The markets are trading flat this afternoon as the gains triggered by an upbeat economic survey were soon negated by an insipid railway budget presented by Mamata Banerjee. The Sensex is quoting at 17684, higher by 50 points and the Nifty is at 5297, up 34 points. There is divergence on the broader market front, though; the mmidcap index is at 6330, lower by 37 points and the smallcap index is at 7765, down 48 points. It may be recollected that geopolitical concerns, among other things, had spooked the Sensex by more than 500 points in Thursday's session.
Earlier in the day, the Economic Survey for financial year ending March 2011 forecast a strong economic growth of 8.75%-9.25% for the year ending March 2012. The GDP is expected to grow at a rapid pace in the next two years and agriculture is set to rise at 5.4% in FY11. The fiscal deficit for 2010-11, the Survey says, will be 4.8% of the gross domestic product or GDP, much lower than Mukherjee' Budget estimate of 5.5%. The Economic Survey also spoke about introducing the Direct Tax Code (DTC) in April 2012.
However, the railway budget was populist at best. Mamata Banerjee ignored the mounting deficit of the railay behemoth and instead, chose to pander to electoral considerations with an eye on the upcoming assembly elections in West Bengal. The populist measures announced by the minister included the introduction of 56 new trains in FY-12 and a target of adding 700 km of rail line annually compared to the current 150 km.
Meanwhile, oil eased below $111 as leading world exporter Saudi Arabia sought to assure key importers that it would fill any supply shortfall left by beleaguered fellow OPEC member Libya, soothing fears over a disruption in supplies that had carried prices to a 2-1/2-year high a day earlier. And Asian stocks nudged higher as a result. Hang Seng and Straits Times spurted by nearly 2% each, while the Nikkei, Seoul and Taian indices added in the region of a percent each. And the European markets also had a positive opening, with the FTSE, CAC and DAX gaining in the region of about half a percent each.
The leading gainers on the Sensex are ICICI Bank (strengthened by 2.8% at Rs 980), ITC (strengthened by 2.38% at Rs 155) ansd Tata Motors (added 2.4% at Rs 1084).
On the other hand, the ADAG stocks are having another weak session of trade. RCom has cracked by 5.4% at Rs 87 and Reliance Infra has shed 4.7% at Rs 636. And index heavyweight has inched lower by 0.5% at Rs 960.
The market breadth is weak. Out of 2879 stocks traded on the BSE, there are 1022 advancing stocks as against 1732 declines.
