Sensex moving towards positive zone; Nifty turns green

The Indian equity markets were viewing the willingness to move into the green zone. Sensex was shifting towards positive mark but currently trading in negative, while Nifty turned green with some bit of buying in the non-index counters. Meanwhile, the RBI is expected to release its draft guidelines on new private bank licenses, moves which are being closely watched by many Indian corporates who are eager to enter the banking sector. On sectoral front stocks from FMCG, Metal and PSU sectors losing ground on a moderately severe bout of selling pressure. Few stocks from oil, healthcare, auto and power sectors too have drifted lower. IT and consumer durable stocks were trading firm. Capital goods and realty stocks are finding modest support. On the global front, Asian markets were trading in positive zone. Back home, the market breadth too favoring positive trend; there were 1,375 shares on the gaining side against 943 shares on the losing side while 93 shares remained unchanged.

The BSE Sensex is currently trading at 16,330.24 down by 11.46 points or 0.07%. The index has touched a high and low of 16,446.85 and 16,213.18 respectively.  There were 12 stocks advancing against 18 declines on the index.

The broader indices were showcasing positive trend; the Mid cap index and Small cap index was up by 0.39% and 0.69% respectively 

The top gaining sectoral indices on the BSE were, IT up by 1.47%, TECk up by 1.42%, CD up by 1.01%, CG up by 0.86 and Reality up by 0.19%. While, FMCG down by 0.60%, Metal down by 0.60% PSU down by 0.58%, Oil & Gas down by 0.52% and HC down by 0.43% were the top losers on the index.

The top gainers on the Sensex were Bajaj Auto up 7.18%, Jaiprakash Associate up by 4.87%, Bharti Airtel up by 4.42%, Jindal Steel up by 4.23%, and TCS up by 2.44%.

On the flip side, Coal India down by 2.88%, Cipla down by 2.64%, Wipro down by 1.62%, M&M down by 1.59% and DLF down by 1.47% were the top losers on the Sensex.

Meanwhile, amid of uncertainties in the global economy, Prime Minister Manmohan Singh expects Indian economy to grow around 8% or a little more in the current financial year. The Prime Minister's growth expectation for the current fiscal is in line with the estimates of the Reserve Bank of India (RBI) and the Prime Minister's Economic Advisory Council (PMEAC). However, it is below than the 8.5% estimated by the finance ministry and other policymakers.

Experts are of the view that, RBI's nonstop hike in its key policy rates has begun to show its impact on the India's growth. In order to curb inflation in the Asia's third largest economy, since March 2010, the RBI has increased its short term lending and borrowing rates for 11 times. The RBI has said taming inflation is its top priority and it is ready to sacrifice some growth in the short term to calm prices.  

'Our own economy has also slowed down compared to last year, and this year's growth may be around 8% or a little more, at best,' Singh said. The government has consistently been revising their estimates on growth and inflation on account of the uncertainties in international situation, which deteriorated following the debt problems in the US and Europe. Earlier, hovering international crude oil price had put significant pressure on the government's fiscal health and fueled inflation in the domestic economy.

In July, the PMEAC, chaired by former RBI governor C Rangarajan had revised downward its GDP projection for the current fiscal year at 8.2% from 9% made earlier. Prime Minister said the transition to 9% growth in the 12th Plan period is an ambitious target given the state of the global economy. 'Since we have already achieved about 8.2% in the 11th Plan period, it may seem that a transition to 9% growth is not difficult. However, it is in fact a very ambitious target given the current global economic situation, which is full of uncertainties about the prospects in industrialized countries and their implications for global capital markets,' Prime Minister said.

By adding further he said, the economy has the inherent strength to achieve 9% growth but cautioned that some difficult decisions needed to be taken to reach the goal.  By giving example of other Asian economies, he said many countries have grown rapidly at 9-10% per year for two or three decades before slowing down and cited the examples of Japan, Korea and the rapid growth of China.

'India is now capable of repeating the performance of this group of Asian countries. But we must remember that it will not happen automatically, by simply proceeding on a business-as-usual basis. There are many difficult challenges we must overcome to achieve the transition to 9% growth,' Prime Minister added. Since last year, the government is trying to fend off allegations of corruption. This has halted important economic reforms which are required to achieve robust growth.

The S&P CNX Nifty is currently trading at 4,898.85, up by 0.05 points or 0.00%.  The index has touched a high and low of 4,927.70 and 4,863.80 respectively. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were TCS up by 3.94%, Bajaj Auto up by 3.70%, Axis Bank up by 2.21%, Bharti Airtel up by 2.08% and BHEL up by 1.79%.

On the flip side, Cipla down by 2.84%, IDFC down by 2.47%, Tata Motors down by 1.59%, Wipro down by 1.46% and NTPC down by 1.43%%, were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up 0.81%, Hang Seng was up by 0.85%, Jakarta Composite was up by 0.44%, KLSE Composite was up by 0.08%, Nikkei 225 was up by 1.20%, Straits Times was up by 0.63%, Seoul Composite was up by 3.99% and Taiwan Weighted was up by 3.25%. 

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