MOMENTUM HALTED

Indian benchmark equity indices failed to capitalize on the early momentum and are trading off the day's high levels as sentiments got undermined by the disappointing third quarter GDP growth numbers. Economic activity in the country expanded at its weakest annual pace in almost three years in the three months to December, largely because high interest rates and rising input costs constrained investment and manufacturing. However, hefty gains in Oil and Gas heavyweights like ONGC and Reliance which also have significant weightage on the benchmark indices capped the downside chances for the equity gauges. ONGC shares got filliped after government approved decision of divesting 5 percent holding in the company through stock exchange mechanism. The government is eyeing to raise $2.5 billion by selling shares at a premium to ONGC's Tuesday closing price of Rs 283.40. On the BSE sectoral front, there absolutely no laggard however, profit booking in some banking stocks capped the gains in the index. Market participants remained optimistic as sentiments also remained influenced by sanguine cues. Apart from upbeat US consumer confidence data encouraging Japanese industrial production data which expanded at a better than expected pace of 2 percent in January from the previous month along with South Korea's factory output data which grew 3.3 percent exceeding estimates also underpinned sentiments. Also high hopes associated with European Central Bank's second 3-year long-term refinancing operation (LTRO) later in the day more than offset the lingering European debt worries. On the global front, Asian markets are largely trading on an optimistic note while European stock futures too are indicating a higher opening for the markets there as ECB prepared to make a second round of large-scale three-year loans to the continent's banks.

Moreover, the broader markets recovered from their intraday lows and are trading largely in tandem with their larger peers with around a percent gain. The bourses surged on good volumes while market breadth on BSE was dominantly in favor of advances in the ratio of 1638:990 while 104 scrips remained unchanged.

The BSE Sensex is currently trading at 17,912.76 up by 181.64 points or 1.02% after trading as high as 18,001.35 and as low as 17,815.91. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index surged 1.24% and Small cap climbed 0.99%.

On the BSE sectoral space, Oil & Gas up 2.52%, PSU up 2.07%, Realty up 1.81%, Power up 1.33% and Metal up 1.23% while there were no losers in the space.

ONGC up 4.14%, RIL up 2.84%, Bajaj Auto up 2.71%, Tata Steel up 2.41% and BHEL up 2.27% were the major gainers on the Sensex, while Jindal Steel down 0.61%, L&T down 0.50%, HDFC Bank down 0.43%, Maruti down 0.33% and GAIL down 0.04% were the major losers in the index.

Meanwhile, the pace of economic growth slowed substantially in the October-December quarter as GDP growth rate slipped to lowest levels in last ten quarters at 6.1 percent. Growth in GDP at factor cost during Q3, 2011-12, at 2004-05 prices, is estimated at 6.1 percent as compared to the growth rate of 8.3 percent in Q3, 2010-11.

The growth in GDP at factor cost during Q3, 2011-12, at 2004-05 prices, is estimated at 2.7 percent in 'agriculture, forestry and fishing' sector, 2.6 percent in industry and 8.9 percent in services sector. The 'agriculture, forestry and fishing' sector has shown a growth of 2.7 percent in its GDP during Q3, 2011-12, as against the 11 percent growth rate of corresponding period last year.

GDP growth in mining and quarrying declined to (-) 3.1 percent during Q3, 2011-12. The GDP in manufacturing sector is estimated at 0.4 percent during Q3, 2011-12. GDP in electricity sector is estimated at 9 per cent during Q3, 2011-12.

The S&P CNX Nifty is currently trading at 5,427.75, higher by 52.25 points or 0.97% after trading as high as 5,458.80 and as low as 5,400.25. There were 39 stocks advancing against 11 declines on the index.

The top gainers on the Nifty were ONGC up 4.20%, SAIL up 3.01%, IDFC up 3%, Bajaj Auto up 2.94% and Reliance up 2.83%.

Siemens down 1.23%, Dr Reddy's down 1.01%, Jindal Steel down 0.75%, L&T down 0.64% and Kotak Bank down 0.49% were the major losers on the index.

In the Asian space, Hang Seng gained 0.14%, Jakarta Composite surged 1.72%, KLSE Composite climbed 0.85%, Nikkei 225 inched up 0.01%, Straits Times advanced 0.62%, Seoul Composite soared 1.33% and Taiwan Weighted jumped 2.04%.

On the flipside only Shanghai Composite plunged 0.96%