Markets trade flat in early deals amid weak global cues

Indian equity benchmarks are trading flat in early deals on Thursday tracking weak global cues. Overnight, US markets made a mixed closing amid a quiet day on the US economic data front and traders concentrated on earnings news. Asian markets too were trading mostly lower at this point of time after activity in China’s factory sector contracted in January for the first time in six months, pointing to a weak start for the economy in 2014 as policymakers seek to curb high debt levels to head off financial risks.

However, markets managed to pare some of their initial losses as some support came in with finance minister P Chidambaram’s assurance to global investors that India is prepared to face the impact of the US Fed tapering and the country is poised to clock 5% growth in 2013-14 and over 6% in 2014-15. Sentiments also remained up-beat with a Moody’s Analytics report that the Indian economy has started to turn the corner and the worst may be over for the Indian economy. It further said that a Narendra Modi-led BJP government, if elected, should offer a more business-friendly policy that will further support confidence and investment.

Meanwhile, shares of Mahindra & Mahindra Financials slumped by nearly 6% after third quarter earnings were impacted on account of worsening asset quality and higher provisions impacted profitability. However, shares of Larsen & Toubro was up nearly 3% in early trades as the company’s margins witnessed expansion during the third quarter ended December post the demerger of its hydro carbon business.

On the sectoral front, capital goods, healthcare and consumer durables remained the top gainers on the BSE sectoral index, while software, metal and technology remained the top losers. The broader indices too were struggling to get some traction, while the overall market breadth on BSE is in the favour of advances which thumped decliners in the ratio of 806:636; while 75 shares remained unchanged.

The BSE Sensex opened at 21319.69; about 17 points lower compared to its previous closing of 21337.67, and touched a high and a low of 21355.34 and 21264.71 respectively.

The index is currently trading at 21340.47, up by 2.80 points or 0.01%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a strong start with 53.13% stocks advancing against 41.92% declines. The broader indices too were trading mixed; the BSE Mid cap index down was by 0.13% and Small cap gained 0.38%. 

The top gaining sectoral indices on the BSE were, Capital Goods up by 2.18%, Healthcare up by 0.56%, Consumer Durables up by 0.36% and Power up by 0.19%, while IT down by 0.66%, Metal down by 0.57%, Oil & Gas down by 0.49%, Teck down by 0.48% and PSU down by 0.41% were the top losers on the sectoral index.

The top gainers on the Sensex were L&T up by 3.25%, Sun Pharma up by 1.83%, Bharti Airtel up by 1.21%, BHEL up by 0.97% and Tata Motors up by 0.66%. On the flip side, Mahindra & Mahindra was down by 2.10%, ONGC was down by 1.55%, Wipro was down by 1.50%, TCS was down by 1.21% and  Bajaj Auto was down by 1.16% were the top losers on the Sensex.

Meanwhile, after approving several long-stalled investment projects worth Rs 1.5 lakh crore in the first three weeks, the new environment and forest minister Veerappa Moily stated that 55 other projects facing environmental approval backlog to be cleared by mid-February. In order to ensure more predictability for prospective investors, Moily, who is also the Oil Minister, has asserted the need for quick decision-making in environmental clearance and stated that environment ministry will clear all pending projects in the next 20 days.

Among various approved projects, Veerappa Moily has cleared the Posco project, which had been pending for 8 years. South Korean giant Posco got environmental clearance on January 7 to build the Rs 52,000-crore steel plant in Odisha, the largest foreign direct investment (FDI) in India. However, Vedanta's Niyamgiri project was rejected due to the opposition by the majority of village bodies.

Presently, the forest clearance procedures are considered by industry as the single-biggest drag on India's investment momentum. Meanwhile, the government is hopeful of putting in place a simplified forest clearance system before its term ends in a few months. In order to bring comprehensive policy for inspection, verification and monitoring in the forest clearance procedure, the Environment Ministry has kicked off a fast-track review of the cumbersome procedures involving green clearances that often take years. Now, the ministry has sought for India Inc's views on its revised draft policy to grant of forest clearance.

The CNX Nifty opened at 6,325.95; about 13 point lower as compared to its previous closing of 6,338.95, and has touched a high and a low of 6,342.90 and 6,316.40 respectively. The index is currently trading at 6,335.30, down by 3.65 points or 0.06%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were L&T up by 3.29%, Sun Pharmaceuticals up by 1.82%, Cairn up by 1.26%, Bharti Airtel up by 1.24% and Tata Power up by 0.85%. On the flip side, M&M down by 2.24%, HCL Tech down by 1.93%, Wipro down by 1.89%, ONGC down by 1.76% and TCS down by 1.23% were the top losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite slipped 10.48 points or 0.51% to 2,041.27, Hang Seng declined 315.98 points or 1.37% to 22,766.27, KLSE Composite shed 3.44 points or 0.19% to 1,810.66, Nikkei 225 dipped 7.28 points or 0.05% to 15,813.68, Straits Times decreased 19.41 points or 0.62% to 3,114.33, Seoul Composite contracted 19.56 points or 0.99% to 1,950.86 and Taiwan Weighted was down by 22.01 points or 0.26% to 8,603.29.

On the flip side, Jakarta Composite was up by 10.94 points or 0.24% to 4,488.43.