Markets trading flat: Nifty holds 5,600 level

The Indian equity markets are trading flat in the late morning session after a moderate decline in the mid morning trade. The market has retreated a bit due to some profit taking at select blue chip counters. On the sectoral front realty sector was leading with 3% gains. DLF, Sobha Developers, Peninsula Land, Anant Raj Industries, Indiabulls Real Estate and HDIL were the top gainers among the realty stocks.  Bank, auto and consumer durables were showing some support too while capital goods and metal index were the top sectoral loser followed by the metal index. However on global front, Asian markets were trading in green on easing worries about Greece's debt crisis, and fairly sustained buying by foreign institutional investors. Back home, market breadth remains to be in positive; there were 1,640 shares on the gaining side against 896 shares on the losing side while 93 shares remained unchanged.

The BSE Sensex is currently trading at 18,820.60, up by 57.80 points or 0.31%. The index has touched a high and low of 18,942.42 and 18,782.34 respectively. There were 21 stocks advancing against just 9 declines on the index.

The broader indices are following the benchmarks; the BSE Mid cap and Small cap indices were up by 0.66% and 0.82% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 3.04%, Bankex up by 0.91%, Auto up by 0.80%, CD up by 0.72% and PSU up by 0.66 %. While, CG down by 0.48% and Metal down by 0.04% were the major losers on the index.

The top gainers on the Sensex were DLF up by 4.92%, Reliance Infrastructure up by 4.19%, Tata Motors up by 1.71%, RCom up by 1.59% and Jaiprakash Associate up by 1.29%.

On the flip side, Tata Steel was down by 1.43%, L&T down by 1.12%, NTPC down by 0.54%, Maruti Suzuki down by 0.50% and BHEL down by 0.28% were the top losers on the Sensex.

The surging inflation, volatile commodities and crude oil prices has made dent in India's growth story. Recently, global rating agency, Fitch Ratings in its Global Economic outlook has downturned India's Gross Domestic Product (GDP) growth target from 8.3% to 7.7% in 2011. The rating agency in its report says 'the growth has clearly hit a soft patch, as GDP grew only 7.8% in the first quarter of 2011 (Q4 of FY11), down from 8.4% in Q4, FY10, and 8.9% in Q3, FY10.'

'A breakdown of GDP by expenditure shows that the slowdown can be largely attributed to a downturn in fixed investments, which grew by only 0.4% in Q1 of 2011. Private sector investment activity not only appears to be affected by higher borrowing costs, but also by other factors like rising input costs, thin profits and rising bureaucratic red tape,' the report notes.

Before Fitch, other international agencies such as International Monetary Fund (IMF) and World Bank (WB) had revised their growth projection downward for the Indian economy for this financial year. Both the agencies have estimated sub-8% growth for this year, in a major drop from 8.5% last year.

Wholesale price index-based inflation has remained high since early 2010, noted the Fitch report, and said, 'Core inflation grew by average of 9.3% in the first five months of 2011, slightly below 9.6% averaged in 2010."Although food inflation has eased from the high 20.9% in the first half of 2010, underlying inflation pressures remain intense.

The economic outlook is likely to remain somewhat clouded by persistent inflationary pressures as the headline measure of WPI inflation has remained high since early 2010,' says the report. After a month-long rally, food inflation plunged to a one and-a-half month low of 7.78% for the week ended June 18, down from 9.13% in the previous week.

The S&P CNX Nifty is currently trading at 5,649.35, higher by 22.15 points or 0.39%. The index has touched a high and low of 5,679.65 and 5,633.10 respectively. There were 35 stocks advancing against 14 declines and one remained stable on the index.

The top gainers of the Nifty were DLF up by 5.04%, Reliance Infra up by 4.35%, Kotak Bank up by 2.39%, IDFC up by 2.33% and Tata Motors up by 2.06 %.

On the flip side, NTPC down by 1.12%, L&T down by 0.98%, Cairn down by 0.86%, Sesa Goa down by 0.70% and Tata Steel down by 0.66% were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite soared by 1.70, Hang Seng surged 1.72%, Jakarta Composite gained 0.84%, KLSE Composite added 0.31%, Nikkei 225 gathered 0.84%, Straits Times rose 0.75%, Seoul Composite was up  by 0.98% and Taiwan Weighted too was up by 0.40% 

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