FLAT MARKETS

The Indian equity markets are trading on a flat note after making a firm start taking positive cues from the US markets. The US markets extended their gains on Monday, though there were no important economic reports but the earnings and some merger news kept the markets buzzing, though Asian markets were trading mostly in the negative terrain. Back home, markets made a strong start as CSO has projected a good growth for the nation in the fiscal, but the domestic markets paired most of their early gains as selling pressure was witnessed in broader indices. On the sectoral front, technology, fast moving consumer goods and software were the top gainers in trade; on the other hand capital goods, realty and consumer durables were the major losers on the BSE sectoral space. The broader indices were trading in the red. Index heavyweight Reliance Industries was trading with a cut of more than half a percent, while Punj Lloyd bleeding so hard and trading with a cut of more than 7% after reporting a weak Q3 numbers. The market breadth on the BSE was negative; there were 706 shares on the gaining side against 891 shares on the losing side while 75 shares remained unchanged.

The BSE Sensex opened at 18,141.51; about 103 points higher compared to its previous closing of 18,037.19, and has touched a low of 18,001.65 while high remain its opening.

The index is currently trading at 18,047.14, up by 9.95 points or 0.06%. There were 13 stocks advancing against 17 declines while on the index.

The overall market breadth started in the negative terrain, with 42.22% stocks advancing against 53.29% declines. The broader indices were trading in the red; the BSE Mid cap and Small cap indices were up by 0.24% and 0.21%, respectively.

The top gaining sectoral indices on the BSE were, TECk up by 0.51%, FMCG up by 0.42%, IT up by 0.34%, Power up by 0.32% and PSU was up by 0.29%. While, CG down by 0.59%, Realty down by 0.53%, CD down by 0.46%, Oil and Gas down by 0.30% and HC down by 0.30% were the major losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 1.56%, Bharti Airtel up by 1.41%, Cipla up by 1.35%, NTPC up by 0.92% and Wipro was up by 0.63%.

M&M down by 2.44%, JP Associates down by 1.17%, ONGC down by 1.06%, L&T down by 0.90% and ICICI Bank down by 0.86% were the top losers on the index were.

Meanwhile, the biggest macroeconomic challenge that the Indian economy was facing was rigid inflationary scenario, said the Chairman of Economic Advisory Council to the Prime Minister (PMEAC) on Saturday, adding that both government and central bank will need to take steps to counter the challenge posed by surging food prices.

Rangarajan said that inflation was mainly being driven by the high prices of food commodities and the government while was expecting it to moderate in 2011, more steps were required for a sustainable solution to the problem. He said the 8.43% year-on-year inflation seen in Dec 2010 was expected to come down to around 7% by March 2011. But the supply side needed a lot of work to get inflation sustainable below 5%.

While delivering the fifth G K Sundaram Endowment lecture organized by the South India Cotton Association here on Friday he said that long terms solutions like more investment in the farm sector in order to develop more irrigation facilities that will help facing a low rain year in a better way and improving the efficiency and capacity of the public food storage facilities should be implemented.

In its last policy review held on Jan 25, the RBI too had hiked its March-end 2011 inflation projection substantially to 7% compared with 5.5% given earlier. This clearly reflects that even the central bank has been under-estimating inflation pressures, or that the expected downside from factors like a strong Kharif harvest and six rounds of policy tightening by RBI has not materialized to the extent anticipated by policy makers.

On the growth front the Chairman said that with savings rate touching 34% and investments having exceeded 36% of the GDP, the country could achieve 9% GDP expansion in a sustained way. 'The broad economic parameters relating to savings and investment are conducive for growth. Despite the financial crisis, the economy grew at an average pace of 8.5% between 2005-06 and 2009-10. This clearly represented acceleration in the pace of growth and marks a distinct break from any previous five year period," he said.

The S&P CNX Nifty opened at 5,432.35; about 36 points higher compared to its previous closing of 5,396.00, and has touched a low of 5,388.75 while high remain its opening.

The index is currently trading at 5,399.15, down by 3.15 points or 0.06%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Suzlon up by 3.43%, BPCL up by 2.94%, Bharti Airtel up by 1.78%, Bajaj Auto up by 1.49% and Cipla up by 1.37%.

The top losers of the index were Sunpharma down by 3.49%, JP Associates down by 2.99%, M&M down by 2.18%, ONGC down by 1.48% and Hero Honda was down by 1.11%.

Asian markets were trading mostly in the red; Hang Seng was down 108.10 points or 0.46% to 23,445.49, Jakarta Composite was down 8.67 points or 0.25% to 3,479.04, Straits Times was down 7.81 points or 0.24% to 3,184.37, Seoul Composite was down 3.91 points or 0.19% to 2,077.83 and Taiwan Weighted was down by 10.95 points or 0.12% to 9,134.40.

On the flip side, KLSE Composite was up 5.16 points or 0.34% to 1,540.76 and Nikkei 225 was up 44.86 points or 0.42% to 10,636.90.