Markets hold positive terrain despite high WPI inflation for July

Indian equity benchmarks continued trade in positive territory in the late afternoon session amid buying in metal and auto shares. The auto stock has outperformed the market by surging 12% in past four trading sessions on the back of robust performance of the sector for the quarter ended June 30, 2013. However, markets came down from their intra-day high level as more than expected Wholesale Price Index (WPI) inflation for the month of July weighted on the investors’ sentiments. WPI inflation surged to 5.79% in July from 4.86% recorded in the previous month. Further, investors’ sentiments were also dented by global financial services firm Credit Suisse, which revised lower the India’s economic growth forecast for the FY14 to 6 percent from 6.5 percent projected earlier. On stock specific, Tata Motors, Tata Steel, Hindalco Ind and Sterlite Inds were trading 3 percent higher. Meanwhile, the market breadth was favoring the positive trend; there were 1123 shares on the gaining side against 929 shares on the losing side, while 135 shares remained unchanged. On the global front, most of Asian markets were trading in green.

The BSE Sensex is currently trading at 19288.28 up by 58.44 points or 0.30% after trading in a range of 19,313.98 and 19203.63. There were 18 stocks advancing against 12 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.75%, while Small cap index up by 0.49%.

The top gaining sectoral indices on the BSE were, Metal up by 2.85%, Auto up by 2.70%, Consumer Durables up by 2.69% and PSU up by 1.17%. While, FMCG down by 0.37% and Capital Goods down by 0.01% were the only loser indices on the BSE.

The top gainers on the Sensex were Tata Motors up by 6.94%, Tata Steel up by 5.76%, Hindalco Inds up by 3.77%, Sterlite Inds up by 3.02% and Gail India up by 2.15%.

On the flip side, HDFC down by 1.59%, HDFC Bank down by 1.53%, Dr. Reddys Lab down by 1.27%, ITC down by 0.87% and BHEL down by 0.74% were the top losers on the Sensex.

Meanwhile, The Comptroller and Auditor General (CAG), the government auditor, has warned the ministry of road transport and highways for lack of monitoring and expenditure control and said that during the years 2009-12, though supplementary grants were obtained in anticipation of higher expenditure but the total expenditure was less than even the original grants.

As per the CAG report, in the year 2009-10, the original provision was of Rs 1,460 crore alongwith the supplementary grant of Rs 156 crore, but the total expenditure was Rs 1,304.26 crore. Further, in the year 2011-12, original provision for NHAI was Rs 10,342.89 crore, and supplementary grant was Rs 731.37 crore, while, the road ministry spent 8,879.89 crore. The entire supplementary grant remained unspent which as per CAG showed lack of monitoring and expenditure control.

CAG report stressed that road ministry received large supplementary grants indicating that it did not prepare original estimates of expenditure on a realistic basis. Further, the report added that earlier in March, the Ministry of Finance has restricted the expenditure by ministries, contrary to this, a huge expenditure was made in the month of March. An expenditure of Rs 8,632 crore was incurred on March 31, 2012, it added.

The performance in road development has remained much below the target over the past few years. Previous year Road ministry had set an ambitious target of awarding 8,800 km of road length in fiscal 2013, however, it was able to award only 1,112 km projects. For this fiscal, the road ministry has set a target of awarding 9,000 km projects, about 50% through the EPC (engineering procurement and construction) route.

The CNX Nifty is currently trading at 5,721.35 up by 22.05 points or 0.39% after trading in a range of 5,723.90 and 5,690.20. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Tata Motors up by 7.07%, Tata Steel up by 5.65%, Hindalco Inds up by 3.72%, NMDC up by 3.44% and Sesa Goa up by 2.79%. On the flip side, HDFC Bank down by 1.60%, Grasim down by 1.44%, HDFC down by 1.36%, Dr Reddys Lab down by 1.17% and Reliance Infra down by 1.13% were the major losers on the index.

The most of Asian equity indices were trading in green; Straits Times up by 0.11%, Shanghai Composite up by 0.15%, Jakarta Composite up by 0.49%, Seoul Composite up by 10.88 points or 0.57% and reached 1923.91, Nikkei 225 was up by 1.32%. While, Taiwan Weighted down by 0.44% and KLSE Composite down by 0.13%.