SLENDER GAINS

Though the domestic equity markets have recovered from early mild setback but are still gyrating in a tight band holding up slender gains. Selective buying by funds and retail investors in stocks having strong fundamentals and a firming trend on other Asian bourses has mainly supported the trading sentiment here, however, the weakness in Wipro after software services exporter's reported weak guidance has disappointed investors leading to the weakness around the IT space. Wipro has projected muted growth for its mainstay information technology services business and said wage hikes would hurt operating margins this year. However, encouraging leads from global markets has been pushing the market's breadth on the positive end as Asian markets gained. Back home, besides IT, stocks from Bankex counter on the BSE Sectoral space too are spreading weakness. But the gains in broader indices, presently ruling up by 0.50% each have restricted local markets fall. Meanwhile, the 30 scrip barometer index Sensex, after touching a low of 19,541.16 is presently trading in green, while the widely followed benchmark index on NSE--Nifty-- is currently trading above 5800 mark. The overall market breadth on BSE was in the favour of advances which have thumped declines in the ratio of 1470:816, while 90 shares remained unchanged.

The BSE Sensex is currently trading at 19,588.05, up by 42.70 points or 0.22%. The index has touched a high and low of 19,633.63and 19,541.16 respectively. There were 18 stocks advancing against 12 declines on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.61% and 0.86% respectively. 

The top gaining sectoral indices on the BSE were, CD up by 1.03%, Auto up by 0.89%, PSU up by 0.70%, Realty up by 0.65% and FMCG was up by 0.58%. While IT and Bankex down by 0.08% each, were the losers on the index.

The top gainers on the Sensex were M&M up by 1.95% ONGC up by 1.50%, Bharti Airtel up by 1.31%, DLF up by 1.20% and Maruti Suzuki up by 1.14%.

On the flip side, Wipro down by 3.13%, Tata Power down by 0.91%, SBI down by 0.49%, BHEL down by 0.36% and HDFC Bank down by 0.36% were the top losers on the index.

Meanwhile, continuous increases in food and fuel prices could have significant impact on growth in emerging Asian economies over the next two years, says a recent report released by the Asian Development Bank (ADB). The report cautions that if inflation continues to remain high, it can neutralize some of the gains made on the poverty front in recent years.

The multilateral lender cautioned that rising food prices was a major challenge for policy makers and it could shave between 40-150 basis points off the gross domestic product (GDP) in each of Asia's largest developing economies this year and next, including in India and China. However, if prices could be kept in control, the region will see a strong growth of 7.8% over the current year.

Inflation continues to remain the single biggest challenge for the region, with global commodity rally adding further fuel to already high food prices. This has sparked widespread monetary tightening in both India and China and is also set to boost fuel subsidies in these countries if crude oil prices continue to remain anywhere close to their current levels. Some of the countries, in particular China and Indonesia, have even allowed their currencies to strengthen somewhat in an attempt to dampen the cost of imported commodities.

However, a country like India does not have enough room for significant currency appreciation owing to its weaker current account balance. In this wake, the Indian government will have to try to look at supply side measures to improve the food supplies while at the same time try to cut fuel subsidies that can have very negative impact on its sovereign finances. If the country fails to tackle the surging inflation, it could push another 50 million people into poverty, according to ADB estimates. 

The Bank also urged that it was necessary that in such times countries did not ban the export of food commodities as that would only further boost the problem. "To avert this looming crisis it is important for countries to refrain from imposing export bans on food items, while strengthening social safety nets," said the ADB in a statement released on Tuesday. It recommended that efforts to stabilize food production should take center stage and greater investments in agricultural infrastructure to increase crop production and expand storage facilities should be undertaken.

The S&P CNX Nifty is currently trading at 5,876.75, higher by 8.35 points or 0.14%. The index has touched a high and low of 5,892.35 and 5,862.85 respectively.  There were 28 stocks advancing against 21 declines, while 1 stock on the index remained unchanged.

The top gainers of the Nifty were M&M up by 2.31%, ONGC up by 1.60%, Siemens up by 1.51%, DLF up by 1.28% and Hero Honda up by 1.22%.

Wipro down by 3.56%, Ambuja Cement down by 1.87 %, ACC down by 0.96 %, Tata Power down by 0.88% and PNB was down by 0.64%, were the major losers on the index.

Most of the  Asian counterparts were trading in the green; Shanghai Composite gained 0.23%, Hang Seng added 0.41%, Jakarta Composite rose 0.52%, KLSE Composite was up by 0.34%, Nikkei 225 surged 1.45%, Straits Times increased 0.50%, Seoul Composite was up 4.26 points or 0.19% to 2,210.56 and Taiwan Weighted zoomed 1.16%

On the  flip side, Seoul Composite down by 0.26% was the lone looser in the Asian pack.