Benchmarks trade in green after flat-to-negative start

The Indian equity markets are trading in a positive note after making a flat-to-negative start tracking mixed cues from the global indices. Most of the Asian equity indices were trading in the negative terrain at this point of time as fresh worries over high levels of radiation weighed on cautious investors' mood. However, the US markets continued their winning streak overnight after government reported that the economy grew at a faster rate than expected.  Back home, benchmarks turn positive after making a flat to negative start as continued buying was witnessed by foreign funds and retail investors amid expectations of better Q4 earnings. On the sectoral front, capital goods, banking and fast moving consumer goods were the top gainers in the trade; on the other hand software, technology and metal were the major losers on the BSE sectoral space. The broader indices are going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 986 shares on the gaining side against 693 shares on the losing side while 79 shares remained unchanged.

The BSE Sensex opened at 18,799.71; about 16 points lower compared to its previous closing of 18,815.64, and has touched a high and a low of 18,905.34 and 18,799.57 respectively.

The index is currently trading at 18,868.15, up by 52.51 points or 0.28%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth started in the positive terrain, with 56.09% stocks advancing against 39.42% declines. The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices were up by 0.25% and 0.39%, respectively.

The top gaining sectoral indices on the BSE were, CG up by 0.94%, Bankex up by 0.94%, FMCG up by 0.86%, Auto up by 0.80% and CD up by 0.49%. While, IT down by 0.61%, TECk down by 0.52%, Metal down by 0.18%, HC down by 0.15% and Oil and Gas down by 0.13% were the major losers on the index.

The top gainers on the Sensex were Tata Motors up by 1.68%, Cipla up by 1.49%, HUL up by 1.48%, L&T up by 1.30% and ICICI Bank was up by 1.04%.

Sterlite Industries down by 1.51%, Jaiprakash Associates down by 1.38%, Infosys down by 1.21%, Reliance Communication down by 1.08% and NTPC down by 0.58% were the top losers on the index.

Meanwhile, despite the Economic Survey arguing for allowing the foreign direct investment (FDI) in multi-brand retail space year-after-year, the government of India has yet not made up its mind, neither is it in any hurry to do so. In fact, the government stated on Friday that there will be no decision in haste on the matter.

Union Finance Minister Pranab Mukherjee said on Friday in the lower house of Indian Parliament that the government will not take an 'off the cuff' decision on the contentious issue of allowing multinationals to set up retail stores that sell goods of different brands. The Indian government currently allows up to 51% of FDI in single brand retail but foreign players have not been permitted so far to participate in the multi-brand retail space.

The minister made it clear that in wake of the complex nature of the issue, the government will take into account the views of state governments as well as retailers and small shopkeepers and arrive at a larger consensus before making a final move. Mukherjee was responding to a calling attention motion in the Lok Sabha by some legislators. "The government has not taken any decision in this regard so far," Mukherjee added.

Economists have been pointing out that one of the reasons behind high inflation in the food goods space is the large gap between the retail and wholesale level prices. This indicates poor efficiency of distribution. By bringing in more money into the organized retail through foreign companies, greater investment into farm infrastructure can be made which will help improve the efficiency of distribution, lower the gap between farm gate and retail prices, and bring down the surging food inflation.

Earlier, the department of industrial policy and promotion (DIPP) too had floated a consultation paper seeking the views of various government agencies and other stake holders on allowing the FDI into the multi-brand space. The DIPP advocated the move saying it would help push investment into back-end infrastructure, besides logistics and agro-processing. The Planning Commission has already supported the move and some other key cabinet ministers are now also in favour of the move. Any announcement on the matter however will have to wait for a politically more suitable time.

The S&P CNX Nifty opened at 5,645.25; about 9 points lower compared to its previous closing of 5,654.25, and has touched a high and a low of 5,676.95 and 5,643.20, respectively.

The index is currently trading at 5,667.95, up by 13.70 points or 0.24%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were IDFC up by 3.18%, Tata Motors up by 1.69%, HUL up by 1.58%, Cipla up by 1.43% and L&T up by 1.39%.

The top losers of the index were Sun Pharma down by 1.69%, JP Associates down by 1.55%, Sesa Goa down by 1.43%, Sterlite Industries down by 1.42% and Infosys was down by 1.22%.

Asian equity indices were trading mostly in the red; Hang Seng was down 167.85 points or 0.72% to 22,990.82, Jakarta Composite was down 10.28 points or 0.29% to 3,596.83, KLSE Composite was down 1.67 points or 0.11% to 1,513.88, Nikkei 225 was down 87.00 points or 0.91% to 9,449.13, Straits Times was down 23.12 points or 0.75% to 3,047.72 and Seoul Composite was down 5.91 points or 0.29% to 2,048.13 and Taiwan Weighted was down by 39.23 points or 0.46% to 8,571.16.

On the flip side, Shanghai Composite was up by 20.97 points or 0.70% to 2,998.78.

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