Markets remain choppy in narrow range

Indian equity markets languished in the red amid lackluster trade on the back of uncertainty in the economy and worries about near term growth. The Nifty is still struggling below 5720, while Sensex was down by 9.11 points. Investors were not ready to make any strong position after getting slaughtered from weak earnings and rupee volatility. In currency markets, rupee continued its southward journey against greenback amid dollar strength against other Asian currencies, following strong U.S. data, which raised the prospects of the Federal Reserve beginning to taper its monetary stimulus this year. Moreover, Reserve Bank has taken another step to rescue the rupee, yesterday by tightening hedging rules by making it mandatory for foreign institutional investors to obtain the consent of holders of participatory notes and derivative instruments before hedging. On sectoral front, information technology and consumer durables stocks were in demand. Power, PSU and metal stocks were trading weak.

On the global front, Asian stocks advanced on Friday after a report that U.S. manufacturing activity jumped last month, raising hopes of a rebound in industrial production that would bolster growth in the world's biggest economy. Back home, the market breadth was favoring the negative trend; there were 1112 shares on the losing side against 671 shares on the gaining side, while 122 shares remained unchanged.

The BSE Sensex is currently trading at 19,291.24 down by 25 points or 0.13% after trading in a range of 19,451.70 and 19,273.08. There were 10 stocks advancing against 20 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.36% and Small cap index lost 0.52%.

The top gaining sectoral indices on the BSE were, Consumer Durable up by 4.25%, IT up by 1.52% and Teck up by 1.27%. While Metal down by 3.65%, Power down by 3.03%, PSU down by 2.08% and FMCG down by 0.92%were the top losers indices on the BSE.

The top gainers on the Sensex were Wipro up by 2.95%, RIL up by 2.28%, TCS up by 1.57%, Infosys up by 1.41% and BHEL up by 1.10%. On the flip side, Jindal Steel was down by 8.31%, Coal India was down by 5.10%, Sterlite Inds was down by 4.05%, Hindustan Unilever was down by 3.15% and Tata Steel was down by 2.69% were the top losers on the Sensex.

Meanwhile, concerned over the rising bad loans of the banks, the Reserve Bank of India (RBI) governor D Subbarao has said that the central bank will take more measures to check non-performing assets (NPAs) of the public sector banks.

Subbarao said that rising NPAs of public sector banks is a growing concern for RBI and noted that NPAs in public sector banks are higher than private sector banks because their decision variables are different. The recently released Financial Stability Report (FSR) of RBI blamed seasonality factors for the higher slippages in the March quarter. The gross NPAs of the public sector banks (PSBs) stood highest at 3.8 percent of the assets at the end of the March quarter, followed by foreign lenders. However, the old private sector banks recorded the highest recovery during the period, at 21.2 percent, followed by PSBs at 9.1 percent.

The governor further said that it is important for credit to go to the productive sectors and the RBI is concerned about credit offered at reasonable rates to economically productive activities like agriculture, education loans and small and medium enterprises. Regarding the high cost of agriculture loan in the country, Subbarao said that the cost of credit is determined by the riskiness and banks have attached risk to agricultural loan and therefore, the cost is high.

The CNX Nifty is currently trading at 5,717.35 down by 10.50 points or 0.18% after trading in a range of 5,761.85 and 5,705.05. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 4.12%, ACC up by 3.36%, Ambuja Cement up by 2.99%, Indusind Bank up by 2.60% and Reliance up by 2.37%. On the flip side, Power Grid down by 14.24%, Jindal Steel down by 8.77%, Coal India down by 5.16%, Bank of Baroda down by 4.87% and BPCL down by 4.19% were the major losers on the index.

The Asian equity indices were trading in green; Shanghai Composite up by 0.01%, Hang Seng up by 0.50%, Jakarta Composite up by 0.08%, Nikkei 225 up by 3.29%, Seoul Composite up by 2.64 points or 0.14% to 1,923.38, Taiwan Weighted was up by 0.54%, KLSE Composite up by 0.23% and Straits Times up by 0.44% to 3257.71.