Benchmarks continue to trade below neutral line in late morning

Indian equity benchmarks continued to trade sideways below the neutral line in late morning deals due to lack of supportive cues from global peers. Selling in heavyweights like RIL and ONGC too dampened the sentiments after the Election Commission asked the government to defer till the polls the doubling of natural gas prices. However, losses on down-side remained capped on Economic Affairs Secretary Arvind Mayaram’s statement that the Finance Ministry expects economic growth to further improve in the next fiscal on the back of better macro-economic fundamentals. Further, rupee appreciation against the US dollar also added to optimistic sentiments. On the global front, Asian markets were trading mostly in red as investors weighed the prospect of a recession in Russia. Back home, traders were buying, Power, Consumer Durables and Metal stocks, while selling was seen in Oil & Gas, Teck and IT.

The market breadth on BSE remains negative with advances to declines in the ratio of 1027:1031. BSE Sensex and NSE Nifty were comfortably trading near their psychological 22,000 and 6,550 levels respectively. The BSE Sensex is currently trading at 22026.72 down by 28.76 points or 0.13% after trading in a range of 22047.99 and 21916.87. There were 16 stocks advancing against 14 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.43% and Small cap index up by 0.26%.

The top gaining sectoral indices on the BSE were, Power up by 0.96%, Consumer Durables up by 0.74%, Metal up by 0.71%, Bankex up by 0.38% and Capital Goods up by 0.31%, while Oil & Gas down by 1.75 %, Teck down by 0.38%, IT down by 0.37%, Realty down by 0.09% and Auto down by 0.07% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 1.83%, Gail India up by 1.80%, BHEL up by 1.73%, HDFC up by 1.06% and HDFC Bank up by 0.85%. On the flip side, RIL was down by 2.72%, ONGC was down by 2.29%, Wipro was down by 1.20%, Bajaj Auto was down by 0.69% and Bharti Airtel was down by 0.65% were the top losers on the Sensex.

Meanwhile, Amid concerns over the increasing India’s trade deficit with China, India sought more Chinese investments to bridge the ballooning $35 billion trade deficit. Indian Ambassador to China Ashok K Kantha, during the meeting with Chinese officials, has highlighted the potential for expanding and diversifying trade and economic cooperation between these two countries. At present, Chinese investment in India is less than $1 billion.

Kantha asserted that Shanghai-based companies have undertaken a number of projects in India and other Chinese enterprises should also increase their investments in India. While, Shanghai Mayor Yang Xiong has said that relations between Shanghai and India have made steady progress and the Shanghai municipal government remains committed to further strengthen its relations with India.

China-India bilateral trade declined to $66.5 billion last year as Indian trade continued to fall due to various reasons including reduced iron ore exports and high rupee depreciation. Both the countries have set $100 billion target by 2015, which is expected to benefit China more. However, India had already asked the Chinese government to provide more access to the market so that the target of $100 billion can be achieved in a more balanced manner. More access of Chinese markets to domestic IT-enabled services, cotton textiles, home furnishings and pharmaceuticals can help India to reduce the imbalance in trade.

The CNX Nifty is currently trading at 6,581.60 down by 1.90 points or 0.03% after trading in a range of 6,591.50 and 6,544.85. There were 31 stocks advancing against 18 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were BPCL up by 2.78%, GAIL up by 1.96%, BHEL up by 1.94%, Tata Steel up by 1.86% and Power Grid up by 1.84%. On the flip side, Reliance Industries down by 2.82%, ONGC down by 2.01%, Wipro down by 1.11%, IDFC down by 0.85% and Bharti Airtel down by 0.65% were the top losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined by 84.80 points or 0.39% to 21,761.65, Jakarta Composite dipped by 20.01 points or 0.42% to 4,700.41, KLSE Composite decreased by 3.67 points or 0.20% to 1,830.18, Straits Times contracted by 8.24 points or 0.26% to 3,103.24 and KOSPI Composite was down by 5.50 points or 0.29% to 1,939.98. On the flip side, Shanghai Composite soared 6.38 points or 0.31% to 2,072.66, Nikkei 225 spurted by 13.75 points or 0.09% to 14,488.94  and Taiwan Weighted was up by 69.65 points or 0.76% to 8,674.72.