Benchmarks add gains in late afternoon session

Indian equity benchmarks added gains to continue their firm trade in the late afternoon session on account of buying in frontline blue chip counters. Investors have started eyeing release of Q1FY15 GDP data and Current Account Deficit numbers, due later in the week, for further direction of the market. Traders were seen piling up positions in Consumer Durables, IT and Auto while selling was witnessed in Realty, Power and Infra sector stocks. Hectic activity was witnessed in shares of defence related sector after government notified increase in FDI limit to 49% through approval route in the sector. In scrip specific development, UCO Bank was trading weak as the government ordered limited forensic audit into some of its non-performing accounts. Kotak Mahindra Bank was trading in red after global brokerage firm downgraded the stock to neutral from outperform. The market may remain volatile in the near future as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. August 2014 series to next month i.e. September 2014 series. The near-month August 2014 F&O contracts will expire tomorrow i.e. on August 28, 2014.

On the global front, the Asian markets were trading mostly in green, while the European markets traded mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,900 and 26,500 levels respectively. The market breadth on BSE was positive in the ratio of 1496:1300 while 123 scrips remained unchanged.

The BSE Sensex is currently trading at 26575.19, up by 132.38 points or 0.50% after trading in a range of 26526.47 and 26599.12. There were 18 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.69%, while Small cap index up by 0.77%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.00%, IT up by 1.00%, Auto up by 0.85%, TECK up by 0.78%, FMCG up by 0.78% while, Realty down by 1.03%, Power down by 0.70%, INFRA down by 0.54%, Metal down by 0.43% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.24%, ONGC up by 1.77%, Bajaj Auto up by 1.44%, Tata Motors up by 1.38% and Wipro up by 1.23%. On the flip side, NTPC down by 1.60%, Sesa Sterlite down by 1.35%, BHEL down by 1.01%, Sun Pharma down by 0.62% and HDFC Bank down by 0.52% were the top losers.

Meanwhile, Oil Ministry will seek Cabinet's nod for deregulation of diesel prices after retail rates achieve parity with global levels. The Ministry has also proposed that the Government and upstream companies should share under-recoveries for the financial year 2014-15 and onwards equally.

Earlier, in January 2013, the government decided to gradually deregulate diesel prices by rising diesel prices in small proportions of 40-50 paise monthly, until the difference between the retail price and the cost of production is bridged. The under-recovery has now come down to Rs 1.78 a litre. By the end of October this year, diesel fuel might be completely deregulated like petrol. Deregulation of diesel prices would empower state-owned oil firms to change rates in tandem with costs as it is done for petrol.

Oil ministry also proposed to cut subsidy payout by upstream firms like ONGC and Oil India by half. Currently, state fuel retailers sell diesel, domestic LPG and kerosene at government controlled rates which are way below their cost. The loss is filled by government through cash subsidy and upstream firms like Oil and Natural Gas Corp (ONGC) by way of discounts on crude oil.

The under-recovery burden imposed unilaterally on upstream oil companies include ONGC and OIL by the government has increased to Rs 67,021 crore in 2013-14 from Rs 32,000 crore in 2008-09 which has significantly constrained the capacity of these companies to invest in exploration for oil and gas. The Ministry also proposed that the fuel under-recovery which is expected at Rs 98,622 crore for the current fiscal is to be split equally between the government and upstream firms ONGC/OIL. However, under-recovery payout by upstream companies would be after accounting for oil cess paid by them to the government.

The CNX Nifty is currently trading at 7939.60, up by 34.85 points or 0.44% after trading in a range of 7924.30 and 7946.85. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 2.76% Jindal Steel & Power up by 2.72% , ICICI Bank up by 2.38%, ONGC up by 1.76% and BPCL up by 1.70%. On the flip side, DLF down by 4.20%, Power Grid down by 1.72%, NTPC down by 1.52%, Kotak Mahindra Bank down by 1.48% and BHEL down by 1.46% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 2.36 points or 0.11% to 2,209.47, KOSPI Index increased 6.88 points or 0.33% to 2,074.93, FTSE Bursa Malaysia KLCI increased 7.61 points or 0.41% to 1,869.43, Jakarta Composite increased 12.18 points or 0.24% to 5,158.73, Nikkei 225 increased 13.6 points or 0.09% to 15,534.82, Straits Times increased 15.04 points or 0.45% to 3,338.06 snd Taiwan Weighted increased 91.63 points or 0.98% to 9,485.59. On the other hand, Hang Seng decreased 155.75 points or 0.62% to 24,918.75

The European market were trading mostly in red, Germany’s DAX decreased 9.57 points or 0.1% to 9,578.58 and France’s CAC decreased 5.03 points or 0.11% to 4,388.38 while, UK’s FTSE 100 increased 4.31 points or 0.06% to 6,827.07.