MARKETS TURN NEGATIVE

The BSE Sensex and NSE Nifty, which opened on a firm note erased all early gains and drifted down into the negative zone on spike in inflation for April. Meanwhile headline inflation jumped to 7.23% in April as against 6.89% in previous month. Manufacturing products inflation increased at 5.12% versus 4.87% while food inflation moved up at 10.49% versus 9.94% during the same period. On sectoral front nanks turned lower on less hopes of further rate cut due to increase in inflation. Consumer durables and healthcare stocks were among the notable gainers. Bank, capital goods and PSU stocks are off their highs. Information technology stocks too have pared most of their early gains. On the global front, Asian shares were trading mixed. Back home, the market breadth favoring negative trend; there were 1,018 shares on the gaining side against 1,237 shares on the losing side while 119 shares remained unchanged.

The BSE Sensex is currently trading at 16,225.86, down by 67.12 points or 0.41%. The index has touched a high and low of 16,390.33 and 16,206.59 respectively. There were 10 stocks advancing against 20 declines on the index.

The broader indices also following benchmarks; the BSE Mid cap and Small cap indices were down by 0.75% and 0.31% respectively.

The only gaining sectoral indices on the BSE were, CD up by 0.23% and HC up by 0.33%. While, Bankex down by 1.16%, Power down by 0.90%, PSU down by 0.87%, Realty down by 0.78% and Oil and Gas down by 0.67% were the losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 1.57%, Mahindra & Mahindra up by 0.83%, Sun Pharma up by 0.74%, Maruti Suzuki up by 0.49% and Gail India up by 0.47%.

On the flip side, ONGC down by 2.42%, SBI down by 1.74%, Tata Motors down by 1.68%, DLF down by 1.25% and BHEL down by 1.24% were the top losers on the Sensex.

Meanwhile, the annual rate of inflation, based on index numbers of wholesale prices (WPI) in India, unexpectedly accelerated in the month of April as it came in at 7.23% as compared to 6.89% for the previous month and 9.74% during the corresponding month of the previous year. Build up inflation in the financial year so far was 2.07% compared to a build up of 1.74% in the corresponding period of the previous year.

The index for primary articles group, which has a weightage of 20.12% in overall WPI, rose by 4.7 percent to 215.9 from 206.3 for the previous month. The index for fuel and power group with a weightage of 14.91% in WPI rose by 1.8% to 177.1 from 174.0 for the previous month. The index of Manufactured Products group (weight 64.97% of WPI) rose by 1.0% to 143.6 from 142.2 for the previous month.

India's wholesale price index has taken everyone by surprise as it quickened in the month of April amid consensus expectations of a moderation in the rate of price rise to 6.7%. In the backdrop of sharp contraction in industrial production and rise in WPI inflation, the Indian Reserve Bank remains in a tight spot as it finds itself trapped between curbing inflation and trying to shore up economic growth.

The S&P CNX Nifty is currently trading at 4,904.05, down by 24.85 points or 0.50%. The index has touched a high and low of 4,957.20 and 4,896.55 respectively. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were Bajaj Auto up by 1.40%, M&M up by 1.04%, Sesa Goa up by 1.01%, BPCL Industries up by 0.94% and Wipro up by 0.84%.

While JP Associates down by 3.26%, Bank of Baroda down by 2.67%, HCL Technologies down by 2.49%, Ambuja Cement down by 2.09% and SAIL down by 1.96%, were the major losers on the index.

Asian equity indices continued to trade on mixed note; Shanghai Composite was up by 0.10%, Nikkei 225 added 0.23% and Straits Times rose 0.16%.

On the flip side, Hang Seng down 0.30%, Jakarta Composite declined by 0.55%, KLSE Composite lost 0.14%, KOSPI Composite slid 0.18% and Taiwan Weighted shed 0.33%.