Markets continue to trade in positive territory

Indian bourses continue to trade in green in afternoon session despite some volatility. Profit booking at higher levels modestly corrected the benchmarks; however the major indices managed to remain in green supported by gains in frontline blue chip stocks such as ONGC, HUL and Tata Steel among other.  Further, there was some cautiousness as investors preferred to remain on sidelines ahead of Q4 GDP data, scheduled to be released later in the day and RBI policy review next week. All the major indices were trading in green with realty being the top gainer, up by 2.93%. Investors were also piling up position in oil and gas stocks as Oil Ministry has stated that the monthly diesel price hikes of 40-50 paise a litre are likely to continue till under-recoveries on diesel are completely wiped out. Buying was also witnessed in capital goods stocks amid report that the new government is likely to allow 100% foreign direct investment in defense sector. Buying was broad based with both mid and small cap indices were trading up by over 0.80%.

Shares of Network 18 jumped around 6% after Mukesh Ambani-controlled Reliance Industries Ltd (RIL) announced its plans to acquire a majority stake in the company. Private sector lender YES Bank has gained around 3.5% as the company has planned to raise $500 million by issuing fresh shares to a cluster of investors. Shares of Indian Oil Corporation were up nearly 2% at Rs 360 after posting 40% rise in net profit to Rs. 7019 crore for FY14 as compared to Rs. 5005 crore in the previous year.

On global front, Asian equity indices were trading mixed with Hang Seng up by 0.28% and  Jakarta Index down by 1.01% to 4,935.58. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,200 and 24,200 levels respectively. The market breadth on BSE was positive, out of 2,529 stocks traded, 1,521 stocks advanced, while 911 stocks declined on the BSE.

The BSE Sensex is currently trading at 24,299.71 up by 65.56 points or 0.27% after trading in a range of 24,353.59 and 24,167.94. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading up; the BSE Mid cap index was up by 0.84%, while Small cap index up by 1.17%.

The gaining sectoral indices on the BSE were Realty up by 2.93%, Capital Goods up by 1.56% , Oil and Gas up by 1.51%, Metal up by 1.49% and Healthcare up by 0.92%. While, IT down by 0.32%, Bankex down by 0.27% and Teck down by 0.01% were the losing indices on BSE.   

The top gainers on the Sensex were ONGC up by 2.79%, Hindustan Unilever up by 1.96%, Tata Steel up by 1.95%, Gail India up by 1.92% and BHEL up by 1.87%. On the flip side, HDFC down by 1.57%, Tata Motors down by 1.38%, SBI down by 1.31%, Axis Bank down by 1.16% and Wipro down by 0.99%.

Meanwhile, with an aim to cut fuel subsidy bill, Oil Ministry has stated that the monthly diesel price hikes of 40-50 paise a litre are likely to continue till under-recoveries (losses) on diesel are completely wiped out.

Earlier, in January 2013, the Cabinet had decided to increase diesel prices in small proportion monthly, until the difference between the retail price and the cost of production is bridged. Since the Cabinet move last year, diesel prices had raised by a cumulative Rs 8.33 a litre in 14 installments.

Presently, state-owned oil companies such as Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp currently lose Rs 4.41 on every litre of the fuel sold. However, under-recoveries on diesel for companies have been on a declining trend over the past one year due to monthly increase in diesel prices and appreciation in rupee value. If the Indian rupee appreciated to 56 to a dollar, all the losses will be wiped out and the diesel will be automatically deregulated.

Oil Ministry had also stated that the oil subsidy burden for new government will be the lowest since 2011-12. It expects that under-recoveries on sensitive petroleum products would fall 20 percent from Rs 1,39,869 crore during FY14 to Rs 1,11,000 crore in FY15.  The Ministry’s calculations are based on the crude oil prices at $105-108 a barrel and the rupee at about 58/dollar.

The CNX Nifty is currently trading at 7,257.50 up by 21.85 points or 0.30% after trading in a range of 7,272.50 and 7,118.45. There were 38 stocks advancing against 12 declining on the index.

The top gainers of the Nifty were Jindal Steel up by 3.42%, ONGC up by 3.11%, DLF up by 2.16%, BHEL up by 2.14% and Bharti Airtel up by 1.93%. On the flip side, HDFC down by 1.92%, Tata Motors down by 1.43%, SBI down by 1.22%, Axis Bank down by 1.18% and Wirpo down by 0.95% were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite up by 0.11% to 2,042.94 Hang Seng up by 0.28% to 23,074.32. While, Jakarta Index down by 1.01% to 4,935.58, Straits Times down by 1.18% to 3,295.75, Nikkei 225 down by 0.42% to 14,619.51, and Taiwan Weighted down by 0.36% to 9,075.91