MARKETS TRADE FLAT

A bout of volatility was witnessed in early trade as Indian equity markets turned flat in the morning session, after making a gap-up start, due to profit-taking by funds and retail investors in select stocks amid a mixed trend in the Asian markets. Even global markets are mixed due to lack of economic data, though Greece missed another deadline for debt deal. Moreover, investors remained concerned over whether the wrangling over Greece's debt restructuring talks would eventually be resolved or trigger contagion across other euro zone countries. On the domestic front, in its move to improve liquidity situation, RBI opined that repurchase of government securities that have been contracted for sale will be allowed for transaction. Meanwhile, IT stocks rose on a recent slew of positive economic data in the US. Index heavyweight, Reliance Industries up by over a percentage point too provided some strength to markets. On the sectoral front, oil and gas, consumer durable and healthcare remained the top gainers while, realty capital goods and power remained the only losers on the index. The broader indices were going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 1,040 shares on the gaining side against 652 shares on the losing side while 63 shares remained unchanged.

The BSE Sensex opened at 17,813.74; about 104 points higher compared to its previous closing of 17,707.31, and has touched a high and a low of 17,828.71 and 17,720.69 respectively.

The index is currently trading at 17,736.89, up by 29.58 points or 0.14%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a positive start with 59.26% stocks advancing against 37.15% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices surged 0.14% and 0.36% respectively.

The top gaining sectoral indices on the BSE were Oil and Gas up by 0.91%, CD up by 0.73%, HC up by 0.59%, PSU up by 0.53% and IT up by 0.47%. While, Realty down by 0.61%, CG down by 0.36% and Power down by 0.12% were the only losers on the index.

The top gainers on the Sensex were Hero MotoCorp up by 1.65%, Tata Power up by 1.44%, RIL up by 1.22%, TCS up by 0.99% and Jindal Steel up by 0.56%.

On the flip side, Bharti Airtel was down by 1.69%, DLF was down by 1.28%, HUL was down by 1.24%, Maruti Suzuki was down by 0.83% and BHEL was down by 0.76% were the top losers on the Sensex.

Meanwhile, credit disbursement to the priority sector has grown by a meager 5% in December 2011 as compared to the same period last year. A decline in micro credit along with lower off-take in the agriculture and MSME (Micro, Small and Medium Enterprises) segments, have brought down growth, which stood at 29.2% in December 2010. So far, this is the lowest rate of growth in lending to these crucial sectors in the current fiscal.

According to the Reserve Bank of India (RBI) data, credit disbursement to the priority sector stood at Rs 12.76 lakh crore in December 2011, compared to Rs 12.14 lakh crore in December 2010. In December, bank disbursements for agriculture and allied activities went up by a meagre 5.6% to Rs 4.60 lakh crore. In December 2010, credit disbursement to the segment had gone up by 25.4% on an annual basis to Rs 4.36 lakh crore.

Similarly, growth in off-take by MSMEs slowed to 11.1% at Rs 4.82 lakh crore in December 2011. Bank credit disbursement to the sector had increased by 29.6% to Rs 4.34 lakh crore in December, 2010. Micro credit witnessed a decline of 27.1% to Rs 21,000 crore in December 2011 as compared to over 52% (Rs 28,820 crore) in the same month of the previous year. Credit to the housing sector stood at Rs 2.40 lakh crore in December, 2011, growing at a meagre 2.3% y-o-y, where growth in credit to housing stood at 10.7% in December, 2010, with the disbursement of Rs 2.35 lakh crore.    

Bank credit disbursement to weaker sections grew by 11.1% to Rs 2.15 lakh crore during the month under review. Credit off-take by weaker sections from banks rose at an annualized rate of 28.2% to Rs 1.93 lakh crore in December, 2010. Though loans to some priority sectors like agriculture and to weaker sections are disbursed at an interest rate lower than prime lending rates, other segments do not fall under the subsidized lending regime.

The S&P CNX Nifty opened at 5,412.95; about 51 points higher compared to its previous closing of 5,361.65, and has touched a high and a low of 5,413.35 and 5,362.15 respectively.

The index is currently trading at 5,368.05, higher by 6.40 points or 0.12%. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Cairn up by 3.39%, Hero MotoCorp up by 1.61%, Tata Power up by 1.40%, RIL up by 1.16% and Ranbaxy up by 1.09%.

Bharti Airtel down by 1.86%, ACC down by 1.44%, HUL down by 1.40%, DLF by 1.34% and JP Associates down by 1.10%, were the major losers on the index.

Asian equity indices were trading flat; Shanghai Composite was down 44.96 points or 1.93% to 2,286.17, Hang Seng was down 32.83 points or 0.16% to 20,677.11, Jakarta Composite was down 41.26 points or 1.04% to 3,933.52 and Nikkei 225 was down by 35.15 points or 0.39% to 8,894.05.

On the flip side, Straits Times was up 5.07 points or 0.17% to 2,945.17, Seoul Composite was up 1.77 points or 0.09% to 1,974.90 and Taiwan Weighted was up by 8.44 points or 0.11% to 7,696.42.