Local equity markets tread water ahead of the weekly Food Inflation data

Local equity markets reversing their gains have entered the "red territory" tailing Asian peers that have led to a reduction in risk appetite among investor's. The markets are also treading water as traders are cautious of building position ahead of the weekly food inflation data, which has also drove down the rate sensitive counters- Auto and Bankex. Meanwhile, oil marketing companies such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum are also sulking in red with a cut of over 1.5% after the reports that the much awaited EGoM meet had yet again been deferred, where a decision on raising prices of diesel, kerosene and cooking gas, needed to rein in the fiscal gap was suppose to be taken. Also hurting were these stocks were the soaring prices of crude oil which shot up on Wednesday after OPEC failed to reach a deal to increase output, raising fears of supply shortages later this year that could fuel a further price rally, imperiling the economic recovery.

On the global front, US markets ended down for the sixth straight session as S&P 500 Index continuing its longest losing streak since February 2009 ended down since investors worried a slowing economy could deepen its retreat and wipe out this year's gains. Meanwhile, the Asian shares picking up the negative global leads were also trading lower. However, the US future indices were showing an uptick in the screen trade. Back home, the 30 share index Sensex entering the red zone was trading around its neutral line, while the 50 share index, Nifty, despite losing over 10 points held onto its 5500 mark. Besides that, the broader indices despite unwinding gains were afloat in green with a gain of over 0.05% each. The overall market breadth on BSE was slightly more in the favour of advances which outpaced declines in the ratio of 1089:1018, while 90 shares remained unchanged on the index.

The BSE Sensex is currently trading at 18,376.36, down by 17.93 points or 0.10%. The index has touched a high and low of 18,449.64 and 18,348.24respectively.There were 9 stocks advancing against 20 declines on the index, while 1 stock remained unchanged.

The broader indices were afloat in the green; the BSE Mid cap and Small cap indices were up by 0.08% and 0.55% respectively.

The top gaining sectoral indices on the BSE were, CD up by 0.44%, CG was up by 0.38%, Power up by 0.21%, Oil & Gas up by 0.08% and Metal up by 0.01%, Bankex up by 0.35% and. While, Auto down by 0.63%, Realty down by 0.41%, FMCG down by 0.33%, Healthcare down by 0.25% and Bankex down by 0.23% were the only losers on the index.

The top gainers on the Sensex were NTPC up by 1.40%, TCS up by 0.80%, RIL up by 0.65%, Tata Steel up by 0.60% and BHEL up by 0.59%.

On the flip side, RCom down by 1.70%, Tata Motors down by 1.63%, Maruti Suzuki down by 1.02%,State Bank of India down by 0.93% and Wipro down by 0.84%were the top losers on the index.

Meanwhile, the slow economic expansion had made Finance Minister to change his optimistic tune on the growth of economy for the current fiscal year and he has raised concerns over the missing the revenue collection target due to slow economic growth. Finance Minister Pranab Mukherjee expects economy to grow by 8.75% as against the budget estimate of 9%.

At the annual conference of chief commissions Director Generals of the Central Board of Excise and Customs (CBEC), Pranab Mukherjee said, "For realizing the revenue target of Rs 3, 92,908 crore for 2011-12, you would need a growth of nearly 15 per cent. The task before you is very challenging and will require sustained and strategic efforts throughout the financial year".

The experts and analysts see Finance Minister's comment on the revenue as the formal admission by the government that it had a doubts on being able to meet its tax collection targets, which may in turn have unplanned effects on the raft of the other macro-economic figures. The government have budgeted an 18.5% growth in gross revenue for this financial year. This includes a 17.4% growth in the indirect tax collection and 19.4% rise in direct tax collection. These targets were set with the assumption of 9% growth in current financial year. But due to increased global commodity prices and high inflation had posed a great risk in achieving this target.

However, Finance minister said, the economy might not be able to achieve the 9% growth projected in the Budget, but with "hard work" it would surely be possible to grow at 8.75% with a variation of 0.25 per cent. Although, high interest rate and inflationary pressure had started hampering India's economic expansion and the situation would be more vulnerable, if central bank follow its trend of hiking the policy rate to bring inflation in comfort zone of 4 to 5%.The S&P CNX Nifty is currently trading at 5,516.55, down by 10.30 points or 0.19%. The index has touched a high and low of 5,538.60 and 5,509.35 respectively. There were 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were SAIL up by 1.32%, NTPC up by 1.25%, Axis Bank up by 0.74%, BHEL up by 0.69% and TCS up by 0.60%.

HCL Tech down by 1.85%, BPCL down by 1.91%, RCom down by 1.80%, Tata Motors down by 1.70%, Reliance Communication down by 1.54% and Grasim by 1.05% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 0.64%, Hang Seng plunged 1.04%, Jakarta Composite dropped 0.37%, Nikkei 225 shed 0.27%, Seoul Composite trimmed 0.16% and Straits Times lowered by 0.04%On the flip side, Taiwan Weighted gained 0.02% and KLSE Composite added 0.10%

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