Benchmarks continue to trade flat in afternoon session

Indian equity benchmarks continued to trade flat in afternoon session amid selling witnessed in rate sensitive stocks such as banking and metal as the Reserve Bank of India governor Raghuram Rajan demolished expectations that central bank has shifted focus from inflation management to growth. Domestic institutional investors (DIIs) have sold more Indian stocks in 2013 at around Rs 73,190.39 crore till December, the highest selling mark till 2004. Investors also opted to remain on sidelines from piling up positions in risky assets ahead of December series F&O expiry. Meanwhile, selling witnessed in metal and banking stocks was offset by the gains in healthcare, capital goods. Healthcare was the top gainer on BSE up by 1.03% followed by consumer durables and capital goods stocks both up by over 0.60%. On stock specific movement, Bajaj Auto, BHEL and L&T were trading up by over 1.20%, while, SSLT, Tata Power and Maruti Suzuki were trading down by over 1.40% on BSE.

Among other stocks, Alstom T&D India, extending its 4% gain in past two trading sessions, moved higher by around 5% to nearly Rs 201, after the company said it has received two orders worth Rs 298 crore for supplying equipment for power stations in Himachal Pradesh. Shares of Aurobindo Pharmaceuticals continue its upward march with the stock touching a new high on the BSE.

On global front, Asian markets were trading mixed with Shanghai Composite up by 0.08%. while, Jakarta Composite down by 0.11%. Tokyo's Nikkei sped to a six-year peak, adding about 0.8% and trading near 16,000-mark, driven by buying from long-only investors after Wall Street marched upwards. Back home, the NSE Nifty and BSE Sensex were trading up their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,085 stocks traded 1,227 stocks advanced, while 731 stocks declined on the BSE.  

The BSE Sensex is currently trading at 21,098.66 down by 2.37 points or 0.01% after trading in a range of 21,156.92 and 21,073.09. There were 18 stocks advancing against only 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.68%, while Small cap index up by 0.95%.

The gaining sectoral indices on the BSE were Heathcare up by 1.03%, Capital Goods up by 1.01%, Consumer Durables up by 0.60%, Realty up by 0.45% and Teck up by 0.22%. While Metal down by 1.15%, Bankex down by 0.20% and FMCG down by 0.02% were losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.40%, BHEL up by 1.36%, L&T up by 1.22%, NTPC up by 0.80% and M&M up by 0.77%. On the flip side, SSLT down by 2.50%, Tata Power down by 2.30%, Maruti Suzuki down by 1.49%, Wipro down by 1.13% and HDFC down by 0.97%.

Meanwhile, demolishing expectations that central bank has shifted focus from inflation management to growth, the Reserve Bank of India (RBI) governor Raghuram Rajan has said that keeping fight with high inflation will remain at the top of agenda and call on raising interest rates will be taken after factoring more macro-economic data particularly inflation and industrial growth. The RBI in its monetary policy review on December 18 has kept key policy rates unchanged citing that continued weakness in industrial activities and subdued domestic demand have become headwinds to domestic economic growth, therefore, it has become imperative to revive the stalled investment.

By adding further, Rajan has asserted that targeting inflation does not mean that the central bank will not pay attention to economic growth. The level of growth in the economy tells how much disinflation is already in the system.  The RBI wants to contain WPI inflation within the limit of four to five percent. Rising inflation in the country has become a concern for the Reserve Bank of India (RBI), which has been continually raising the policy rates over the past few months in order to trim the inflation.

Meanwhile, wholesale inflation accelerated to 14-month high of 7.52% in the month of November on y-o-y basis as against 7% in October. High inflation in the country is mainly driven by food inflation, which is particularly due to the poor supply side infrastructure and storage facilities in India and thus can be tackled only by easing supply side bottlenecksThe CNX Nifty is currently trading at 6,289.10 up by 4.60 points or 0.07% after trading in a range of 6,301.50 and 6,278.15. There were 27 stocks advancing against 23 declining on the index.

The top gainers of the Nifty were Ranbaxy up by 3.91%, BPCL up by 1.97%, Lupin up by 1.92%, Ambuja Cement up by 1.89% and ACC up by 1.81%. On the flip side, SSLT down by 2.63%, Tata Powers down by 2.36%, Jindal Steel down by 1.57%, Maruti Suzuki down by 1.40% and Hindalco down by 1.17% were the major losers on the index.

The Asian equity indices were trading mixed; Hang Seng up by 1.13%, Seoul Composite up by 0.32%, KLSE Composite up by 0.24%, Straits Times up by 0.36% and Shanghai Composite up by 0.08%. While, Jakarta Composite down by 0.11%, Nikkei 225 down by 0.08% and Taiwan Weighted down by 0.07%