Sensex, Nifty unmoved by GDP forecast; HUL, ITC gain

The BSE Sensex barely moved despite the Prime Minister's economic advisory council forecasting a GDP growth of 6.7 per cent in 2012-13, marginally better than the 6.5 per cent pace at which India grew in 2011-12.

Markets were unmoved by the forecast because several economists have recently slashed their economic outlook for the country. Citigroup and CLSA have cut their outlooks for growth to 5.4 per cent and 5.5 per cent respectively in the fiscal year ending March.

C Rangarajan, chairman of PMEAC admitted the slowdown in the economy.

"The matter of great concern is the decline in investment rate," he said.

At 11.40 a.m., the Sensex traded 121 points or 0.7 per cent higher at 17,778 while the broader Nifty index was up 29 points at 5,392. If the Nifty takes out the 5,400 mark, it will be the first time since March 16, giving bulls much needed confidence.


Metal and capital goods stocks saw selling pressure. Gains were led by auto, FMCG and IT stocks, all of which traded with over 1 per cent gains on the BSE.
Tata Motors was the top Nifty gainer, up 2.7 per cent, on the back of strong growth in Jaguar Land Rover sales.

FMCG major HUL gained 2 per cent, while tobacco major ITC saw value buying, rising 1.8 per cent. The stock was the top Nifty loser yesterday after Australia banned the use of logo on tobacco packs.

IT major Infosys traded 1.4 per cent higher while India's top car maker Maruti Suzuki shares gained nearly 1 per cent after the company said it would open its Manesar plant on August 21.

Among the 22 losers on the Nifty index, engineering and construction major L&T was down 1.3 per cent, while Ambuja Cement fell 1.2 per cent. Oil refiner BPCL traded 1 per cent lower.

Despite steady gains, some analysts continue to remain skeptical in their outlook.

"Markets are indecisive. The political equation is unlikely to allow policy action to go through. Liquidity is driving the markets. Markets may inch up to 5,500, but investors should book partial profits because there is no visibility," Ambareesh Baliga, chief operating officer of Way2Wealth said.


(With inputs from Thomson Reuters)