Indian equity markets are still trading with marginal losses accompanied by volatility. Stocks from the consumer durables and realty space are trading weak while stocks from the FMCG and Healthcare spaces are capping downside. Nifty has been unable to hold the 5,500 level since start and most of the sectors are witnessing pressure in the early noon session today. Though, on the global front, cues remained mixed as most Asian indices are trading in the positive territory, while some of the European markets have made a soft start. Back home, markets are trading sluggish as investors are apprehensive that the RBI may go for an interest rates hike by 0.50 basis points instead of 0.25 basis points due to unexpected rise in inflation. Though, most of the sectors are trading in red, the broader markets are trading on a flat note; there were 1317 shares on the gaining side against 1,120 shares on the losing side while 141 shares remained unchanged.
The BSE Sensex is currently trading at 18,263.45 down by 45.21 points or 0.25%. The index has touched a high and low of 18,308.69 and 18,234.68 respectively. There were 9 stocks advancing against 21 declines on the index.
The broader indices were outperforming the benchmark indices; the BSE Mid cap and Small cap indices were up by 0.19% and 0.24% respectively.
The sectoral gainers on the BSE were FMCG up by 0.65%, Healthcare up by 0.46% and Auto up by 0.03% while, Realty down 0.81%, Consumer Durables down 0.68%, IT down 0.58%, PSU down 0.49% and Teck down by 0.44%, were the major losers on the index.
The top gainers on the Sensex were HDFC up by 1.37%, R Infra up by 1.35%, Tata Steel up by 0.75%, TCS up by 0.74% and Tata Motors up by 0.68%.
On the flip side, Infosys down by 1.53%, Hindalco down by 1.24%, Sterlite down by 1.21%, Jindal Steel down by 1.01% and NTPC down by 0.89% were the top losers on the index.
Meanwhile, the Reserve Bank of India accepted that its aggressive monetary policy stance on inflation along with elevated crude oil price and uncertainty in global economy are posing risk to India's growth momentum in the present financial year. 'The slackening of global recovery, high oil and commodity prices, deceleration in domestic industrial growth, uncertainty about continuation of strong growth in agricultural sector and impact of monetary policy actions pose downside risks to India's GDP', RBI said in a report.
According to the RBI's Financial Stability Report-June 2011, the deceleration in growth momentum may affect the quality of the assets of financial sector. The central bank also cautioned that country may experience a slowdown in capital inflow in current fiscal year as the advanced economy are adopting tighter monetary policy, this deceleration in capital inflow would create difficulties for government to fund its increasing current account deficit for present year.
According to the report, the inflation is expected to face upward pressure from higher subsidy expenditure of the government and the increase in wage and raw material prices. The central bank, which has raised key interest rates nine times since March 2010 to check price rise, has pegged India's gross domestic product (GDP) growth rate for the current fiscal at 8 percent, down from 8.6 percent recorded in FY11. However, the report also stated that India's macroeconomic fundamentals continue to remain strong, despite the prevailing inflationary pressures and concerns on the fiscal front.
As per the RBI's report, the recent slowdown in international oil prices 'may not help in inflation management as the complete pass-through of last escalation of oil price is still to be affected'. The international prices of food, energy and commodities are expected to remain high during 2011-12, it added.
On the current account deficit (CAD), RBI's report said, 'there does not seem to be an impending pressure on the financing of CAD'. On recent growth in country's export, the central bank said, it may off-set, at least partially, the expected increase in the import bill due to elevated oil and commodity prices. In May, India's export registered impressive growth of 56.9 percent to $25.9 billion, whereas imports for the month rose 54.1 percent to $40.9 billion. However, the trade deficit raised to 67 percent in May from last month to $15 billion, this three year high increase in trade deficit is due to increase in demand for oil, gold and industrial machinery.
The S&P CNX Nifty is currently trading at 5,483.75, lower by 16.75 points or 0.30%. The index has touched a high and low of 5,499.35 and 5,477.10 respectively. There were 15 stocks advancing against 35 declines on the index.
The top gainers of the Nifty were Sun Pharma up by 1.19%, HDFC up by 1.18%, Reliance Infra up by 1.15%, Tata Steel up by 0.70% and TCS up by 0.68%.
SAIL down by 2.21%, RPower down by 1.73%, Ambuja Cement down by 1.59%, Hindalco down by 1.53% and Sterlite down by 1.51%, were the major losers on the index.
The Asian markets were trading on a mixed note; Jakarta Composite climbed 0.78%, KLSE Composite increased 0.31%, Nikkei 225 added 0.32%, Seoul Composite gained 0.41%, Taiwan Weighted up 0.26% and Straits Times remain unchanged.
On the other hand, Shanghai Composite declined 0.61% and Hang Seng eased 0.33%
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