NEUTRAL LINE

The Indian equity markets are gyrating around their neutral line. While on the global front, the majority of Asian markets were trading in green on hopes that the Federal Reserve and the European Central Bank may signal some stimulus to ramp up growth. Meanwhile,terming high inflation as a bigger danger than the slowest growth in almost a decade, the Reserve Bank of India (RBI) in its much awaited First Quarter Monetary Policy review has left its key policy rates unchanged at 8% (repo) and 7% (reverse repo) respectively. Also, cash reserve ratio (CRR) remained untouched at 4.75%. However, the world's most aggressive central bank, in a surprise has slashed the Statutory Liquidity Ratio (SLR) of scheduled commercial banks from 24% to 23% of their NDTL with effect from the fortnight beginning August 11, 2012.  Meanwhile, the MSF rate determined with a spread of 100 basis points above the repo rate, along with the Bank rate remained unchanged at 9.0%. The monsoon and drought-like situation unfolding in several states was keeping investors cautious, meanwhile the EGoM headed by Agriculture Minister Sharad Pawar is expected to meet today over relief measures to tackle the situation. Traders were seen piling up position in FMCG, HC and Realty sector, while selling was witnessed in Auto, Metal and TECk sector. Meanwhile, software stocks like Wipro, TCS and HCL Technologies were trading in green after Prime Minister Manmohan Singh has set up a panel headed by N Rangachary to review taxes in information technology and R&D sectors. The NSE Nifty and BSE Sensex were managing to hold their psychological 5150 and 17100 levels respectively. The market breadth on BSE was positive in the ratio of 986:939 while 116 scrips remained unchanged.

The BSE Sensex is currently trading at 17157.28 up by 13.60 points or 0.08% after touching a high of 17208.45 and a low of 17112.61. There were 11 stocks advancing against 19 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index was up 0.09%, while Small cap index was up 0.11%.

On the BSE sectoral space, FMCG up by 0.56%, HC up by 0.49%, Realty up by 0.33%, Oil & gas up by 0.19% and PSU up by 0.13% while Auto down by 0.44%, Metal down by 0.28%, TECk down by 0.26%, CG down by 0.20% and Power down by 0.17% there were losers on the index.

Cipla up by 2.55%, Wipro up by 1.84%, ONGC up by 1.03% HDFC up by 1.02% and ITC up by 0.68% were the gainers on the Sensex, while Bharti Airtel down by 2.83%, Hero MotoCorp down by 1.32%, Tata Steel down by 0.95%, Dr Reddys Lab down by 0.90% and Tata Motors down by 0.90% were the major losers in the index.

Meanwhile, Coal Ministry has urged Independent power producers (IPP) with coal block allocations to take part in bids for power procurement called for by discoms - the distribution utilities that take care of power procurement and distribution. Albeit, almost all power producers have long-term power purchase agreements with discoms.

The ministry had noticed that the power producers, who were been allocated coal blocks are not participating in the bids and are quoting higher tariff almost similar to projects that had coal linkages. It also, urged them to pass on benefits of low cost of coal from the blocks to the consumers in the form of lower electricity tariff.

This move by the ministry comes at a time when the Comptroller and Auditor General (CAG) is likely to come out with its final report. The CAG has also criticized on the allocation of coal blocks to IPPs and captive power producers and has confirmed that it is in the way of estimating the inappropriate benefits granted to them.

The S&P CNX Nifty is currently trading at 5,193.70, down by 6.10 points or 0.12% after trading in arange of 5,218.35 and 5,187.85. There were 19 stocks advancing against 31 declines on the index.

The top gainers on the Nifty were Wipro up by 2.19%, Cipla up by 2.04%, ACC up by 1.13%, DLF by 1.04% and ONGC up by 0.99%. While, Bharti Airtel down by 3.02%, Bank Baroda down by 2.22%, BPCL down by 2.03%, Reliance Infra down by 1.73% and  Hero Moto Co down by 1.45% were the major losers on the index.

Most of the Asian indices were trading in green; Hang Seng index was up by 1.06%, Nikkei 225 up 0.87%, Taiwan Weighted up 1.11%,  Kospi Composite Index up 2.26%  and  Jakarta Composite  up by 0.63%  while  Straits Times was down 0.23%,  KLSE Composite down 0.05%, and Shanghai Composite down 0.07% were the losers.