Equity markets trade flat; weekly food inflation cools down

The Indian equity markets continue to trade flat with positive bias lacking any particular direction in the late morning session. Nifty was trading in a range of 5550-5570. The investors are waiting for some trigger to get direction on either side, which could be RBI policy. Meanwhile food articles inflation has cooled down to 7.58% versus 8.31% while, Primary articles inflation for week ended July 9 has came at 11.13% versus 11.58% (WoW),fuel group inflation remained unchanged at 11.89% (WoW).  Back on street, on sectoral front select stocks from FMCG, information technology, PSU and TECk sectors are trading firm, while stocks from consumer durables, realty, healthcare and banking sections are mostly trading weak. MindTree and Petronet LNG shot up more than 10% & 5%, respectively on posting strong numbers. On the global front most of the Asian markets were trading in a positive territory on some resolution from Europe and US on their debt problems. Back home, the market breadth is negative; there were 1209 shares on the gaining side against 1386 shares on the losing side while 118 shares remained unchanged.

The BSE Sensex is currently trading at 18,553.29, up by 50.91 points or 0.28%. The index has touched a high and low of 18,566.99 and 18,419.98 respectively. There were 18 stocks advancing against 12 declines on the index.

The broader indices were trading marginally up; the BSE Mid cap and Small cap indices were up by 0.04% and 0.11% respectively.

The top gaining sectoral indices on the BSE were, FMCG up by 0.55%, IT up by 0.49%, PSU up by 0.33%, TECK up by 0.28% and CG up by 0.28%. While, CD down by 0.85%, HC down by 0.53%, Realty down by 0.32%, Bankex down by 0.11% and Metal down by 0.06% were the top losers on the index.

The top gainers on the Sensex were Tata Motors up by 1.47%, HUL up by 1.09%, ONGC up by 1.07%, Infosys up by 0.91% and HDFC was up by 0.80%.

On the flip side, RCom down by 1.27%, Hero Honda down by 0.89% BHEL down by 0.76%, Cipla down by 0.69% and Hindalco down by 0.61% were the top losers on the Sensex.

Meanwhile, the finance ministry has given its in principle approval to Department of Industrial Policy and Promotion (DIPP's) proposal to exempt small and medium enterprises (SMEs) from capital gains tax. This move of government is likely to have positive effect on the investment and finance of SMEs.

The policy would be expanded to also allow individuals to sell off personal assets and be exempt from capital gains tax on the sale, as long as the proceeds were being used as an investment into a small enterprise operating in India. If proven to be effective, the new policy will have a significant positive effect on the economy, and would also boost employment levels.

R.P. Singh, secretary, DIPP, said 'One of the key proposals in the National Manufacturing Policy to improve access to finance for SMEs was the exemption from capital gains for investment in an enterprise as is done in the case of investment in residential property,' 'The in principle nod to the proposal by the revenue department would go a long way in enabling a large number of entrepreneurs to raise equity by selling ancestral properties and raise their level of investments and thereby boost employment,' R.P. Singh added.

In June, a high-level committee on manufacturing, headed by Prime Minister Manmohan Singh, gave an in-principle approval to the draft policy, even as it set up a committee under the chairmanship of T.K.A. Nair, principal secretary to the Prime Minister, for further consultations on contentious issues related to labour and environment laws. The policy intends to provide incentives to Indian firms through tax concessions, subsidies and relaxation of labour laws.

The S&P CNX Nifty is currently trading at 5,571.05, up by 4.00 points or 0.07%. The index has touched a high and low of 5,578.90 and 5,536.25 respectively. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Tata Motors up by 1.47%, Siemens up by 1.25%, HUL up by 0.98%, Infosys up by 0.97% and ONGC up by 0.93%. While Sesa Goa down by 2.51%, IDFC down by 2.10%, Axis Bank down by 1.48%, BHEL down by 1.20% and RCOM down by 1.16% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite declined 0.72%, Seoul Composite slid 0.46%

On the flip side, Hang Seng was up by 0.09%, Jakarta Composite gained 0.11%, KLSE Composite inched up by 0.01%, Taiwan Weighted edged higher by 0.13% and Straits Times up 0.19% were the gainers in the Asian pack while Nikkei 225 was trading on a flat note. 

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