FLAT NOTE

Domestic benchmarks have started off the trade on a flat note on Wednesday as they seemed to have entered into consolidation mode after three continuous sessions' of rally. Globally, the US markets declined further overnight, awaiting the outcome of the Federal Reserve's two-day meeting when it is widely expected to unveil new stimulus. While, Asian markets were mixed ahead of outcome of Federal Reserve's meeting and European Central Bank's meet that will begin on August 2. Back home, local bourses were trading near their previous close level as participants booked some of their profits after recent gains amid a weak trend overseas. On the political front, P Chidambaram has been appointed as the new Finance Minister. He took over the portfolio from Prime Minister Manmohan Singh who had been holding temporary charge after Pranab Mukherjee. On sectoral front, healthcare witnessed the maximum gain in trade followed by realty and power while, software and technology remained the few losers on the BSE sectoral space. The broader indices were outperforming benchmarks with gaining over half a percent. The market breadth on the BSE was positive; there were 967 shares on the gaining side against 488 shares on the losing side while 57 shares remained unchanged. 

The BSE Sensex opened at 17,244.44; about 8 points higher compared to its previous closing of 17,236.18, and has touched a high and a low of 17,281.76 and 17,200.27 respectively.

The index is currently trading at 17,270.06, up by 33.88 points or 0.20%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 63.96% stocks advancing against 32.28% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.61% and 0.56% respectively.

The top gaining sectoral indices on the BSE were, HC up by 1.35%, Realty up by 0.85%, Power up by 0.65%, CG up by 0.59% and CD up by 0.37% while, IT down by 0.37% and TECk down by 0.24% remained the few losers on the index.

The top gainers on the Sensex were Cipla up by 5.80%, Tata Power up by 1.33%, BHEL up by 1.30%, SBI up by 1.17% and Bajaj Auto up by 1.16%.

On the flip side, Coal India was down by 1.60%, HDFC Bank was down by 0.93%, Infosys was down by 0.74%, ONGC was down by 0.72% and TCS was down by 0.37% were the top losers on the Sensex.

Meanwhile, expressing concern over the volatile food prices across globe and the likely impact on the poor, which is mainly on the back of drought like situation in countries like the United States and India, World Bank President, Jim Yong Kim said, the situation would further worsen since other countries are also currently suffering from weather-related production issues.

The uneven spread of monsoon has affected the wheat crop with heavy rains in many European countries, whereas less rainfall in Russia, Ukraine and Kazakhstan have hit the crop production badly.  India, on the other hand, with 22% deficient rainfall, will also have negative implications on the prices, if rains do not pick up going forward.

World Bank data revealed that prices of all non-rice grains - wheat, corn and soybeans have risen in 2012, with wheat up by almost 50% since mid-June. Corn has risen by over 45%, soybeans up almost 30% since mid-June and on yearly basis almost by 60%. This kind of price volatility creates irregularity in the market and poses fundamental food security risks for consumers and governments, and thereby discourages required investment in agriculture for development, which on the other side increases financial risks and uncertainty for producers and traders.

Yong Kim by adding further said World Bank is keeping a close eye on the situation so that it can help governments set policies in place to help people better cope. However, the crop projections, so far do not indicate the potential for actual shortages in the major grains; stocks are low, and the entire situation depends on the global weather, which makes prices more vulnerable to higher volatility.

Though the prices of many food items have risen sharply, the World Bank however, noted that the present situation differ from the 2008 crisis. The government on its part has to take necessary steps to ensure that rural livelihoods are protected, with agricultural sector being on the spotlight.

The S&P CNX Nifty opened at 5,220.70; about 9 points lower compared to its previous closing of 5,229.00, and has touched a high and a low of 5,240.45 and 5,214.05 respectively.

The index is currently trading at 5,233.65, higher by 4.65 points or 0.09%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Cipla up by 5.92, RInfra up by 1.89%, Ambuja Cement up by 1.77%, BHEL up by 1.46% and Tata Power up by 1.22%.

On the flip side, Coal India down by 1.68%, HDFC Bank down by 0.94%, ACC down by 0.89%, Infosys down by 0.85% and BPCL down by 0.70%, were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite was up by 21.77 points or 1.03% to 2,125.40, Hang Seng added 7.39 points or 0.04% to 19,804.20, KLSE Composite gained 1.78 points or 0.11% at 1,633.28 and Straits Times was flat, up by 0.58 points or 0.02% to 3,038.38.

On the other hand, Jakarta Composite lost 31.22 points or 0.75% to 4,112.98, Nikkei 225 lost 93.43 points or 1.07% to 8,601.63, Kospi Composite was down by 6.04 points or 0.32% to 1,875.87 and Taiwan Weighted was lower by 2.69 points or 0.04% to 7,268.11.