Markets shows recovery amid volatile trade

Following a positive start and subsequent retreat, Indian equity markets have again moved in positive territory to trade notably higher in the late morning session on Tuesday. Benchmarks gained some traction on recovery in Asian markets, but broader markets remained under pressure. In currency market, Indian rupee pared early gains and shifted in negative territory on the back of dollar demand from importers and US currency’s strength against other major currencies. On sectoral front, consumer durables stocks were down for the second successive day. Automobile and capital goods stocks were mostly trading lower, while realty and oil stocks were finding fairly good support.

On the global front, Asian markets remained under pressure, as Chinese shares extended losses on Tuesday, sinking to their lowest levels since early 2009, with the financial sector again hard hit on expectations that an official crackdown on easy credit and tighter funding conditions will persist. Back home, the market breadth was favoring negative trend; there were 1,185 shares on the losing side against 647 shares on the gaining side, while 122 shares remain unchanged.

The BSE Sensex is currently trading at 18,627.77, up by 86.88 points or 0.47% after trading in a range of 18,642.99 and 18487.30. There were 18 stocks advancing against 10 declines on the index and two remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 1.24% and Small cap index was down by 0.63%.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.24%, Realty up 0.96%, FMCG up 0.33%, Bankex up 0.21% and PSU up by 0.20%, while Consumer Durables down by 1.25%, IT down by 0.52%, Health Care down by 0.38%, Power down by 0.32%, and TECk down by 0.31% were the top losers on the BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.04%, Hindalco Industries up by 2.97%, ONGC up by 2.19%, HDFC Bank up by 2.14%, and Mahindra & Mahindra up by 1.73%. On the flip side, Wipro was down by 2.15%, Maruti Suzuki was down by 1.41%, Tata Motors was down by 1.36%, Infosys was down by 0.87% and SBI was down by 0.52% were the top losers on the Sensex.

Meanwhile, amid the concerns of economic downturn, the Reserve Bank of India Deputy Governor Anand Sinha has said that the government and the RBI are taking all possible steps to revive the macro-economic indicators like high inflation and current account deficit (CAD) and low economy’s growth. Anand Sinha, who looks after banking supervision at RBI, further said that the financial sector is bound to grow in tandem with the growth of the real economy.  Indian economy’s growth has slowed down to decade low growth of around 5 percent in previous fiscal, while the inflation based on Consumer Price Index (CPI) stood at 9.31percent in May. On the other hand, current account deficit (CAD) widened to record high of 6.7 percent of GDP in the third quarter of FY13.

In order to boost the economy’s growth, the government has taken various measures and has recently set up Cabinet Committee on Investment's (CCI) to accelerate the implementation of infrastructure projects and raise foreign direct investment in various sectors like retail and aviation. It also raised the import duty on gold to 8 percent to check the widening CAD. Further, to control the inflation, the central bank maintained a status quo at its recent policy meet and left key policy rates unchanged.

Referring to the financial sector development, RBI deputy governor has said that financial sector is going to expand, considerably and stressed the need to expand the presence of banking. He said that we need high banking technology and the new set of guidelines enabled large business houses and large commercial entities to set up banks, which fulfills our agenda of financial inclusion.

The CNX Nifty is currently trading at 5,610.75 down by 20.50 points or 0.37% after trading in a range of 5,617.05 and 5,570.25. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were DLF up by 3.07%, Hindalco Industries up by 2.76%, BPCL up by 2.35%, Indusind Bank up by 2.33% and Bharti Airtel up by 2.20%. On the flip side, NMDC down by 3.11%, Lupin down by 2.32%, HCL Tech down by 1.92%, Axis Bank down by 1.84% and Tata Motors down by 1.80% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite tumbled 2.40%, Jakarta Composite crumbled 0.29%, Nikkei 225 clobbered 0.72%, KOSPI Composite Index decreased 1.02%, KLSE Composite dropped 0.36%, and Taiwan Weighted was down by 1.22%.

On the flip side, Hang Seng up by 0.36% and Straits Times up by 0.52%.