Markets erase some early gains but retains uptrend

Strength continues in the market since early trade, though it pared some early gains due to moderate sell-off in index heavyweight. Investors were busy in buying almost across the board following a positive lead from Asian markets and previous session's sharp setback also contributed to the rally. Meanwhile Reliance Industries saw some selling pressure, moving up just 1.8%, as oil ministry will send notice to RIL on KG-D6 gas shortfall within 2 weeks. On sectoral front, bank stocks were among the most prominent gainers, with investors thronging the counters amid reports that the government is likely to infuse nearly Rs 8,000 crore into State Bank of India. While shares of country's largest lenders ICICI Bank gained over 2% ahead of third quarter numbers. Some stocks from capital goods, metal and health care sectors were witnessing some pressure. On the global front, Asian markets were trading mixed. Back home, the market breadth favoring the positive trend; there were 1,317 shares on the gaining side against 1,004 shares on the losing side while 116 shares remained unchanged.

The BSE Sensex is currently trading at 17,031.13, up by 167.83 points or 1.00%. The index has touched a high and a low of 17,081.54 and 16,965.58 respectively. There were 23 stocks advancing against just 7 declining ones on the index.

The broader indices had trimmed some gains; the BSE Mid cap and Small cap indices were up by 0.57% and 0.50% respectively.

The top gaining sectoral indices on the BSE were, Bankex up by 1.92%, IT up by 1.57%, TECk up by 1.40%, Oil and Gas up by 1.29% and Realty up by 1.09% while, CG down by 0.95%, Metal down by 0.36%, HC down by 0.18% and Power down by 0.17% were the top losers on the index.

The top gainers on the Sensex were ICICI Bank up by 2.78%, Bajaj Auto up by 2.74%, SBI up by 2.56%, TCS up by 1.93% and RIL up by 1.83%.

On the flip side, Tata Steel down by 1.88%, L&T down by 1.61%, Maruti Suzuki down by 1.47%, Coal India down by 1.21% and NTPC down by 1.05% were the top losers on the Sensex.

Meanwhile, the world’s fourth-largest oil consumer, India which imports 12% of New Delhi’s oil demand (110 million tonnes of crude per year) from Iran, is unlikely to scale down its petroleum imports from Tehran despite US and European sanctions against the Iran. Though some other countries like, Saudi Arabia, Nigeria, the other Gulf countries contributed to the supply, Iran was the second largest supplier, and it would be difficult to find replacement of this scale.

Finance Minister, Pranab Mukherjee said, ‘it is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them.’

India is the world’s fourth-largest oil consumer of the world and is Iran’s second-biggest oil client after China. China too has refused to stop its oil imports from Iran. Buying of Iranian oil without being seen as breaker of UN sanctions will be a tricky issue for India. The RBI has said that it plans to pay Tehran in Rupees but has refused to comment any further as it was a bilateral issue. However, it hopes that India can continue its imports from Iran in the long run.

The US and other Western countries had imposed sanctions on Iran's economy over its controversial nuclear programme. US President Barack Obama added to those measures on December 31, last year when he signed into law additional sanctions targeting Iran's central bank and financial sector. Consequently, Iran's supplies to India have been fraught with payment problems for the past 13 months after a clearing mechanism was scrapped in December 2010 and refiners have sought alternative supplies.

The S&P CNX Nifty is currently trading at 5,139.50, higher by 52.20 points or 1.03%. The index has touched a high and a low of 5,156.65 and 5,120.15 respectively.  There were 39 stocks advancing against just 11 declining ones on the index.

The top gainers of the Nifty were SBI up by 2.85%, ICICI Bank up by 2.73%, Bajaj Auto up by 2.57%, IDFC up by 2.54% and PNB up by 2.06%.

On the flip side, Siemens down by 2.33%, Tata Steel down by 1.74%, Maruti Suzuki down by 1.70%, L&T down by 1.49% and JP Associate down by 1.13% were the major losers on the index.

All the Asian equity indices were trading mixed; Shanghai Composite lost 0.25%, Hang Seng surged 0.57%, Nikkei 225 lost 0.99%, while Seoul Composite inched up 0.47%, Taiwan Weighted gained 1.48% and Jakarta Composite inched up by 0.01%.