Benchmarks trim initial gains in late morning trade

bout of volatility was witnessed on street as benchmarks slipped into a negative territory for a short while, however turned positive once again in late morning trade as investors remain wary of the near-term December 2013 derivatives expiry on Thursday. Market will remain closed on account of Christmas tomorrow.  However, broader markets continue to perform well boosted by market regulator Securities Exchange Board of India's (SEBI's) move to relax norms on trading of thinly-traded stocks. This will see many illiquid stocks shift to normal trading session from the periodic call auction window. Markets took support at lower levels and turned positive as Commerce and Industry Minister Anand Sharma highlighted that India will achieve the modest export target of $325 billion for the current fiscal but to enhance it substantially, the country needs to boost its manufacturing capability.

On the global front, all the Asian equity indices, barring Jakarta Composite, are trading with traction in early deals with Japanese markets gaining three fourth of a percent as a weaker yen triggering some hectic buying at several counters. Back home, traders were buying, Realty, Metal and Capital Goods while selling was seen in IT and Teck  on the BSE. The rate sensitive counters like, Banking and Realty remained under pressure as the RBI Governor Raghuram Rajan has said that fighting rising prices will continue to be its priority and a call on raising interest rates will be taken after factoring in more data. However, he said that the Reserve Bank will wait for next set of data on inflation and industrial growth before taking a call on interest rates. 

The market breadth on BSE remains positive with advances to declines in the ratio of 1103: 564. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,700 and 6,150 levels respectively. The BSE Sensex is currently trading at 21101.03 up by 21.31 points or 0.10% after trading in a range of 21207.89 and 21059.12. There were 15 stocks advancing against 15 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 1.26% and Small cap index gained 1.20%.

The top gaining sectoral indices on the BSE were, Realty up by 3.16%, Metal up by 1.52%, Capital Goods up by 1.30%, Power up by 0.93% and Bankex up by 0.80%, while IT down by 0.98% and TECK down by 0.83% were the only losers on the sectoral index.

The top gainers on the Sensex were Bajaj Auto up by 1.35%, L&T up by 1.16%, BHEL up by 1.09%, Dr Reddys Lab up by 0.81% and NTPC up by 0.80%. On the flip side, SSLT was down by 2.36%, Tata Power was down by 2.36%, Maruti Suzuki was down by 1.01%, HDFC was down by 0.94%, HDFC Bank was down by 0.84% were the top losers on the Sensex

Meanwhile, Amid rising concerns over the increasing inflation in the country, Chairperson of Commission for Agricultural Costs and Prices (CACP), Ashok Gulati expects that retail inflation in the country is likely to ease on the back of projected drop in food prices in coming months. The WPI inflation accelerated to a 14-month high of 7.52 percent in November, while retail inflation quickened to a high of 11.24 percent during the reported month, mainly on account of high food prices.

Ashok Gulati further added that vegetable prices will definitely come down and the prices of wheat and rice would also come down, if the government releases stocks. The government should liquidate 20 million tonnes of wheat and rice to contain rising prices as India has huge stocks of cereals. Referring to poor storage facilities in the country, CACP chairperson expressed the need for setting up sophisticated cold storages in the country. The Inflation in food articles rose by 19.93% on y-o-y basis in the reported month as against 18.19% in October owing to supply side constraints such as inadequate transportation system and poor storage facilities.

Furthermore, Ashok Gulati has stressed that processed foods should be encouraged to help the farmers and consumers and also made a pitch for free trade in vegetables with no export controls.

The CNX Nifty is currently trading at 6,294.20 up by 9.70 points or 0.15% after trading in a range of 6,301.50 and 6,278.15. There were 27 stocks advancing against 23 stock declines on the index. 

The top gainers of the Nifty were Ranbaxy up by 2.77%, ACC up by 2.36%, Ambuja Cements up by 2.34%, BPCL up by 2.19% and UltraTech Cement up by 1.45%. On the flip side, SSLT down by 2.46%, Tata Power down by 2.30%, Jindal Steel down by 1.53%, and NMDC down by 1.15%, were the top losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 14.89 points or 0.71% to 2,104.59, Hang Seng increased 257.99 points or 1.13% to 23,179.55, KLSE Composite jumped 4.36 points or 0.24% to 1,837.22, Nikkei 225 surged 113.51 points or 0.72% to 15,983.93, Straits Times strengthened 12.72 points or 0.41% to 3,128.94, Seoul Composite added 8.55 points or 0.43% to 2,005.44 and Taiwan Weighted was up by 10.75 points or 0.13% to 8,467.21.

On the flip side, Jakarta Composite was up by 4.73 points or 0.11% to 4,184.88.