Live: BSE Sensex Remains Flat; PMEAC Lowers Growth Estimate

13.30 pm IST: Indian market was nearly flat on Friday with both indices making transitions from positive to negative territory. The BSE Sensex was down by 20 points while NSE Nifty was up by 4 points at 1.30 pm IST. PMEAC has lowered the GDP growth forecast for India to 5.3% for 2013-14.

Due to higher inflation the domestic demand has decreased in India. This is a major concern as the country was expecting to rely more on domestic consumption to isolate itself from the economic cycles in overseas markets.

PSU banks were major gainers in today’s trade. BHEL, PNB, Axis Bank and DLF were trading higher. Axis Bank recovered smartly from the day’s low. Among major losers were Bharti Airtel, HCL Technologies, ITC and Infosys Technologies. Power, Real Estate and PSU stocks were trading higher. IT stocks were under pressure. FMCG and Consumer durables were trading flat.

BNP Paribas has reduced the target for BSE Sensex to 17,000 from earlier estimate of 21,300 by the end of the year. The downgrade comes amid growing concerns about the slowdown in economic growth in India. The July IIP numbers were positive, but the macro economy is India is suffering and business confidence in low.

11.15 am IST: Indian market was trading lower with BSE Sensex down by 40 points and majority of stocks trading range-bound. Asian markets are heading towards marginally lower closing.

Among major gainers were BHEL, Hero MotoCorp, Larsen, M&M and Tata Power. Among pharmaceutical counters, Sun Pharma, Cipla and Ranbaxy Labs were trading positive. Private sector banks were under pressure with Axis Bank, ICICI Bank and HDFC Bank trading lower than yesterday’s close.

Meanwhile, Robert Doll of Nuveen Asset Management has said that the worst seems over for the emerging markets. During an interview with CNBC-TV18, he said that he believes the recent sell off in emerging markets has already discount the fiscal stimulus tapering by Federal Reserve. He said that this would be the right time to build fresh positions in emerging markets like India, in fundamentally strong stocks.

Currency Update
Indian rupee lost ground compared to USD in early trades. USD-INR touched intraday high of 64.12 and was currently trading at 63.86. Euro-INR was trading at 84.74. British Pound was trading at 100.79.

Bullion Update
Gold was down by nearly a percent at 29775. Gold prices have come down in international markets on fears that the consumption in India will decline over the next few quarters. Gold prices internationally have gone down but due to import duty and decline in value of Indian currency, the price of gold is still near its all-time high. This is also keeping investors away from buying gold in India. India and China are biggest consumers of gold in world markets. If the demand from these two key markets decreases, the price of gold is expected to remain under pressure. Silver prices were down by over one percent at 49,925 per kg.

9.20 am IST: Indian stock market opened negative on Friday even as the market experts were expecting the markets to have gap-up opening after the positive July IIP numbers. Indian rupee also lost 0.9% compared to USD in early trade on Friday.

However, within first 15 minutes of trade, BSE Sensex recovered and came in positive after touching low of 19744. Among major gainers in early trade were Hero MotoCorp (up by 2%), Tata Power (up by 1.6%), BHEL, L&T, Cipla, TCS and Dr Reddy’s Labs.

Among major losers were ICICI Bank, HDFC Bank, HDFC, ONGC, JSPL, Bharti Airtel and Reliance Industries.

Over the past 30-days, Sesa Goa has given returns of 35%, Tata Steel has increased by 25.8%, Hindalco has given returns of 21%  and Ranbaxy Labs has increased valuation by 16.4 percent. Among major losers on monthly basis are Bharti Airtel, PNB, Axis Bank, IDFC and ACC.

8.55 am IST: Indian market is expected to rise on opening bell as the IIP data came as surprise for market experts who were expecting the July Industrial production to be lower by 0.2%. Benchmark BSE Sensex declined by 215 points yesterday and NSE Nifty closed 62 points lower.

The industrial output was higher by 2.6 percent in July, mainly helped by manufacturing growth. The manufacturing data was higher by 3.0 percent compared to July last year.

Asian markets were trading marginally lower with Nikkei 225 down by 0.31% and Hang Seng flat. European markets closed flat yesterday. US markets closed marginally lower on Thursday.

Indian government has put projects worth Rs 4 lakh crore on fast track. The government is under pressure to clear the projects, to push up economic growth in the country. The currency has faced the worst ever declines in past two decades during August 2013. The loss of confidence among business owners could lead to further decline in the economic growth of India.

Isha Sondhi and Kunal Mishra report live markets from Mumbai, India during market trading hours.