence that in 2013-14 also CAD will be financed without dipping into reserves.

The CNX Nifty is currently trading at 5,833.35 down by 16.70 points or 0.29% after trading in a range of 5,843.95 and 5,815.15. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Reliance up by 1.33%, Tata Power up by 1.28%, Kotak Bank up by 1.17%, Bharti Airtel up by 0.83% and DLF up by 0.79%. On the flip side, Ranbaxy Laboratories down by 4.58%, UltraTech Cement down by 2.41%, Tata Motors down by 1.77%, Axis Bank down by 1.66% and Ambuja Cement down by 1.26% were the major losers on the index.

Most of Asian equity indices were trading in green; Shanghai Composite up by 0.14%, Jakarta Composite surged 1.41%, Straits Times soared 1.46%, KOSPI Composite rose 0.93%, KLSE Composite up by 0.01% and Taiwan Weighted was up by 0.23%.

On the flip side, Hang Seng dropped 0.30% and Nikkei 225 was down by 0.20%.