Indian bourses continued to trade in red in late morning session as funds and retail investors engaged in reducing positions amid a weak trend in global markets. Profit booking in frontline blue chip stocks after a recent rally dragged the markets lower. However, some support came in from reports that foreign institutional investors (FIIs) bought shares worth a net Rs 575.09 crore on June 3, 2014. FMCG stocks extended their profit taking for the second day in a row on concerns that rising inflation levels would hurt volume growth, while Metal stocks extended their gains for a second straight day as China’s factory sector turned in its best performance in four months in May as export orders improved. In scrip specific development, shares of Wockhardt tumbled after the U.S. Food and Drug Administration found deficiencies in quality, hygiene and personnel training standards at the company’s plant in Chicago. On the other hand, shares of Biocon rallied after it announced a five-year extension of its drug discovery and development collaboration in India between its contract research subsidiary Syngene International and Bristol-Myers Squibb.

The market is likely to remain range bound in the near term as there is not much trigger on the domestic front and traders will keep an eye on Finance Minister’s pre-Budget talks with apex industry chambers and trade sector representatives on Friday. On the global front, most of Asian markets were trading in red as investors await a report on US jobs and a decision from the European Central Bank on monetary policy. Further, the US markets closed slightly lower on Tuesday, pausing after three straight days of gains that sent the S&P 500 and Dow Jones Industrial Average to record levels on Monday. Back home, traders were seen piling up positions in Consumer Durables, Realty and Metal stocks, while selling was witnessed in IT, Teck and FMCG sector stocks. The market breadth on BSE was positive, out of 2295 stocks traded, 1591 stocks advanced, while 610 stocks declined on the BSE.

The BSE Sensex is currently trading at 24836.63 down by 21.96 points or 0.09% after trading in a range of 24925.90 and 24805.17. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.24%, while Small cap index up by 1.20%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.68%, Realty up by 1.06%, Metal up by 1.04%, Capital Goods up by 0.79% and India Infrastructure Index up by 0.79%. While, IT down by 1.44%, Teck down by 1.02%, FMCG down by 0.44% and Oil & Gas down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 2.80%, Tata Steel up by 2.61%, Bajaj Auto up by 2.08%, BHEL up by 1.94% and Tata Motors up by 1.44%. On the flip side, TCS down by 1.90%, Mahindra & Mahindra down by 1.82%, Wipro down by 1.31%, Infosys down by 1.21% and ONGC down by 1.10%.

Meanwhile, Finance Minister Arun Jaitley has described the RBI’s status quo policy as a calibrated approach to maintain a balance between growth and inflation and asserted that the government on its part will address the problem of price rise through improving supplies. The Reserve Bank of India (RBI), in its Second Bi-Monthly Monetary Policy Statement for this financial year, kept the key policy rates unchanged at 8 percent. However, to improve availability of funds, central bank cut the statutory liquidity (SLR) ratio, the amount of deposits that banks need to park in government securities, by 0.5 percent to 22.5 percent.

Finance Minister further added that there should be a balancing act between inflation and growth and the government will soon take measures to contain the rising inflation through improving supplies, particularly in relation to food inflation. Retail inflation inched up to 8.59% in April on y-o-y basis as against 8.31% in March led by a sharp rise in the prices of food articles. Inflation in the food category stood at 9.66 percent in April. The RBI has raised lending rate three times since September’13 in order to tame price rise through cooling demand. Though tight monetary stance helps to crush marginal prices pressure, the apex bank’s move is adversely impacting the country’s economic growth.

Regarding the economic growth, Further Minister stated that fiscal consolidation, restarting the investment cycle and employment generations are the top priority for the government.  India’s economic growth stayed below 5 percent for the second year in a row at 4.7 percent during FY14.

The CNX Nifty is currently trading at 7,413.10 down by 2.75 points or 0.04% after trading in a range of 7,433.30 and 7,399.10. There were 32 stocks advancing against 18 declining on the index.

The top gainers of the Nifty were Hindalco up by 2.84%, NMDC up by 2.71%, PNB up by 2.65%, Tata Steel up by 2.42% and Bank of Baroda up by 2.31%. On the flip side, HCL Tech down by 2.18%, TCS down by 1.95%, M&M down by 1.54%, Infosys down by 1.33% and Wipro down by 1.18% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dropped by 1.03%, Hang Seng declined 0.61%, Jakarta Composite slipped by 0.33%, KLSE Composite tumbled 0.41%, Straits Times was down by 0.54%. On the flip side, Nikkei 225 soared 0.09% and Taiwan Weighted was up by 0.01%.