Benchmarks recover after paring initial gains

Indian equity markets pared initial gains but recovered soon to continue to trade above neutral line in the late afternoon session amid bouts of profit booking and optimistic buying in front line counters and taking cues from European counterparts. The sentiments were cautious after Fitch ratings stated that it is getting more challenging for India to meet its fiscal deficit target in the current fiscal year ending March 2014 with revenues slowing. The rating agency is also monitoring India's growth, inflation, public finances and the current account deficit and its funding. Fitch has a stable outlook on the ‘BBB-‘ sovereign credit ratings. Traders were seen piling position in Power, Metal and IT stocks while selling was witnessed in Oil & Gas, Bankex and Auto sector stocks. In scrip specific development, VIP Industries, the country’s largest luggage maker, was trading firm after ace investor Rakesh Jhunjhunwala increased his stake in the company. Gujarat Pipavav Port was trading in green after foreign brokerage firm CITI maintained a buy rating on the stock. IDFC was trading in red after RBI notified the decrease in FII limit in the company to 54% from 74%.

On the global front, most of the Asian markets were trading in green while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,450 and 18,500 levels respectively. The market breadth on BSE was positive in the ratio of 1173:936, while 140 scrips remain unchanged. 

The BSE Sensex is currently trading at 18566.80, up by 47.36 points or 0.26% after trading in a range of 18728.19 and 18488.93. There were only 20 stocks advancing against 10 declines on the index.

The broader indices continued to trade firmly; the BSE Mid cap and Small cap index were up by 0.59% and 0.78% respectively.

The top gaining sectoral indices on the BSE were, Power up by 1.62%, Metal up by 1.62%, IT up by 1.22%, Health Care up by 1.11% and TECK up by 1.01% while, Oil & Gas down by 0.88%, Bankex down by 0.85% and Auto down by 0.42% were the top losing indices on the BSE.

The top gainers on the Sensex were, BHEL up by 4.82%, NTPC up by 3.14%, Wipro up by 2.81%, Hindalco Industries up by 2.80% and Sterlite Industries up by 2.56%. On the flip side, Gail India down by 3.43%, ICICI Bank down by 2.52%, ONGC down by 2.40%, Mahindra & Mahindra down by 1.53% and Tata Motors down by 1.50% were the top losers on the Sensex.

Meanwhile, the per capital income, measured by net national income (NNI) has been increased by 6.7 percent per annum, while the percentage of poor declined by 2.2 percent during the period 2004-05 to 2011-12 on the back of rising Indian economy, which grew at an average of  8 percent per annum over the period of past few years.

In 2011-12, the government has decided the poverty line in terms of monthly per capita consumption expenditure at Rs 816 in rural areas and Rs 1,000 in urban areas. On state wise, Uttar Pradesh had highest number of people living below poverty line during 2011-12 at 598.19 people out of every lakh. followed by Bihar at 358.15 people (per lakh), Madhya Pradesh 234.04 people, Maharashtra 197.92 people and West Bengal at 184.98 people living below the poverty line.

Meanwhile, the 12th Five Year Plan (2012-17) has stated the need for faster, sustainable and more inclusive growth in the country to reduce economic disparities. Further, the government expects that the growing Indian economy will result in decreasing the percentage of poor in India in coming future.

The CNX Nifty is currently trading at 5,482.65, up by 10.90 points or 0.20% after trading in a range of 5,528.70 and 5,454.45. There were 35 stocks advancing against 15 declines on the index.

The top gainers of the Nifty were , and Ranbaxy Laboratories up by 6.56%, BHEL up by 5.73%, Sesa Goa up by 5.65%, Ambuja Cement up by 3.42% and JP Associates up by 3.25%. On the flip side, IDFC down by 7.61%, Gail India down by 3.64%, Axis Bank down by 3.52%, ICICI Bank down by 2.64% and Lupin down by 2.36% were the major losers on the index.

Most of the Asian equity indices were trading in green; KLSE Composite up by 0.33%, Taiwan Weighted up by 0.28%, Seoul Composite up by 0.95%, Hang Seng up by 0.65% and Shanghai Composite up by 1.90%.

On the other hand, Nikkei 225 was down by 0.18%, Straits Times inched lower 0.02% and Jakarta Composite drop 0.77% was the losers amongst Asian pack.

The European markets were trading in red; France’s CAC 40 was down 0.58% and Germany’s DAX slipped 0.36%. Meanwhile, UK market was shut on account of ‘Summer Bank holiday’.