Benchmarks surrender their initial gains in late morning

Benchmarks surrendered their initial gains on some profit- booking in late Morning trade as investors opted for wait and watch approach ahead of TCS’ third quarter earnings scheduled to be announced later today. However, losses on down-side remained capped after the World Bank in its latest report highlighted that India’s economy is expected to grow by 6.2% in 2014 and 7.1 percent by 2016-17 as global demand recovers and domestic investment increases. Some support came in from Finance minister P Chidambaram expressing confidence of India getting on the high growth path in the next three years and attribute the decline in growth rate to global factors.

On the global front, most of the Asian equity benchmarks were trading in the green at this point of time after core machine orders in Japan jumped a seasonally adjusted 9.3 percent on month in November to 882.6 billion yen. The headline figure shattered forecasts for an increase of 1.1 percent following the 0.6 percent gain in October. Back home, traders were buying, Metal, Capital Goods and Power while, selling was seen in FMCG, Teck and Auto on the BSE.  Telecom stocks were trading under pressure on expecting aggressive bidding for the forthcoming 2G auction after the entry of Reliance Jio Infocomm (RJI), the telecom arm of Reliance Industries. The auction would start from February 3 and including Reliance Jio there are eight companies in the fray.

The market breadth on BSE remains negative with advances to declines in the ratio of 850:886. BSE Sensex and NSE Nifty were comfortably trading near their psychological 21,200 and 6,250 levels respectively. The BSE Sensex is currently trading at 21256.89 down by 32.60 points or 0.15% after trading in a range of 21379.29 and 21249.29. There were 17 stocks advancing against 13 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.33% and Small cap index gained 0.68%.

The top gaining sectoral indices on the BSE were, Metal up by 1.35%, Capital Goods up by 0.44%, Power up by 0.22% and Consumer Durables up by 0.12% while FMCG down by 0.67%, Teck down by 0.61%,  Auto down by 0.51%, Realty down by 0.42% and Oil & Gas  down by 0.29% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 2.27%, SSLT up by 1.47%, HDFC up by 1.30%, BHEL up by 1.23%, and Hindalco Inds up by 1.08%. On the flip side, Bharti Airtel was down by 4.34%, ONGC was down by 1.58%,  Mahindra & Mahindra was down by 1.36%, ITC was down by 0.87% and Sun Pharma was down by 0.67% were the top losers on the Sensex.

Meanwhile, Buoyant over the decline in Indian inflation, India Inc urged the Reserve Bank to lower interest rates to provide boost to the sluggish economic growth adding that prevailing high interest rates scenario in economy has been adversely impacting the growth of Indian industries. Indian industrial output registered the worst performance in six months with contraction of 2.1% in November on y-o-y basis as compared to 1.8% in October.

Meanwhile, the central bank had already noted the inflation fight to remain at its top of agenda and has been continually raising the policy rates over the past few months in order to trim the inflation. CII Director General Chandrajit Banerjee has noted that easing of inflation at a time when industrial growth continues to be in the red should induce RBI to cut policy rates to rejuvenate industry growth. WPI inflation eased to five-month low at 6.16% in December as compared to 7.52% in November and 7.31% during the corresponding month of the previous year.

Further, Assocham Secretary General D S Rawat asserted that although achieving a sustained moderation in WPI is an issue for the country, the recently released inflation number gives scope for cutting the interest rates in a bid to create to improve domestic supply response. The President of PHD Chamber of Commerce Sharad Jaipuria said that it is inevitable to reduce the repo rate to boost the industry sector growth as growth contracted by -0.2% during the period April-November 2013-14 from a year earlier owing to the high interest rates and prevailing economic downturn. 

The CNX Nifty is currently trading at 6,318.25 down by 2.65 points or 0.04% after trading in a range of 6,346.50 and 6,311.45. There were 30 stocks advancing against 20 stock declines on the index.

The top gainers of the Nifty were Jindal Steel up by 2.82%, Tata Steel up by 2.40%, HCL Tech up by 1.95%, SSLT up by 1.67% and Hindalco up by 1.35%. On the flip side, Bharti Airtel down by 4.21%, ONGC down by 1.68%, M&M down by 1.48%, Tata Motors down by 1.33%, and ITC down by 0.88% were the top losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.85 points or 0.04% to 2,024.20, Hang Seng increased 67.46 points or 0.29% to 22,969.46, Seoul Composite added 5.19 points or 0.27% to 1,958.47 and Taiwan Weighted was up by 14.34 points or 0.16% to 8,616.21. On the flip side, Nikkei 225 down by 70.90 points or 0.46% to 15,736.80, Jakarta Composite dipped 3.75  points or 0.08% to 4,437.84, KLSE Composite declined 9.40 points or 0.52% to 1,814.63 and Straits Times was down by 4.37 points or 0.14% to 3,138.03.