Nifty hovers around 6,300; Infosys dn 1%

RBI has flagged concerns over continuing high inflation amid growth slowdown

Markets continued to trade flat in noon deals on Monday, amid lacklustre participation from institutional investors, after the Reserve Bank of India in its Financial Stability Report flagged concerns over continuing high inflation amid growth slowdown.

At 1PM, the 30-share Sensex was down 17 points at 21,177 and the 50-share Nifty was down 13 points at 6,301.

Fall in domestic savings and high fiscal deficit are other major concerns for India. Inadequate social security coverage in India against a backdrop of changing demographics will pose challenges for expanding the pension system given the fiscal constraints, said the report. RBI also raised concerns on asset quality of banks. Five sectors, namely, Infrastructure, Iron & Steel, Textiles, Aviation and Mining together contribute 24 percent of total advances of Scheduled Commercial Banks (SCBs), and account for around 53 per cent of their total stressed advances.

Investors are now eagerly awaiting the April-November fiscal deficit data, due on Tuesday, and the manufacturing PMI (Purchasing Managers' Index) for December, due on Thursday, which will help them gain insights into the extent of the economic slowdown.

The Indian rupee remained weak due to dollar demand by oil importers. The rupee was trading at Rs 62.05 compared to previous close of Rs 61.85 per dollar. Currency dealers see the rupee trading in the range of Rs 61.80 to Rs 62.20 during the day.

In Asia, Japan's benchmark stock index, the Nikkei, surged to a fresh six-year high on Monday. The benchmark index is likely to register a rise of over 55% to record its biggest annual gain since 1972. The Nikkei ended the last trading day of 2013 up 0.7% at 16,291.31. Among other markets in the region, Straits Times was up 0.2% while Shanghai Composite and Hang Seng were trading marginally lower.

Index heavyweight Infosys was down 1.4% amid profit taking after the stock hit new all-time highs last week.

Bank shares were trading weak on concerns that credit offtake may take a hit amid growth slowdown. ICICI Bank and Axis Bank were down nearly 1% each.

Other Sensex losers include, L&T, Sun Pharma and ONGC among others.

Tata Motors was the top Sensex gainer up 1.7% along with Hindustan Unilever, HDFC, Bharti Airtel and index heavyweight Reliance Industries.

Among other shares, Gati Limited is locked in upper circuit of 20% at Rs 43.95, extending its previous day’s rally, on back of heavy volumes on the bourses. In past two trading sessions, the stock has surged 30% from Rs 33.80 after the lender IL&FS Financial Services sold 1.5 million shares of the company for Rs 5.33 crore through open market. The name of the buyers is not immediately known.

In the broader market, the BSE Mid-cap was up 0.1% and the Small-cap index was up 0.5%.

Market breadth was positive with 1,147 gainers and 1,006 losers on the BSE.