Benchmarks continue seesaw trade; broader markets under pressure

Indian equity benchmarks witnessing see-saw trade and currently hovering near yesterday’s closing value in the late morning session amid weak global cues. The 30-share BSE Sensex gained 8 points, while the 50-share NSE Nifty trades in red holding 5,100 mark. Present listless trade in the market is because of weak trend in global markets amid renewed concerns about the financial situation in Europe, worries about high inflation and declining growth and some discouraging results from India companies. On sectoral front, realty stocks were mostly trading lower. Bank, oil, FMCG and power stocks were trading weak. Healthcare, auto, capital goods and metal stocks were showing some support. However, Cipla is trading higher by 5% on impressive quarterly results. The pharma major has posted a net profit of Rs 308.97 crore for the quarter ended September 30, 2011 as compared to Rs 263.01 crore for the quarter ended September 30, 2010. Tata Power, which crashed 7% in the opening trade, showed good recovery. It was down just 3% as the company consolidated loss of Rs 1,219 crore in Q2FY12 versus profit of Rs 673 crore in the corresponding quarter of last fiscal. On the global front, Asian stocks were trading lower on feeble global economic scenario. Back home, the market breadth favoring the negative trend; there were 713 shares on the gaining side against 1,705 shares on the losing side while 96 shares remained unchanged.

The BSE Sensex is currently trading at 17,127.67, up by 8.93 points or 0.05%. The index has touched a high and low of 17,172.09 and 17,034.07 respectively. There were 14 stocks advancing against 14 declining ones on the index and two remained unchanged.

The broader indices too were down and out in red; the BSE Mid cap and Small cap indices declined 0.92% and 1.03% respectively.

The top gaining sectoral indices on the BSE were, HC up by 0.29%, Auto up by 0.22%, CG up by 0.03% and Metal up by 0.02%. While, Realty down by 2.49%, Power down by 0.65%, Oil & Gas down by 0.31%, FMCG down by 0.27% and Bankex down by 0.23% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 5.97%, Tata Motors up by 1.85%, Jindal Steel up by 1.43%, ONGC up by 1.24% and HDFC Bank up by 1.23%.

On the flip side, Tata Power down by3.18%, DLF down by 3.05%, Tata Steel down by 0.96%, Hero MotoCorp down by 0.90% and JPO Associate down by 0.87% were the top losers on the Sensex.

Meanwhile, undeterred by last week’s Moody's decision to lower the Indian banking sector’s outlook to ‘negative' from ‘stable’ after the global rating agency felt that slow global economic growth could impact the sector's profitability, the finance ministry on Monday has asked Moody's to upgrade the country's rating, at least two notches higher than the present grade, as there was a marked improvement in its basic economic parameters in the past few years.

A delegation of finance ministry officials led by Department of Economic Affairs Secretary, R Gopalan after a meeting with Moody's representatives  said that ‘Moody's should take a fresh look at the long-term credit strengths of the Indian economy and consider a long due credit rating upgrade for India's sovereign rating,’ The official said that high savings and investment ratio, favourable demographics, infrastructure development and a stable democratic polity were good for India's long-term growth prospects. The meeting was also attended by the Chief Economic Adviser to the Ministry, Dr Kaushik Basu, and officers from the Ministries of Finance, Power, Fertiliser and Petroleum and Natural Gas.

R Gopalan asked Moody's to revise India's rating to Baa1, two notches above its current rating. The rating agency had last upgraded India's rating to ‘Baa3’ (with stable outlook) in 2004. Baa3 means medium grade with moderate credit risk. Besides, Moody's had assigned a ‘Ba1' with a positive outlook rating to India's local debt.

‘India has low external debt-to-GDP ratio, high foreign exchange reserves, deep domestic capital markets and diversified domestic holdings of sovereign debt. It outperforms its ‘Baa' peers on these indicators,’ he added.

In the meeting, the finance ministry officials told the rating agency about the policy measures taken by the government, such as fuel price hike, clearing 51 per cent FDI in multi-brand retail by the Committee of Secretaries and raising of FII investment limit in infra bonds to $25 billion.

The S&P CNX Nifty is currently trading at 5,141.00, down by 7.35 points or 0.14%. The index has touched a high and low of 5,158.75 and 5,120.70 respectively. There were 19 stocks advancing against 30 declines on the index and one remained unchanged.

The top gainers of the Nifty were Cipla up by 5.90%, Tata Motors up by 2.22%, IDFC up by 1.55%, Jindal Steel up by 1.39% and Reliance Power up by 1.31%.

On the flip side, Tata Power down by 3.95%, DLF down by 3.27%, BPLC down by 2.44%, Siemens down by 2.27% and Ranbaxy down by 2.09% were the major losers on the index.

All the Asian peers were trading in the red; Shanghai Composite declined 0.03%, Hang Seng plunged 1.07%, Jakarta Composite slipped 0.67%, KLSE Composite inched lower by 0.01%, Nikkei 225 lost 0.69%, Straits Times knocked down by 0.29%, Seoul Composite was down by 0.86% and Taiwan Weighted too lost 0.46%.