Benchmarks trade weak; Nifty below 5,450 mark

Indian equity indices are trading weak with negative bias and hovering around the neutral line as investors are reluctant to buy after the quarter percent point rate hike by Indian central bank, its the 10th hike in 16 months. Market participants were seen piling up the positions in Realty, Health Care and FMCG sector while, selling was witnessed among IT, Consumer Durables and Teck. All the Asian markets were butchered away and trading in red while, the European markets too joined Asian markets and were trading in red spilling pessimism in the local market. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,450 and 18,200 levels, respectively. The market breadth on the BSE was in favor of declines in the ratio of 1129:1554 while 133 scrips remained unchanged.

Moreover, with the domestic inflation persisting at uncomfortable levels, Reserve Bank of India (RBI) has furthered its aggressive stance against the rampant inflation and hiked repo rate and reverse repo rate by 25 basis points each to 7.50% and 6.50% respectively, in its mid-quarter policy review, which is in line with broader market expectations. While, the central bank has left cash reserve ratio, which is the amount of funds that banks have to keep with RBI, unchanged at 6%.

The BSE Sensex is currently trading at 18,137.50 up by 5.26 points or 0.03% after trading as high as 18,155.10 and as low as 18,005.82. There were 15 stocks advancing against 15 declines on the index.

The BSE Mid cap and Small cap indices declined by 0.32% and 0.05% respectively. 

The sectoral gainers on the BSE were Realty up 0.78%, Health Care up 0.28%, FMCG up 0.20%, Bankex up 0.17% and Power up 0.12% while, IT down 0.91%, Consumer Durables down 0.68%, Teck down 0.54%, Auto down 0.46% and Capital Goods down by 0.44%, were the major losers on the index.

The top gainers on the Sensex were Reliance Infra up by 3.12%, SBI up by 1.71%, HUL up by 1.58%, RCom up by 1.34% and HDFC up by 1.17%. On the flip side, Bajaj Auto down by 1.64%, Maruti down by 1.50%, Sterlite down by 1.35%, Wipro down by 1.24% and TCS down by 1.19% were the top losers on the index.

Meanwhile, in a study on Second Green Revolution: Role in Transforming Indian Agriculture by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), it was pointed that India's population will touch 1.4 billion by 2020 and hence the agricultural sector must grow by 4 per cent each year to support this huge number.

"Indian agricultural sector needs to be revamped to meet future demand and nutritional security of this huge population. Next green revolution with a focus on holistic development of agri sector is imperative to support small, marginal farmers in sustaining their livelihood," said Dilip Modi, president, Assocham.

The study has suggested Innovations in technology, investments in R&D and revamping of the PDS (Public Distribution System).It has further suggested that investments, particularly in research and development (R&D), would enhance agricultural growth by a great extent and provide over 50 per cent return in research and extension process. In its other suggestions, the report has stated that the cropping pattern also needed to undergo transformation and to ensure nutritionally- oriented cropping pattern and production technologies.

Investments in agricultural research and development process can be increased through Public-Private Partnership (PPP) model. A cost-sharing strategy can help minimize the financial woes of R&D in agri sector and encourage various stakeholders like local government, private sector to conduct agricultural research programs to inform and educate small-marginal, poor farmers about good production, says the study.

Such a mechanism would result in enhancing production of goods, services and technologies which cannot be produced alone by either of the sectors. PPP would effectively utilize global resources for development of sustainable agri system across India and good researchers for solving agricultural related problems, further points out the study. In its action plan, Assocham will engage with various State governments to implement a 10-point Action Plan it has prepared to revolutionise agricultural sector in the country. It calls for a dedicated Agriculture Budget and a one-nation-one-market regime to encourage farmers. The chambers would emphasize on 'Soil-to-crop-to-market' in order increase productivity and marketability of farm produce.

The S&P CNX Nifty is currently trading at 5,433.45, lower by 14.05 points or 0.26% after trading as high as 5,447.50 and as low as 5,404.40. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Reliance Infra up by 2.60%, HUL up by 1.77%, BPCL up by 1.60%, Reliance Capital up by 1.50% and SBI up by 1.44%.

On the flip side, Ambuja Cement down by 3.87%, IDFC down by 3.24%, ACC down by 2.01%, TCS down by 2.01%, and Bajaj Auto down 1.73% were the major losers on the index.

All of Asian markets got butchered in the session as Shanghai Composite plunged 1.52%, Hang Seng plummeted 1.75%, Jakarta Composite got pounded by 1.42%, KLSE Composite declined 0.13%, Nikkei 225 shaved off 1.70%, Straits Times sank 1.16%, Seoul Composite got pulverized by 1.91% and Taiwan Weighted got battered by 2%.

The European markets too are trading in red, with France's CAC 40 slipped 0.94%, Germany's DAX eased 0.42% and London's FTSE shed 0.58%.

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