The local equity markets remain choppy trading with negative bias in late-morning session on getting a food inflation data with moderate decline while the global cues too remained mixed. The weekly food price inflation stood at 16.91% during the week-ended December 25, 2010, compared to 18.32% in the previous week. Although the regional peers were trading quite positive but were unable to give any support to the domestic markets, on the other hand US futures were trading in negative in the screen trade. Back home, investors continued to remain cautious on concern of rate hike in upcoming RBI policy meet .The Sensex is trading above psychological 19,000 levels and Nifty was up from 5,800 level. The BSE IT index was down 1.86% as sentiments were subdued after Infosys Technologies failed to meet the street expectations, IT stocks were witnessing some selling pressure and profit booking in banking stocks too has appeared. On the other hand Reality, Capital Goods, Auto, Power and Oil & Gas counters were trying to give some strength to the markets .The broader indices were trading in positive terrain. The market breadth on the BSE was positive; there were 1429 shares on the gainers' side against 1001 shares on the losers' side, while 101 shares were unchanged. The S&P CNX Nifty may face resistance around 5,880 mark whereas support will be around 5750 mark for the day.
The BSE Sensex shed 89.20 points or 0.46% at 19,444.90. The index touched a high and a low of 19,511.27 and 19,352.24 respectively.
The BSE Mid-cap index and Small-cap index were up by 0.34% and 0.69% respectively.
The main losers in the BSE sectoral space was IT down 1.86%, Bankex down 1.34%, TECk down 1.26%,Consumer Durables (CD) down 0.34% and Health Care (HC) down 0.26%.
Realty up 0.61%, Capital Goods up 0.47%, Auto up 0.41%, Power up 0.35% and Oil & Gas up by 0.32% were top gainers in the BSE sectoral space.
The major gainers on the Sensex were Reliance Communication up 2.39%, JP associates up 1.60%, Reliance Infra up 1.56%,Tata Motors up 1.54% and Bajaj Auto up 1.19%.
On the flip side, Infosys down 3.75%, ICICI Bank down by 1.77%, HDFC Bank down by 1.75%, Jindal Steel down by 1.33% and SBI down by 1.27%.
The government may announce some additional measures to curb rising food prices. Food inflation has reached around 18%, the highest in over a year and showed a sudden reversal in trajectory in the last month. Over the month of December, the pace of rising prices nearly doubled, raising political as well as economic stakes for government.
Earlier, Prime Minister Manmohan Singh met Finance Minister Pranab Mukherjee and host of other leaders on Tuesday to discuss measures to curb inflation. Mukherjee later had a meeting with Agriculture Minister Sharad Pawar and Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday. Fffter the meeting Pawar said that the decisions taken would be communicated to the Prime Minister.
The government seems to be finally taking note of the surging food prices and problems it is causing the common man and is looking to take some out of the box solutions for the same. Importing food commodities, restricting exports further, seamless movement of food commodities over different states and selling through government's public distribution system (PDS) are some of the steps that are on the cards for checking prices.
Prime Minister is also expected to meet the Reserve Bank of India (RBI) Governor D Subbarao to discuss what monetary steps can be taken to curb prices. Although the food inflation is generally seen as a supply side phenomenon and is less responsive to monetary tightening due to low elasticity of food items, the RBI can still impact demand of many commodities through its differential reserve requirements.
The S&P CNX Nifty trimmed 26.75 points or 0.46% to 5,836.50. The index touched a high and a low of 5857.35 and 5809.50 respectively.
The top gainers on the Nifty were Ambuja Cements up 3.97%, Reilance Communication up 2.60%, JP Associates up 2.02%, ACC up by 1.67%, and Tata Motors was up by 1.54%.
The top losers on the index were Infosys down 3.95%, ICIC Bank down 1.88%, Dr Reddy down 1.67%, SBI down 1.54% and HDFC Bank down 1.54 %.
Majority of the regional peers were trading in green except Seoul, which was down by 0.26%, Jakarta Composite surged 1.05%, Straits Times added 0.28% ,Taiwan Weighted increased 0.12%, KLSE Composite inched up 0.21%,Hang Seng moved up 0.50% and Nikkei surged 0.73%.
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