Markets trade flat in early deals on Thursday

Shrugging off firm global cues, Indian equity benchmarks are trading cautiously in early deals on Thursday as investors remained concerned after the World Bank revised India's economic growth forecast downwards for the current financial year to 4.7 percent from 6.1 percent projected in April, citing two consecutive months of negative business sentiment and higher interest rates. However, some support to the markets came in from the Reserve Bank of India’s governor Raghuram Rajan’s statement that India’s economy will pick up by year-end mainly due to the start-up of billions of dollars worth of stalled resource projects and a good monsoon season that will bolster agricultural production.

Global cues too remained supportive with US markets ending higher overnight, while Asian markets rallied in early deals after the Senate reached an agreement to increase the debt limit and ended the 16-day government shutdown. Meanwhile, Japanese Nikkei surged over a percent buoyed by a strong close on Wall Street overnight. The dollar’s rise to the 99 -en range too contributed significantly to the gains in the Japanese market.

Back home, some strength also came in after Planning Commission estimated that the current account deficit for 2013-14 will be around 2.5 percent of GDP, much lower than Finance Minister P. Chidambaram’s target of 3.7 percent of GDP. On the sectoral front, fast moving consumer goods witnessed the maximum gain in trade followed by oil and gas and consumer durables, while capital goods, software and banking remained the top losers on the BSE sectoral space. The broader indices too were outperforming benchmarks, while the market breadth on the BSE was positive; there were 739 shares on the gaining side against 431 shares on the losing side while 60 shares remain unchanged.

The BSE Sensex opened at 20579.56; about 31 points higher compared to its previous closing of 20547.62, and has touched a high and a low of 20605.93 and 20471.25 respectively. The index is currently trading at 20571.44, up by 23.82 points or 0.12%. There were 22 stocks advancing against 8 declines on the index.

The overall market breadth has made a strong start with 60.08% stocks advancing against 35.04% declines. The broader indices were trading in green; the BSE Mid cap up by 0.54% and Small cap indices up by 0.34%. 

The top gaining sectoral indices on the BSE were, FMCG up by 1.48%, Oil & Gas up by 1.24%, Consumer Durables up by 1.23%, Metal up by 1.11% and Realty up by 1.00%, while Capital Goods down by 0.95%, IT down by 0.94%, Bankex down by 0.61%, Teck down by 0.52% and Auto down by 0.24% were the top losers on the sectoral index.

The top gainers on the Sensex were Bajaj Auto up by 2.35%, Hindustan Unilever up by 1.82%, Tata Steel up by 1.64%, Bharti Airtel up by 1.61% and ONGC up by 1.60%. On the flip side, Tata Motors was down by 2.70%, TCS was down by 2.57%, L&T was down by 1.83%, ICICI Bank was down by 1.25% and HDFC Bank was down by 0.98% were the top losers on the Sensex.

Meanwhile, as per the Confederation of Indian Industry (CII) survey, Indian economic growth is likely to remain below 5 percent in the current fiscal. CII survey, based on the assessment of CEOs, indicated that ongoing economic slowdown has weighed down the confidence of India Inc as 42 percent of the respondents expected the economy to grow in the range of 4.5 to 5 percent. Further, 65 percent of the respondents expect that economic growth recovery will not take place before the second quarter of next fiscal.

Indicating that Indian economy is moving towards a situation of stagflation, the survey added that majority of the respondents (42 percent of CEOs) expected inflation to increase moderately in the second half of the year. Referring to the domestic currency, 53 percent of the respondents expected the rupee to prevail below 62 per dollar by the end of the current fiscal with current account deficit easing. Moreover, political uncertainty was ranked as the highest risk factor in coming future, affecting the business confidence of India Inc.

Regarding the country’s infrastructure sector, 56 percent of the respondents did not feel that the recently set up Cabinet Committee on Investment (CCI) had raised investments so far at the ground level. Meanwhile, in order to revive investment demand, industry body expressed the need for strengthening policy intervention by both the government as well as RBI, adding that the government should focus on stepping up capital expenditure whereas RBI should adopt a softer monetary stance.

The CNX Nifty opened at 6,098.50; about 9 points higher as compared to its previous closing of 6,089.05, and has touched a high and a low of 6,101.65 and 6,064.85 respectively. The index is currently trading at 6,085.60, down by 3.45 points or 0.06%. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were JP Associate up by 2.99%, Ranbaxy up by 2.35%, Bajaj-Auto up by 2.14%, Cairn up by 2.09% and Hindustan Unilever up by 1.87%. On the flip side, Tata Motors down by 2.65%, TCS down by 2.53%, HCL Tech down by 2.27%, L&T down by 2.09% and IndusInd Bank down by 1.95% were the major losers on the index.

The Asian equity indices were trading in green; Shanghai Composite rose 10.91 points or 0.50% to 2,203.99, Hang Seng gained 53.39 points or 0.23% to 23,281.72, Jakarta Composite surged 26.79 points or 0.60% to 4,519.05, KLSE Composite strengthened 7.15 points or 0.40% to 1,798.52, Nikkei 225 soared 158.94 points or 1.10% to 14,626.08, Straits Times increased 26.49 points or 0.83% to 3,200.52, Seoul Composite added 6.87 points or 0.34% to 2,041.48 and Taiwan Weighted was up by 38.66 points or 0.46% to 8,370.84.