Indian equities inch closer to the neutral line in noon trades

Indian markets are trying hard to break out of the narrow trading range in Monday afternoon session and the benchmark indices have even pared some of its losses to move closer to the psychological 5,350 (Nifty) and 18,000 (Sensex) levels. A week after the benchmarks’ sharp resurgence of over six percent, investors largely are looking to consolidate their position, lacking any significant upside cues. The downside for the local markets remained capped amid a slew of earnings announcement by banks like UCO Bank, Indian Bank, Bank of Baroda. While the encouraging earnings announcement by IT bellwether Wipro too did its bit in preventing the benchmarks from drifting as it surged by close to two percent and was the top gainer in the index. However, investors remained cautious ahead of second quarter earnings of FMCG Heavyweight HUL and Banking major ICICI bank for further leads. On the global front, sentiments remained unenthusiastic in Asian markets as optimism over the solution of Euro-zone debt trouble fizzled out and marketmen took a breather post seeing a sharp rally last week. Investors shifted their attention from Europe to the important US Federal Reserve meet and economic data that are scheduled to be announced later this week. Back home, on the BSE sectoral front, the Bankex and IT counters were the top gainers with around a percent gains while the Oil & Gas and Automobile pockets were the top laggards as they traded with large cuts of around a percent. 

Moreover, the broader markets traded on a positive note with gains of around half a percent and outclassed their larger peers by quite a margin. The bourses consolidated on weak volumes of around Rs 0.50 lakh core, considering these are initial days of a new F&O series. The market breadth on the BSE was in favor of advances in the ratio of 1403:1188 while 96 scrips remained unchanged.

The BSE Sensex is currently trading at 17,769.58 up by 35.22 points or 0.20% after trading as high as 17,806.21 and as low as 17,686.27. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading in the green terrain; the BSE Mid cap index climbed 0.50% and Small cap added 0.36%.

On the BSE sectoral space, Bankex up 1%, IT up 0.85%, TECk up 0.80% and Realty up 0.28% were the only gainers while Oil & Gas down 1.35%, Auto down 0.95%, Healthcare down 0.75%, Metal down 0.66% and Capital Goods down 0.31% were the major losers in the space.

Wipro up 2.28%, HDFC Bank up 1.35%, NTPC up 1.23%, Hero Moto up 1.02% and Infosys up 0.99% were the major gainers on the Sensex, while Tata Motors down 2.96%, ONGC down 1.91%, DLF down 1.66%, BHEL down 1.64% and Jindal Steel down 1.62% were the major losers on the index.

Meanwhile, viewing that surging food prices, has been a cause of worry for the government and policy-makers, Prime Minister Manmohan Singh said that the immediate challenge before us today is how to sustain a high growth path, while keeping inflation in check. The international economic environment that we face today is not very encouraging and that RBI will continue to take the required fiscal and monetary measures to ease inflationary pressures.

Currently, growth in international economy is moderating, because of the slowdown in United States, Western European and Japanese economy. On the other hand, uncertainty in oil producing regions i.e. West Asia and North Africa has also increased the prices of oil and commodities in international markets.  In order to maintain growth, Manmohan gave stress on the consideration of all these factors while formulating the strategies for sustaining India’s growth processes.

On the high food inflation, the Prime Minister said, ‘high food price inflation has been a particular cause for worry in the recent months.’ Weekly food inflation measured by the Wholesale Price Index (WPI) surged to 11.43% for the week ended on October 15 compared to last week.

For controlling prices of food product, Prime Minister said, in the longer term the key to tackling rising food prices lies in increasing productivity and production in agriculture and allied sectors, by adding further he said government and the RBI will continue to take the required fiscal and monetary measures to ease inflationary pressures.

The S&P CNX Nifty is currently trading at 5,343.60, lower by 17.10 points or 0.32% after trading as high as 5,360.25 and as low as 5,316.95. There were 18 stocks advancing against 32 declines on the index.

The top gainers on the Nifty were Wipro up 1.83%, Seas Goa up 1.65%, IDFC up 1.55%, NTPC up 1.32% and HDFC Bank up 1.29%.

Tata Motors down 3.34%, Ambuja Cement down 2.87%, Ranbaxy down 2.47%, ONGC down 2.07% and DLF down 2.05% were the major losers on the index.

Asian markets traded on a sluggish note, Shanghai Composite shed 0.21%, Hang Seng plunged 1.15%, Jakarta Composite sank 1.35%, Nikkei 225 slipped 0.69%, Straits Times shaved off 1.21%, Seoul Composite plummeted 1.06% and Taiwan Weighted fell 0.37%.

On the flipside, KLSE Composite advanced 0.07%.