Indian markets trade flat in early deals on Monday

Paring all their initial gains, Indian equity benchmarks are trading flat in morning deals with frontline indices managing to keep their head barely above water. Markets pared most of their initial gains on the back of profit-taking in the software exporters amid caution ahead of the US Federal Reserve policy meeting and RBI policy review next week. However, sentiments remained up-beat as some support came in from Planning Commission Deputy Chairman Montek Singh Ahluwalia’s statement that Current Account Deficit is likely to be lower than the projection of 3.8 percent of the GDP and India will be in a better position to neutralise the impact of the tapering of monetary stimulus by the US Fed. Some boost also came in after Reserve Bank of India (RBI) said that it has no immediate plan to close the dollar-swap window for oil companies and it will be done in a calibrated manner.

Global cues too remained supportive with US markets ending higher on Friday on the back of some upbeat earnings reports. Moreover, most of the Asian markets too were trading in the green at this point of time with Japanese Markets trading higher in morning deals after Bank of Japan’s Governor Haruhiko Kuroda maintained an upbeat assessment of the economy, saying it is recovering moderately and will continue to do so.

Back home, on the sectoral front, realty witnessed the maximum gains in trades followed by capital goods and auto, while fast moving consumer durables, software and technology remained the top losers on the BSE sectoral space. The broader indices, however, outperforming benchmarks, while the market breadth on the BSE was positive; there were 966 shares on the gaining side against 359 shares on the losing side while 49 shares remain unchanged.

The BSE Sensex opened at 20915.76; about 32 points higher compared to its previous closing of 20882.89, and has touched a high and a low of 20970.92 and 20858.92 respectively. The index is currently trading at 20884.99, up by 2.10 points or 0.01%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a strong start with 70.31% stocks advancing against 26.13% declines. The broader indices were trading in green; the BSE Mid cap up by 0.84% and Small cap indices up by 0.98%. 

The top gaining sectoral indices on the BSE were, Realty up by 2.80%, Capital Goods up by 2.71%, Auto up by 1.60%, Health Care up by 0.85% and Metal up by 0.70%, while Consumer Durables down by 1.05%, IT down by 0.77%, Teck down by 0.51% and FMCG down by 0.34% were the top losers on the sectoral index.

The top gainers on the Sensex were Maruti Suzuki up by 3.91%, L&T up by 3.86%, Hindalco Industries up by 2.31%, Tata Motors up by 2.01% and Cipla up by 1.54%. On the flip side, TCS was down by 1.91%, HDFC Bank was down by 1.69%, HDFC was down by 1.37%, Jindal Steel was down by 1.33% and ITC was down by 0.88% were the top losers on the Sensex.

Meanwhile, the government has reduced the import tariff value of gold and silver to $418 per 10 gram and $699 per kg, respectively, in line with global rates of the precious metals, which could lead to some softening in the price of the precious metal. Tariff value or the base price is set to determine the customs duty on the precious metal and to prevent under invoicing. Earlier, tariff value was fixed at $436 per 10 gram for gold and $702 per kg for silver during the last fortnight. Further, the government’s move will provide some respite to consumers in ongoing festival season in the country.

However, rising gold import has become a cause of concern for the government as it remains second major factor after crude oil for widening the current account deficit (CAD) of the country. Indian CAD widened to a record high of 4.9 percent of GDP in the April-June quarter, 2013. The government has set target to contain country’s CAD at 3.7 percent of GDP for the current fiscal.

Meanwhile, the government’s measures to contain the gold imports have started yielding as imports of gold and silver plunged more than 80% to $0.8 billion in September from $4.6 billion a year earlier. Recently, apex bank has introduced 80/20 rule under which 20% of all gold imports by jewellers has to be re-exported. India’s gold import is likely to come down to between 800-850 tonnes from 950 tonnes in FY13 on the back of sharp hike in import duty by the government and restrictions by the RBI.

The CNX Nifty opened at 6,202.00; about 12 points higher as compared to its previous closing of 6,189.35, and has touched a high and a low of 6,218.95 and 6,186.35 respectively. The index is currently trading at 6,193.80, up by 4.45 points or 0.07%. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were DLF up by 4.83%, Maruti Suzuki up by 4.41%, L&T up by 3.85%, Ranbaxy up by 2.44% and Hindalco up by 2.35%. On the flip side, TCS down by 2.01%, Jindal Steel down by 1.49%, HDFC Bank down by 1.44%, HDFC  down by 1.39% and ITC down by 1.10% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite surged 24.77 points or 1.13% to 2,218.55, Hang Seng strengthened 136.88 points or 0.59% to 23,476.98, Jakarta Composite rose 16.76 points or 0.37% to 4,563.33, Nikkei 225 added 68.38 points or 0.47% to 14,629.92 and Straits Times was up by 2.48 points or 0.08% to 3,195.38.

On the flip side, KLSE Composite slipped 0.07 points to 1,799.52, Seoul Composite dipped 3.21 points or 0.16% to 2,049.19 and Taiwan Weighted was down by 25.64 points or 0.30% to 8,415.55.