Local bourses trade in a narrow range; broader indices outperform

Benchmark indices after getting a quiet start are now gyrating in an extremely narrow band indicating lack of interest from investors. Financials and oil retailers have bought the indices lower, as conflicting market chatter about a possible local fuel price hike and continuing worries over rising interest rates has spooked investor sentiment. Moreover, higher crude oil prices have further clouded the picture at Dalal Street amidst already persisting edgy sentiment about sticky inflation ever since the RBI governor Duvvuri Subbarao reiterated that "India will maintain its anti-inflationary stance even if that means sacrificing growth in the short term". Crude prices ended higher for a second day on Tuesday, extending the bounce back from last week's huge plunge, as strong trade data from China eased worries about slowing growth curbing global oil demand and supported by a surge in gasoline futures after a report that the Mississippi River floods are curtailing refinery operations.

The drag of the indices has also come from the plunge of the two index heavyweights - ICICI Bank and Reliance Industries (RIL) which are among the top losers on the 30 scrip index - Sensex - on BSE. However, besides stocks from Realty and Metal sector, IT stocks too are curtailing the losses of the bourses. IT stocks are up as positive economic data in China have raised hopes of global economic recovery. On the global front, U.S. stocks ended higher for a third day on Tuesday, led by utilities and other defensive shares and the prospect of still-strong profit growth. Meanwhile, Asian shares were trading higher in line with gains in world markets as Chinese trade data buoyed optimism about the global recovery, but investors will be watching China's inflation data due later on Wednesday for any hints on further tightening. The US future indices too were showing an uptick on the screen trade. Back home, the 30 member pack despite edging lower by over 10 points was trading above its key physiological level of 18500, while the broader barometer index on NSE - Nifty - despite trading in red was above its 5500 level. The broader indices doing well for themselves were outperforming their larger peers. The overall market breadth on BSE was majorly in the favour of advances which outpaced declines in the ratio of 1251: 808, while, 129 shares remained unchanged.

The BSE Sensex is currently trading at 18,502.31, down by 10.46 points or 0.06%. The index has touched a high and low of 18,575.00 and 18,454.93 respectively. There were 15 stocks advancing against 15 declines on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices were up by 0.32% and 0.55% respectively. 

The top gaining sectoral indices on the BSE were, Realty up by 1.03%, IT up by 0.88%, Metal up by 0.79%, TECk up by 0.67%, and Auto was up by 0.50%. While Oil and Gas down by 0.59% and Bankex down by 0.39% were the only losers on the index.

The top gainers on the Sensex were Hero Honda up by 2.74%, DLF up by 1.76%, Reliance Communication up by 1.60%, Hindalco Industries up by 1.28% and Infosys up by 0.93%.

On the flip side, NTPC down by 1.61%, ONGC down by 1.13%, ICICI Bank down by 1.07%, Tata Power down by 0.85% and RIL down by 0.61% were the top losers on the index.

Meanwhile, India and New Zealand have concluded very successful the two day talks on the roadmap to propel forward trade and economic relationship between the two nations and accelerate the process of Free Trade agreement (FTA) negotiations. Citing the below potential economic linkages between the two countries, Indian Minister of Commerce and Industry, Anand Sharma and his New Zealand counterpart jointly underscored the need to ramp up the two-way trade between the nations to $3 billion annually by 2014 from the existing $1.2 billion a year, with combined efforts and reduced trade barriers.

Both ministers have committed to an eight to ten months timetable for establishing the Comprehensive Economic Co-operation Agreement (CECA) in trade, investment and services which will be "much more than just a Free Trade Agreement." The Indian commerce minister, who is leading a FICCI business delegation in New Zealand, emphasized upon the trade complementarities in the agricultural sector and stressed upon deepening the relationship between the two countries in the services trade, bilateral investment, innovation and technology transfer. He invited co-operation in the fields of pharmaceuticals, engineering goods, textiles, spice trade and film making.

Sharma indicated that India's service sector constituted a major portion of GDP as well as exports and consequently India hoped that New Zealand would provide a growing market for India's IT enabled service sector. He mentioned that productivity in agriculture in India is still low and accordingly India was looking for technical solutions to enhance its productivity. Sharma noted that India welcomed investment in a broad range of sectors, including agri-processing, food processing, post-harvest technology transfer in refrigeration, cold chains, storage and logistics for minimizing post production losses. He specifically stressed that the Indian pharmaceutical industry has established itself in world markets for its high quality, at the same time ensuring availability of generics in a manner that makes health care more affordable for vulnerable sections of the world population.

India is experiencing a rapid economic growth of around 8% - 9% of each year, while New Zealand struggles to grow by as much as 2% annually. New Zealand's Trade Minister Tim Groser highlighted their nation's interests in enhancing the export of agricultural products, including dairy, horticulture and wine and industrial goods, over and above the traditional export of coking coal and wood from New Zealand to India. New Zealand also wants India to lower tariff barriers that add costs to export items like wool for carpet-making.

The S&P CNX Nifty is currently trading at 5,536.65, down by 4.60 points or 0.08%. The index has touched a high and a low of 5,556.85 and 5,525.00 respectively. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 4.07%, Hero Honda up by 3.17%, DLF up by 1.62%, RCom up by 1.55% and Jindal Steel up by 0.99%.

IDFC down by 1.82%, NTPC down by 1.72%, ONGC down by 1.36%, Ambuja Cement down by 1.35% and Tata Power down by 1.18% were the major losers on the index.

All the Asian peers were trading in the green; Shanghai Composite gained 0.13%, Hang Seng added 0.30%, Jakarta Composite rose 0.50%, KLSE Composite zoomed 0.90%, Nikkei 225 expanded 0.39%, Straits Times increased 0.46%, Seoul Composite surged 0.94% and Taiwan Weighted was up by 0.1

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