BELOW NEUTRAL LINE

Indian equities continued lackadaisical trade below neutral line in the late morning session. On the global front, Asian markets were trading in red with some of the indices showing cut of quarter to half a percent. Though, US Fed did not came up with any major changes but assured that it will pump fresh stimulus if necessary, traders are now hopeful that the European Central Bank will do more to contain the debt crisis. Back home, traders were seen piling up position in CG, CD and Power sector, while selling was witnessed in Auto, Banking and Oil &Gas sector. Meanwhile, telecom stocks like Idea Cellular, Bharti Airtel and Reliance Communication were trading in green, on report that telecom ministry has proposed the existing slab rate system of revenue sharing for spectrum usage charge to the cabinet, which if accepted, will help new entrants in the form of lower levy. The NSE Nifty and BSE Sensex were managing to hold their psychological 5200 and 17200 levels respectively. The market breadth on BSE was positive in the ratio of 1092:751 while 85 scrips remained unchanged.

The BSE Sensex is currently trading at 17201.28 down by 56.10 points or 0.33% after touching a high of 17246.01 and a low of 17197.66. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index was up 0.20%, while Small cap index was up 0.27%.

On the BSE sectoral space, CG up by 0.41%, CD up by 0.35%, Power up by 0.32%, Realty up by 0.32% and FMCG up by 0.26% while Auto down by 0.72%, Bankex down by 0.51%, Oil &Gas down by 0.47%, PSU down by 0.38% and Metal down by 0.37% there were losers on the index.

NTPC up by 1.59%, Jindal Steel up by 1.28%, Bharti Airtel up by 0.86% BHEL up by 0.43% and L&T up by 0.43% were the gainers on the Sensex, while Tata Motors down by 1.52%, Sterlite Industries down by 1.46%, Coal India down by 1.43%, HDFC Bank down by 1.11% and SBI down by 1.02% were the major losers in the index.

 Meanwhile, reflecting both weak global demand, as well as likely supply side issues the Indian exports have extended their declining trend for the second straight month in June. Impact of slowdown in US, European nations, China and Japan was clearly visible on the Indian exports, which fell by 5.5% to $25 billion in June, compared with $26.5 billion in the corresponding month last year, while imports declined by 13.5% to $35.4 billion, compared with $40.9 billion in June 2011.

As the imports declined sharply, the trade deficit for June fell to $10.31 billion from $14.4 billion in June 2011. For the quarter ended June too, the trade deficit narrowed to $40.05 billion from $46.23 billion in the corresponding period last year. Cumulative value of exports for the period April-June 2012-13 was $75.20 billion compared to $76.51 billion, down by 1.70% in Dollar terms, however in Rupee terms it registered  a growth of 18.97% to Rs 407055.99 crore from Rs 342163.55 crore in the same period last year.

In June, non-oil imports fell 17.80% to $22.68 billion, compared with $27.59 billion in the year-ago month, indicating a slowdown in the domestic economy and a fall in demand by the Indian industry. Oil imports during April-June, 2012-13 were valued at $41585.0 million higher by 5.48% from $39425.0 million in the corresponding period last year.

Non-oil imports during the April-June period fell 11.6% to $73.7 billion, compared with $83 billion in the corresponding period of the previous year. Non-oil imports during April-June, 2012-13 too were down by 11.57% to $73.67 billion compared to $83.32 billion in April-June, 2011-12.

Weak exports and wide trade and current account deficits have added to India's economic growth outlook, which slipped to a nine-year low of 6.5% in 2011-12. With markets in euro-zone, US, China and Japan still not showing healthy growth, the situation may worsen further for the Indian export.  

The S&P CNX Nifty is currently trading at 5,220.90, down by 19.60 points or 0.37% after trading in a range of 5,236.90 and 5,220.70. There were 13 stocks advancing against 35 declines while 2 stocks remained unchanged on the index.

The top gainers on the Nifty were NTPC up by 1.59%, Jindal Steel up by 1.13%, Ranbaxy up by 1.00%, Bharti Airtel by 0.97% and DLF up by 0.55%. While, Sterlite Industries down by 1.74%, Tata Motors down by 1.69%, Tata Power down by 1.65%, HDFC Bank down by 1.30% and  Coal India down by 1.20% were the major losers on the index.

Asian indices were trading in red; Taiwan Weighted down  0.03%,  Kospi Composite Index down  0.51% ,  Jakarta Composite  down by 0.42%, Hang Seng index  down by 0.79%, Straits Times down  0.34%,  KLSE Composite down 0.06%, and  Shanghai Composite down 0.77%  while Nikkei 225 up 0.41%, was only the gainer.