NEGATIVE START

The Indian equity markets have made a negative start as investors remained concern on the back of rising crude oil prices, which increased inflation and interest rates worries. Weak cues from the Asian markets too hurt the traders' sentiments and most of the Asian counterparts were trading in the negative terrain at this point of time. Moreover, the US markets too closed lower on Friday. Back home, sustained selling in key heavyweights like Reliance Industries, Infosys, ONGC, SBI etc were keeping the momentum on the negative side. Fast moving consumer goods witnessed the maximum gain in trade followed by capital goods and metal while, auto, realty and banking stocks remained the top losers on the BSE sectoral space. The mid- and small-cap indices, which witnessed some traction over the last week, were also trading in the negative territory. The mid-cap index was trading 0.38 per cent lower while, small-cap index was trading flat with a negative bias. The market breadth on the BSE was evenly divided; there were 940 shares on the gaining side against 980 shares on the losing side while 64 shares remained unchanged.

The BSE Sensex opened at 19,382.91; about 69 points lower compared to its previous closing of 19,451.45, and has touched a high of 19,311.43 while low remain its opening.

The index is currently trading at 19,369.72, down by 81.73 points or 0.42%. There were 12 stocks advancing against 18 declines on the index.

The overall market breadth has equally divided with 47.26% stocks advancing against 49.52% declines. The broader indices too lost their grip in early trade; the BSE Mid cap index down 0.38% while, Small cap index up by 0.02%. 

The top gaining sectoral indices on the BSE were, FMCG up by 0.48%, CG up by 0.32%, Metal up by 0.16%, Power up by 0.11% and HC was up by 0.06%. While Auto down by 1.17%, Realty down by 0.94%, Bankex down by 0.73%, CD down by 0.71% and Oil and Gas down by 0.69% were the top losers on the index.

The top gainers on the Sensex were Tata Power up by 1.32%, BHEL up by 1.15%, Sterlite Industries up by 1.15%, Bharti Airtel up by 0.79% and Reliance Infra was up by 0.65%.

On the flip side, DLF down by 1.83%, RCom down by 1.83%, HDFC Bank down by 1.69%, JP Associates down by 1.64% and M&M down by 1.61% were the top losers on the index.

Meanwhile, the research desk of Dun & Bradstreet has released a report on Economy Outlook 2011-12 for India which provides forecast of key macroeconomic variables that can impact the course of the business environment over the next fiscal. The report states that the Indian economy will maintain the 8% plus growth trajectory in FY12 with its real GDP likely to grow at 8.8% during the fiscal.

The report also includes sectoral outlook for 2011-12, which is a survey-based analysis covering expectations of companies panning across manufacturing and services sectors. It expects the services sector to have grown by around 10.5% during the fourth quarter (Q4) of FY11, taking the services sector growth for FY11 to 9.6%, it added. "The services sector is expected to maintain this growth momentum and clock a robust growth of 9.9% during FY12,' the report said.

Improvement in private domestic demand conditions, moderating inflation towards the end of the fiscal year and likelihood of recovery gathering pace in the global economy during the second half of the fiscal year is expected to provide the required momentum to overall growth. Moreover, robust industrial activity is also expected to drive economic growth and the IIP is likely to grow by 9.0% during FY12. However, the investment activity is expected to improve only marginally to 37.5% during FY12, weighed down by the high inflation and elevated interest rates.

The report also indicated that high interest rate scenario and rising input prices, coupled with muted investment activity and uncertainties surrounding the international economic situation are likely to limit the GDP growth in the first half of FY12, pulling down the average growth to 8.8% despite a 9% growth expected in the second half of the current fiscal.

The D&B report, however, is in sharp contrast to the projections made by multilateral lending agency Asian Development Bank (ADB) and ratings agency Standard & Poors (S&P). ADB lowered its growth forecast for the Indian economy to 8.2%, whereas S&P too came out with its projection of 8.3% GDP growth in 2011-2012.

The S&P CNX Nifty opened at 5,805.35; about 37 points lower compared to its previous closing of 5,842.00, and has touched a high and a low of 5,818.95 and 5,804.40 respectively.

The index is currently trading at 5,817.00, lower by 25 points or 0.43%. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 1.48%, Sterlite Industries up by 1.21%, BHEL up by 1.07%, Tata Power up by 1.04% and Bharti Airtel up by 0.86%.

Siemens down by 2.57%, IDFC down by 2.07%, RCom down by 1.92%, DLF down by 1.89% and BPCL was down by 1.84%, were the major losers on the index.

Asian equity indices were trading mostly in the red; Shanghai Composite was up 23.22 points or 0.77% to 3,053.24, Hang Seng was up 1.37 points or 0.01% to 24,397.44, Jakarta Composite was up 13.88 points or 0.37% to 3,755.69.

On the flip side, KLSE Composite was down 9.21 points or 0.59% to 1,548.28, Nikkei 225 was down 64.75 points or 0.66% to 9,703.33, Straits Times was down 14.77 points or 0.46% to 3,172.54, Seoul Composite was down 7.52 points or 0.35% to 2,120.45 and Taiwan Weighted was down by 55.32 points or 0.62% to 8,839.22.