Benchmarks trade in fine fettle in early deals

Indian equity benchmarks, after a cautious start, are trading in fine fettle in early deals on Monday on hopes of some solution to the geopolitical tension. Sentiments also remained up-beat as Prime Minister Narendra Modi, in his Independence speech, presented government’s business-friendly side and invited global businesses to make India their manufacturing base. Rally in Infrastructure stocks too supported the sentiments after Centre said it is ready to invite bids for Dholera investment region in Gujarat in the next three months and for integrated industrial townships in Greater Noida and Vikram Udyogpuri in Madhya Pradesh along the Delhi-Mumbai Industrial Corridor.

On the global front, the US markets ended modestly lower in last session on escalating geopolitical tension, weakness in consumer sentiments too weighed on the sentiments. The Asian markets were trading mostly in the red at this point of time, although foreign ministers of Ukraine and Russia began talks in Berlin, as European leaders push for an end to the conflict.

Back home, on the sectoral front, consumer durables, capital goods and oil and gas witnessed the maximum gain in trade, while fast moving consumer goods, software and technology remained the few losers on the BSE sectoral space. The broader indices too were trading in-line benchmarks, while the market breadth on the BSE was positive; there were 1261 shares on the gaining side against 577 shares on the losing side while 77 shares remain unchanged.

The BSE Sensex opened at 26123.69; around 20 point higher compared to its previous closing of 26103.23, and has touched a high and a low of 26190.91and 26075.28 respectively. The BSE Sensex is currently trading at 26183.94, up by 80.71 points or 0.31%. There were 22 stocks advancing against 8 stocks declining on the index.

The overall market breadth remained in the favour of advances with 65.85% stocks advancing against 30.13% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.89%, while Small cap index up by 1.22%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.21%, Capital Goods up by 1.15%, Oil & Gas up by 0.99%, Power up by 0.96% and Bankex was up by 0.88% while, FMCG down by 0.55%, IT down by 0.54% and TECK down by 0.20% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 2.98%, Tata Motors up by 2.20%, Cipla up by 2.03%, BHEL up by 1.88% and ONGC up by 1.35%. On the flip side, ITC down by 1.84%, Infosys down by 0.96%, HDFC down by 0.70%, TCS down by 0.65% and Wipro down by 0.17% were the top losers.

Meanwhile, amid growing talks over the new gas formula, the government has cleared that it will announce new gas price formula by September end. Oil Minister Dharmendra Pradhan has asserted that decision will be taken keeping in mind public interest and recommendations of the Parliamentary Standing Committee and a new formula will be announced by September 30. Till then, the $4.2 per mmBtu price of gas will continue.

Earlier, Parliamentary Standing Committees on Finance had stated that gas price should have some linkage with the cost of production and called for a review of the formula suggested by the panel headed by Dr C Rangarajan. Meanwhile, Oil Ministry has highlighted that the cost of gas production varies between USD 1.86 per mmBtu to USD 4.31 per mmBtu but a cost-plus price would be perceived negatively by the market.

In June 2013, the government had approved Rangarajan 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). As per the formula, the gas prices will get doubled at $8.8 per million British thermal unit from the current price at $ 4.20 per mbtu and put excessive burden on consumers by increasing the cost of urea, power and CNG. The government had decided to implement Rangarajan formula from April 1 but with general elections being declared it was postponed by three months to July 1. The NDA government on June 25 postponed its implementation by a further three months to September

The CNX Nifty opened at 7,785.25; about 6 point lower as compared to its previous closing of 7,791.70, and has touched a high and a low of 7819.85 and 7779.20 respectively. The CNX Nifty is currently trading at 7815.80, up by 24.10 points or 0.31%. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 3.20% and Tata Motors up by 2.21% and BPCL up by 1.98% and Cipla up by 1.97% and BHEL up by 1.81%. On the flip side, ITC down by 1.84%, Infosys down by 1.17%, TCS down by 0.73%, HDFC down by 0.58% and Wipro down by 0.28% were the top losers.

Asian markets were trading mostly in the red; KOSPI Index dipped 5.20 points or 0.25% to 2,058.02, Straits Times dropped by 8.54 points or 0.26% to 3,306.23, Jakarta Composite tumbled by 6.59 points or 0.13% to 5,148.96, FTSE Bursa Malaysia KLCI slipped 1.49 points or 0.08% to 1,862.82 and Taiwan Weighted was down by 49.09 points or 0.53% to 9,157.72.

On the flip side, Nikkei 225 surged by 3.77 points or 0.02% to 15,318.34, Hang Seng gained 153.58 points or 0.62% to 24,954.94 and Shanghai Composite was up by 20.27 points or 0.92% to 2,226.73.