Markets remain in tight range; broader markets out perform

Markets are trading in a tight range in the mid morning session after a soft start. There is cautiousness in the markets ahead of the ECB’s policy meet; the somber cues from the regional markets too are weighing down the sentiments. On the domestic front there is not much to give a strong upside and the concern of delayed monsoon along with the once again depreciating rupee is restricting the gains in the markets. On the sectoral front, the defensive FMCG sector has taken the lead closely followed by capital goods and consumer durables, on the other hand the rate sensitive realty along with IT sector stocks are on the laggard side. The broader markets continue to outperform the benchmarks for yet another day. Meanwhile, Department of Telecom released 2G auction guidelines but without any mention of spectrum pricing and have put the telecom stocks under pressure.

The market breadth on BSE was positive in the ratio of 1480:719 while 92 scrips remained unchanged.

The BSE Sensex is currently trading at 17,465.48 up by 2.67 points or 0.02% after trading as high as 17,496.38 and as low as 17,423.45. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.57% while Small cap index climbed 1.05%.

The top gaining sectoral indices on the BSE were, FMCG up by 0.92%, CG up by 0.52%, CD up by 0.27%, HC up by 0.27% and Power up by 0.25%. While, Realty down by 0.51%, IT down by 0.32%, TECk down by 0.30%, Metal down by 0.28% and Bankex down by 0.20% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 1.58%, Hindustan Unilever up by 1.47%, ITC up by 1.04%, BHEL up by 0.94% and Mahindra & Mahindra up by 0.75%.

On the flip side, Bajaj Auto was down by 2.01%, ONGC was down by 1.21%, Dr Reddys Lab was down by 1.17%, NTPC was down by 0.71% and TCS was down by 0.55% were the top losers on the Sensex.

Meanwhile, delayed Indian monsoon has become a concern for the government, as it is intensifying worries of a shortfall in summer-sown output of staples such as rice, oilseeds and sugar, leading to higher inflation, but has now also made the apex bank to think. Amid widespread demand for a cut in lending rates to boost flagging growth, Reserve Bank of India (RBI) has said that its policy action in the forthcoming quarterly review will depend upon the progress of monsoon. RBI Deputy Governor Subir Gokarn said that the RBI would pay more attention to the progress of the southwest monsoon as it goes into its 'policy date'.

Gokarn was reported saying that RBI cannot make judgments on the progress of monsoon and it would rely on the Meteorological Department for forecast. However, Indian Met Department has said that India's monsoon appeared set to march ahead this week, as weather conditions were favourable for advance of the seasonal rains into parts of Maharashtra, Gujarat and Madhya Pradesh.

Monsoon is considered the lifeline of Indian economy as around 60 per cent of the country's cultivable land depends on monsoon rain for irrigation. The deputy Governor said that 'if there is a problem in proper monsoon, we will take it into our consideration'. RBI is scheduled to announce its first quarter review of monetary policy 2012-13 on July 31.

The S&P CNX Nifty is currently trading at 5,299.15, down by 3.40 points or 0.06% after trading as high as 5,310.45 and as low as 5,288.85. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Cipla up by 1.64%, Hindustan Unilever up by 1.45%, HCL Tech up by 1.07%, ITC up by 1.04% and Siemens up by 0.96%.

On the flip side, Bajaj Auto down by 2.22%, Asian Paint down by 1.50%, DLF down by 1.43%, JP Associates down by 1.29% and DR reddy down by 1.26%, were the major losers on the index.

In the Asian space, Jakarta Composite down 0.20%, KLSE Composite down 0.32%, Nikkei 225 down 0.27%, Straits Times Index up 0.08%, KOSPI Composite Index down 0.03% , Taiwan Weighted down  0.62%, Shanghai Composite down 1.41% and Hang Seng down 0.29%.

On the other hand, Straits Times Index up 0.08% was the only gainer.