The domestic equity markets remained sluggish in late-afternoon trades in the absence of any major trigger. Selling pressure witnessed in the late-morning trades on the back of disappointing weekly food inflation data got arrested at this point of time. Slight up-tick on the US and European index futures provided some support to choppy local equities. Meanwhile, the Asian counterparts were trading mostly in the negative terrain. On the Dalal Street, the BSE's 30-share Sensex regained the psychological 20,000-level in trade while the NSE's 50-share Nifty was tad below the crucial 6,000-mark. Gains in healthcare, technology and software stocks were offset by losses in auto, capital goods and metal counters. The broader indices were also looking directionless and were hovering around the neutral line. The market breadth on the BSE, however, turned negative; the losers outnumbered the gainers in a ratio of 1424:1240 while 123 shares were unchanged.
The BSE Sensex declined 11.46 points or 0.06% to 20,004.34. The index touched a high and a low of 20,076.08 and 19,939.30, respectively.
The BSE Mid-cap index slid 0.10% while the Small-cap index rose 0.07%.
The main gainers in the BSE sectoral space were Healthcare (HC) up 0.72%, TECk up 0.33%, Information Technology (IT) up 0.26%, Oil & Gas up 0.10% and Bankex up 0.07%.
The main losers in the BSE sectoral space were Auto down 0.92%, Capital Goods (CG) down 0.68%, Metal down 0.61%, Realty down 0.28% and Consumer Durables (CD) down 0.22%.
Meanwhile, after declining for several weeks due to improved supply of food commodities and activation for high base effect from the previous year, food inflation in India has been inching up again, clouding the outlook of price movement. This contradicts the expectations of the government and the central bank that inflation will finally follow a sharp declining trajectory as has been the historical trend over the Nov-Feb period.
According to the data released by the ministry of commerce and industry, India's food price index rose 12.13% on annual basis during week-ended Dec 4, substantially faster compared with 9.46% in the previous week. On a sequential basis, the index rose by sharply by 2.3% to 185.8 from 181.7 for the previous week due to higher prices of vegetables and spices. This was foruth consecutive week of rise in index, suggesting prices were continuing to rise despite expected increase in supply of farm commodities. Also, the quantum of rise on a weekly basis is way too high to be called a random increase in declining trend.
The index for 'Non-Food Articles' group on the other hand rose by 1.2% to 171.6 compared with 169.5 for the previous week. The broader 'Primary Articles' index, which has a weight of 20.12% in the overall wholesale price index (WPI), also increased by 1.8% to 187.9 compared with 184.6 for the previous week. The annual rate of inflation, calculated on point to point basis, for this group also rose significantly to 15.35% from 13.79% for previous week.
The major gainers on the Sensex were Bharti Airtel up 1.22%, NTPC up 1.11%, Sterlite Inds up 0.84%, Infosys up 0.75% and Jindal Steel up 0.61%.
The major losers on the index were Tata Motors down 1.59%, Hindalco Inds down 1.22%, Tata Steel down 1.16%, BHEL down 0.93% and L&T down 0.80%.
The Reserve Bank of India (RBI) said on Wednesday that the ongoing liquidity deficit was primarily a result of a number of short-term factors and situation may ease in January. Over last few days, banks have been drawing close to Rs 1.5 lakh crore from the RBI's repo window through the central bank's liquidity adjustment facility (LAF). This is way above the Rs 50,000 crore figure that the central bank said it was comfortable with.
Deputy Governor of the RBI, Dr Subir Gokarn said on sidelines of a seminar that the central bank was hopeful liquidity situation becoming easier by the end of January as a result of a combination of factors. These factors include a Special Deposit Scheme (SDS) interest coupon, beginning of redemptions by end-January, decreased government borrowing and a possible uptake in deposits.
"There's an SDS interest coupon due, we will start to get redemptions by end-January so scaling down of government balances is clearly in the horizon. A combination of all these factors will start to bring down the LAF activity. We do have a trajectory which will bring liquidity to one per cent boundary as we go along but that will happen over a period of time," Gokarn said adding that the RBI will take further steps if need arise to keep liquidity at comfortable levels.
The S&P CNX Nifty added 1.95 points or 0.03% to 5,986.35. The index touched a high and a low of 6,006.45 and 5,964.60, respectively.
The top gainers on the Nifty were Sun Pharma up 4.01%, Sesa Goa up 1.67%, Bharti Airtel up 1.28%, NTPC up 1.19% and Dr Reddy up 1.08%.
The top losers on the index were SAIL down 3.10%, Tata Motors down 1.56%, BPCL down 1.43%, Kotak Bank down 1.34% and Tata Steel down 1.26%.
Other Asian markets were trading mostly in the red. Shanghai Composite trimmed 0.79%, Hang Seng slid 0.17%, Jakarta Composite slipped 0.63%, KLSE Composite shed 0.05% and Seoul Composite decreased 0.03% while Straits Times rose 0.20% and Taiwan Weighted advanced 0.43%.
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