Equity markets gyrate listlessly after cooling from intra-day high level

After cooling down from intra-day’s high point, local equity market lacking any direction, are just listlessly gyrating in red terrain, as after the release of much awaited Q1FY13 GDP data, focus have now shifted to Federal Reserve Chairman Ben Bernanke speech at a symposium in Jackson Hole, Wyoming.  Investors have resorted to a defensive posture in the wake of underlying caution to see whether Fed hints at another asset buying programme or quantitative easing, as he speaks later in the day, which could decided the near term trend of markets around  the globe. Meanwhile, Gross Domestic Product (GDP) for the April-June quarter grew a better-than-expected 5.5%, after eight successive quarters of declining growth.

Back on the Dalal Street, stocks from Health Care, Bankex and Consumer Durable counters have emerged as the only gainers, while stocks from Auto, Power and Metal counters are endorsing the underlying weakness of markets. 30 share barometer index, Sensex, drawing over 25 points, is currently holding above the 17500 level, while the widely followed index, Nifty, losing over 50 points, is off its 5300 psychological level. Meanwhile, the broader indices are sustaining the uptrend.

On the global front, Asian shares plunged four-week lows on Friday as investors cooled expectations that U.S. Federal Reserve Chairman Ben Bernanke will offer any signal of more monetary stimulus at a speech before fellow central bankers later in the day. Meanwhile, European shares have got off to a mixed start ahead of the big event.

Closer home, the BSE Sensex is currently trading at 17,506.83, down by 34.81 points or 0.20% after touching a high of 17557.62 and low of 17,430.59. There were 9 stocks advancing against 21 declines on the index. The overall market breadth on BSE was in the favour of declines which have thumped advances in the ratio of 1352:1082, while 110 shares remained unchanged.

The broader indices continued to sustain the uptrend; the BSE Mid cap index was up by 0.54% and Small cap index was up by 0.53%.

The top gainers on the BSE sectoral space were, Health Care up by 0.48%, Bankex up by 0.31%, CD up by 0.17%. On the flip side, Auto down by 0.78%, Power down by 0.73%, Metal down by 0.72%, Fast Moving Consumer Goods up by 0.71% and Information Technology down by 0.60%, and were top losers on the index.

The top gainers on the Sensex were Cipla up by 1.46%, HDFC up by 1.40%, Bharti Airtel up by 1.15%, SBI up by 1.07% and HDFC Bank up by 1.07%. On the flip side, Coal India down by 1.91%, Hindalco Industries down by 1.89%, Hero Moto Corp down by 1.75%,  NTPC down by 1.72% and Hindustan Unilever down by 1.57%, were the top losers on the Sensex.

Meanwhile, driven by higher-than-expected performance on the agriculture front, Indian economy grew 5.5 per cent in first quarter this fiscal, higher than 5.3 per cent GDP number recorded in the previous quarter of fiscal 2012. The growth figure, which is better than consensus estimates of 5.2 per cent, is sharply lower from the robust 8 per cent growth in the same quarter of the last financial year.

As per official data released by the Central Statistics Organization (CSO), quarterly GDP at factor cost at constant (2004-2005) prices for Q1 of 2012-13 is estimated to be at Rs 1306,276 crore, as against Rs 12,38,738 crore in Q1 of 2011-12. Meanwhile, GDP at factor cost at current prices in Q1 of 2012-13, is estimated at Rs 2178778 crore, as against Rs 19,19,286 crore in Q1, 2011-12, showing an increase of 13.5 per cent.

Agriculture emerged as the only saving grace for the sagging economy, which has witnessed a near-stalling of industrial activity. Agriculture came in at better than expected at 2.9 per cent, as against major economists’ estimates at 2 percent. According to the government’s press release, the economic activities which registered significant growth in April-June of 2012-13 on year on year basis are construction at 10.9 percent, financing, insurance, real estate and business services at 10.8 percent and community, social and personal services at 7.9 percent.

On the flip side, services sector was the biggest disappointment, which grew at 6.9 per cent against 10.2 per cent in the year ago period. While, manufacturing saw tepid growth of 0.2 per cent for the quarter under review as against a contraction of 0.3 per cent in the previous quarter. Additionally, mining sector of the economy grew at 0.1 per cent versus 4.3 per cent quarter-on-quarter.

Meanwhile, the gross fixed capital formation (GFCF), a measure of investments, at current and constant (2004-05) prices during 2012-13 are estimated at 29.9 per cent and 32.8 per cent, respectively, as against the corresponding rates of 31.2 per cent and 33.9 per cent, respectively in Q1 of 2011-12. In terms of GDP at market prices, the rates of Private Final Consumption Expenditure (PFCE) at current and constant (2004-05) prices during Q1 of 2012-13 are estimated at 11.7 per cent and 11.1 per cent, respectively, as against the corresponding rate of 11.0 per cent and 10.6 per cent, respectively in Q1 of 2011-12.

However, this slight improvement in GDP growth for the June quarter may prompt the Reserve Bank of India to stand still at its upcoming monetary policy review meet on September 17, as the central bank has reiterated that the government’s fiscal policy action should precede any rate cut move. Further, the central bank also previously stated that investments, the fuel needed to put the economy back in the 8% trajectory, may not revive for more than a year even with lower interest rates, in light of adverse consumption and savings behaviour of individuals and companies..

The S&P CNX Nifty is currently trading at 5,291.95, down by 23.10 points or 0.43% after trading in a range of 5,303.25 and 5,272.35. There were 13 stocks advancing against 36 declines on the index, while one remained unchanged.

The top gainers of the Nifty were Cipla up by 1.36%, HDFC up by 1.17%, SBI up by 1.16%, Bharti Airtel up by 1.09% and Reliance Infra up by 0.98%. On the flip side, IDFC down by 2.46%, Coal India down by 2.11%, Hindustan Unilever down by 2.08%, Hindalco Industries down by 2.07% and NTPC down by 2.01% were major losers on the index.

Asian indices were trading on mix note; Nikkei 225 plunged 1.60%, Hang Seng index slid 0.29%, Jakarta Composite shed 0.50% and Kospi Composite Index descended 0.09%, while Taiwan Weighted up by 0.35% Straits Times added 0.04% and Shanghai Composite rose  0.08% were  the gainers. Meanwhile, KLSE Composite remained close today on account of Merdeka day holiday.

European shares have got off to a mixed start ahead of the big event, where France’s CAC 40 added 0.17%, Germany’s DAX rose 0.14%, while UK’s FTSE100 lost 0.08%.