Indian markets make gap-up start on firm global cues

Buoyed by firm global cues, Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals. Supportive cues from US markets provided much needed support to local markets on the back of upbeat earnings announcements. Most of the Asian equity benchmarks were trading in the positive terrain at this point of time ahead of the Bank of Japan and Federal Reserve report on monetary policy.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Some support came in with an Assocham CEO survey of which around 50 per cent of Indian CEOs said they are optimistic about the Indian economy, and expect it to be stronger in the next six months. Appreciation in Indian rupee too supported the sentiments with rupee rising to its highest in more than a week on in early deals on heavy dollar selling by exporters and corporates. The rupee rose to 60.30/31, a level last seen on April 21.

Meanwhile, all the sectoral indices on the BSE were trading in the green with oil and gas, auto and power segments gaining the most. Fast-moving consumer goods, banking, realty, capital goods and healthcare too were trading with significant gains. The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 1,050 shares on the gaining side against 462 shares on the losing side while 50 shares remain unchanged.

The market breadth on BSE remains positive with advances to declines in the ratio of 1014:419. BSE Sensex and NSE Nifty were trading near their psychological 22,600 and 6,750 levels respectively.

The BSE Sensex is currently trading at 22635.80, up by 169.61 points or 0.75% after trading in a range of 22657.27 and 22499.10.There were 26 stocks advancing against 4 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.64% and Small cap index up by 0.71%.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.61%, Auto up by 0.93%, PSU up by 0.86%, Power up by 0.77% and FMCG up by 0.72%, while there was no loser on the sectoral index.

The top gainers on the Sensex were Gail India up by 2.80%, Tata Motors up by 2.16%, Dr Reddys Lab up by 0.43%, RIL up by 1.74% and ONGC up by 1.42%. On the flip side, Sun Pharma was down by 1.09%,  Bajaj Auto was down by 0.61%, Coal India  was down by 0.56% and Infosys was down by 0.02% were the top losers on the Sensex.

Amid concerns over high selling prices of coal-bed methane (CBM), the government has informed that gas extracted from coal seams will be priced at equivalent to conventional gas, as the new Rangarajan formula will also apply to CBM. Presently, the actual CBM gas price that is being realised by industry players such as GEECL and EOL is much higher than the Government approved price.

Oil Ministry has notified that gas price advised through the new pricing guidelines 2014 based on the Rangarajan formula to treat as a floor price in case of CBM contracts. Therefore, the prices of CBM, shale gas and conventional gas will be equal and contractors cannot charge a higher price than this from their customers. The Ministry added that coal-bed methane contractors like GEECL and EOL will have to sell CBM gas at a uniform rate of $8.3 per mmBtu derived from the new Pricing Guidelines 2014.

The government had approved the formula under which all domestically produced gas will be priced at an average of the price prevailing at international gas trading hubs and the actual cost of importing liquid gas (LNG). Under the new approved pricing formula, the gas prices will get doubled at $8.30 per million British thermal unit from the current price at $ 4.20 per mbtu. New price will be uniformly applicable to all public and private sector producers such as Reliance Industries and ONGC. The increase in gas prices will directly benefit these local producers. Further, the move to raise gas prices is expected to benefit the government by around $2.2 billion incremental revenue by way of higher taxes. However, the implementation of new approved pricing formula has been deferred till completion of general elections.

The CNX Nifty is currently trading at 6,764.70 up by 49.45 points or 0.74% after trading in a range of 6,773.85 and 6,723.65. There were 44 stocks advancing against 6 declines on the index.

The top gainers of the Nifty were GAIL up by 3.01%, Asian Paint up by 2.47%, Tata Motors up by 2.03%, Dr Reddy up by 1.98% and Reliance up by 1.69%. On the flip side, Sun Pharma down by 1.25%, Bajaj-Auto down by 0.53%, Coal India down by 0.52%, DLF down by 0.33% and HUL down by 0.04% were the top losers on the index.

Most of Asian equity indices were trading in green; Shanghai Composite increased by 0.03%, KLSE Composite increased 0.41%, Jakarta Composite was up by 0.34%, Nikkei 225 was up by 0.40%, Straits Times was up by 0.70%.On the flip side, Hang Seng was down by 0.79%, Taiwan Weighted was down by 0.74%, and KOSPI slipped by 0.11%.