Benchmarks trade in a narrow range; Nifty gyrates above 5950 level

Benchmarks after coming off the day’s high are trading in narrow-range as investors tracing regional counterparts have turned cautious approach ahead of Federal Reserve Chairman Ben Bernanke’s testimony before Congress, which might offer clues on whether the US central bank might reduce its bond purchases later this year. Meanwhile, in a positive sign, European markets have made a positive start, apparently on expectations that Federal Reserve Chairman Ben Bernanke will reiterate later in the day that US monetary policy is to stay accommodative. Closer home, benchmark indexes, Sensex and Nifty, trading at day’s low point are above their psychological 19,900 and 5,950 levels respectively.

Nevertheless, mood at D-street also remained upbeat after the government liberalized FDI limits in a dozen sectors, including allowing 100 per cent FDI in telecom and higher limits in state-of-the-art defence manufacturing to shore up foreign investments and boost the sagging economy, triggering buying by participants. On the BSE sectoral front, stocks from Fast Moving Consumer Goods, Consumer Durables and Information Technology counters were the prominent gainers, while those from Bankex, Metal and Public Sector Undertaking were the weak spells of the trade. Meanwhile, telecom stocks gained on approval for raising the foreign investment limit in the sector to 100 percent from the current 74 percent. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1012:965; while 149 shares remained unchanged.

The BSE Sensex is currently trading at 19923.34, up by 72.11 points or 0.36% after trading in a range of 19,979.65 and 19,881.19. The broader indices continued to trade in fine contour; the BSE Mid and Small cap indices were trading higher by 0.27% and 0.45% respectively.

The top gaining sectoral indices on the BSE were, FMCG up by 1.50%, Consumer Durables up by 1.46%, IT up by 1.00%, Power up by 0.92% and Teck up by 0.78%. While, Bankex down by 1.50%, Metal down by 1.24%, PSU down by 0.61%, Auto down by 0.48% were the top losers on the BSE.

Out of 30 share index, 15 stocks were on advancing side, while 15 were declining. The top gainers on the Sensex were ITC up by 2.15%, Wipro up by 1.90%, Dr Reddys Lab up by 1.85%, TCS up by 1.74% and NTPC up by 1.50%. On the flip side, Tata Steel  down by 1.93%, Tata Motors and Coal India were down by 1.63%, ICICI Bank down by 1.39% and Sterlite Industries down by 1.13% were the top losers on the Sensex.

Meanwhile, India’s gems and jewellery exports tumbled 41 percent to $2.3 billion in June, 2013 as compared to $4 billion in the corresponding month previous year mainly due to shortage of yellow metal and limited inventory in domestic market. The major reason behind the shortage of raw-material for jewellery manufacturing was the government's move to curb gold imports. Though, the industry is expected to get a sufficient raw-material supply for jewellery manufacturing as the shortage is a short-term phenomenon.

India imported around 830 tonnes of gold in 2012-13. The government hiked the import duty on gold thrice in a year and raised it recently by 2 per cent to 8 per cent to curb demand. Besides, RBI too has put restrictions on banks on importing gold. Gold imports in June too are projected to have plunged to around 31 tonnes as against 162 tonnes in May and 141 tonnes in April. High imports strain the Current Account Deficit (CAD), which hit a record high of 4.8 per cent in the 2012-13 fiscal.

Meanwhile, jewellery exports declined 73 per cent as there were no outbound shipments of gold medallions and coins in June 2013. However, silver jewellery exports were up 52 per cent and outward shipments of cut and polished diamonds jumped about 22 per cent. On cumulative basis, the gems and jewellery exports declined 13.2 per cent year-on-year to $8.5 billion during April-June 2013.

India is the largest importer of gold which is mainly utilised to meet demand of the jewellery industry and the major markets for the country’s jewellery exports are the US, Europe, Middle-East, Hong Kong and Japan.

The CNX Nifty is currently trading at 5,967.45, up by 12.20 points or 0.20% after trading in a range of 5,989.80 and 5,962.60.

Out of the 50 share index, 23 stocks were on advancing side and 26 were declining one’s, while 1 share remained unchanged. The top gainers of the Nifty were Ambuja Cements and ITC up by 2.17%, Asian Paint up by 2.15%, UltraTech Cements up by 1.97% and Dr Reddy’s Lab up by 1.95%. On the flip side, Axis Bank down by 3.32%, Tata Steel down by 2.23%, Cairn India down by 1.95%, Tata Motors down by 1.90% and Coal India down by 1.88% were the major losers on the index.

Most of the Asian equity indices were trading mixed; Shanghai Composite declined 0.83%, KLSE Composite slipped 0.02%, Straits Times decreased 0.35% and Taiwan Weighted was down by 0.01%.

On the flip side, Hang Seng rose 0.10%, Jakarta Composite increased 0.52%, Nikkei 225 up by 0.11%, and Seoul Composite was up by 1.13%.

European markets have got a positive opening; with CAC 40 adding 0.41%, DAX rising 0.13%, FTSE 100 gaining 0.20%.