Benchmarks trade in narrow range after recovering from day’s low; broader indices pare some losses

After recovering from day’s low, benchmark equity indices now are trading range-bound, cautiously awaiting opening of European markets which is likely to be negative. However, some recovery has crept into the markets after the benchmarks slipped to day’s low as investors picked up fundamentally strong bets available at attractive valuations. Off day’s low, Sensex and Nifty are holding above the crucial 20,400 and 6,050 levels, albeit with loss of over one percent. Meanwhile, broader indices too witnessing some recovery have trimmed some portion of their losses.

On the global font, Asian shares fell on Thursday after strains in emerging markets returned with a vengeance and the Federal Reserve stepped back on its stimulus, sending investors scurrying to the safety of bonds and yen. After a two-day meeting, the last to be headed by outgoing chairman Ben Bernanke – the Fed announced a $10bn cut to its $75billion-a-month bond-buying programme, known as quantitative easing (QE).

Closer home, recovery at Dalal Street was led by stocks belonging from Consumer Durable counter, which was trading in green, albeit with slender gains of over one tenth of a percent. Additionally, fertilizer stocks, Chambal Fertilisers & Chemicals, Rashtriya Chemicals & Fertilizers and National Fertilizers gained traction after Group of Ministers okayed the proposal to hike fixed cost of Urea by Rs 350 per tonne. On the flip side, Realty, Metal and Bankex counters were the top laggards of the session. The overall market breadth on BSE is in the favour of declines which outnumbered advances in the ratio of 1525:621; while 113 shares remained unchanged.

The BSE Sensex is currently trading at 20433.73, down by 213.57 points or 1. 03%, after trading in a range of 20,501.92 and 20,399.24. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices pared some of its losses; the BSE Mid cap index was down by 1.07%, while Small cap index down by 1.30%.

Selling pressure seems to have eased a bit, with Consumer Durable counter rebounding in green with gain of 0.17%. On the flip side, Realty down by 2.63%, Metal down by 2.45%, Bankex down by 2.06%, Capital Goods down by 0.94% and FMCG down by 1.73% were the top losing sectoral indices on the BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.06%, Gail India up by 1.56%, Tata Motors up by 1.12%, M&M up by 0.38% and ONGC up by 0.11%. On the flip side, SSLT down by 4.77%, Hindalco Inds down by 2.73%, Tata Steel down by 2.63%, Hero Moto Corp down by 2.24% and Axis Bank down by 2.12%.

Meanwhile, justifying RBI’s surprising move of hiking key policy rates by 25 basis points, Deputy Chairman of Planning Commission Montek Singh Ahluwalia underscored that bringing down inflation remains country’s top priority and RBI’s third quarter monetary policy is just reiteration of its commitment of bringing down inflation.

Further, batting on behalf of RBI, he stated that RBI clearly wants to send a signal that it was not taking inflation lightly, also as short-term lowering of repo rates would not make a long-term difference. He also added that interest rates would reduce only with a decline in inflation, which must be high on the priority list.

However, on Rajan’s expectations of economy growth below 5 per cent in the current financial year, Ahluwalia said that it was bit premature to come to any conclusion that GDP growth rate for 2013-14 could be below 5 per cent.  

The CNX Nifty is currently trading at 6,057.35, down by 62.90 points or 1.03% after trading in a range of 6,072.95 and 6,044.40. There were 9 stocks advancing against 41 declining on the index.

The top gainers of the Nifty were Bharti Airtel up by 1.99%, Gail up by 1.72%, Lupin up by 1.22%, Tata Motors up by 1.04% and M&M up by 0.35%. On the flip side, SSLT down by 4.70%, Bank of Baroda down by 3.82%, Ranbaxy down by 3.35%, Asian Paints down by 3.08% and JP Associates down by 2.93% were the major losers on the index.

The Asian equity indices were trading in red; Jakarta Composite down by 0.61%, Shanghai Composite down by 0.56%, Nikkei 225 down by 2.45%, Straits Times down by 0.01%. Markets in South Korea and Taiwan are closed for national holidays.