Markets trim gains on lower Q3 GDP growth

Markets have trimmed the early gains and have turned volatile post the announcement of Q3 GDP data. The Gross Domestic Product (GDP) for the third quarter of the current financial year saw a slower growth rate at 6.1% as compared to 6.9% in the previous quarter. The data is termed to be the lowest in the last 11 quarters.

The first quarter of 2011-12 saw the economy growing by 7.7%, while the figure was 6.9% in the second quarter, thus delivering a 7.3% economic expansion in the first half. Advance estimates pegged the economic growth at 6.9%  for the entire FY12.

At 11:20, the Sensex was up 113 points at 17,844 and the Nifty gained 32 points to 5,408. The BSE Sensex had touched intraday high of 18,001 and the Nifty made a high of 5,459 in early trades.

On the global front, barring Shanghai, all the Asian markets are trading firm. Nikkei, Strait Times, Hang Seng, Taiwan and Kospi have gained between 1-2%. Asian stocks firmed and the euro held its ground on Wednesday ahead of a fresh cash injection by the European Central Bank. 

Back home, BSE Oil & Gas index has surged by over 2% led by RIL and ONGC. Index heavyweight Reliance Industries has edged higher, gaining by almost 3%. ONGC is the top Sensex gainer, up 4% after the government decided to offload 5% stake through auction route on March 1 at a likely floor price of Rs 290 a share.

Metals stocks like Sterlite, Hindalco, Tata Steel, Coal India and Jindal Steel have gained between 1-2%.

Capital Goods stocks have lost ground after the manufacturing growth has come in at 0.4% vs 2.7% y-o-y. BHEL has trimmed some gains and is up by nearly 2% whereas L&T has slipped into red zone.

Banking shares like HDFC Bank and ICICI Bank have plunged into red on profit taking after recent gains on hopes of rate cut by the central bank as concerns over rising inflation eased. However, SBI is up by almost 1%.

The broader markets are outperforming the benchmark indices with BSE Midcap and Smallcap indices gaining over 1% each.

Shares of select public sector undertakings (PSUs) are in demand on the bourses on back of huge volumes.

Hindustan Copper, Neyveli Lignite Corporation, Engineers India and HMT have rallied more than 8% each, while MMTC and STC India has frozen upper circuit of 5% on the Bombay Stock Exchange. The government holds more than 80% stake each in these companies.

Shares of tea manufacturing companies have extended gains on reports that wholesale tea prices are expected to rise by about 10-15% soon on the back of a faltering supply.

Among the individual stocks, Tata Global Beverages, Bombay Burmah Trading Corporation, Jay Shree Tea and Industries, Goodricke Group, Mcleod Russel India and Warren Tea have rallied 3-8% on the Bombay Stock exchange.

BGR Energy Systems is trading higher by 7%, extending its yesterday’s 15% rally, on hopes of getting orders from the state-owned electric utilities company NTPC Limited.

The market breadth in BSE remains strong with 1,566 shares advancing and 826 shares declining.