Indian equities continue firm trade in the late afternoon session

Indian equities continue firm trade in the late afternoon session on back of buying among investors. Traders were seen piling up the positions in bankex, realty and oil & gas sector while selling was witnessed in capital goods sector. Sentiments also remained sanguine despite government slightly lowering India’s economic growth forecast to 8.4 percent from the earlier estimate of 8.5 percent for financial year 2010-11. ICICI Bank was trading with gain of around five and half percent on back of its announcement of third quarter earnings which were better than the street’s expectations. Also, SBI, Axis Bank, Kotak Bank and HDFC Bank from Banking counter were seen trading firm pulling the markets higher. Industry heavyweight RIL was in green, the company's share buyback programme starts from tomorrow, February 01, 2012 and the last date for the buy-back is January 19, 2013. GAIL, ONGC and BPCL from Oil & Gas sector were trading in green giving the much needed support. Coal India, the world's largest coal miner, was trading in red on reports that the company has cut prices yesterday. On the global front, all the Asian markets traded in green barring Jakarta Composite while the European markets were too trading in green on an optimistic note. Some tentative improvement in investors’ risk appetite was evident amid hopes of a positive outcome of Greek debt negotiations after Greek Prime Minister Lucas Papademos said that major progress has been made in debt-swap talks. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,150 and 17,050 levels respectively. The market breadth on BSE was in favor of advances in the ratio of 1598:1087 while 102 scrips remained unchanged.

The BSE Sensex is currently trading at 17,080.22 up by 216.92 points or 1.29% after trading as high as 17,102.66 and as low as 16,965.58. There were 25 stocks advancing against 5 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index climbed 1.35% while Small cap advanced 1.05%.

On the BSE sectoral space, Bankex up 2.63%, Realty up 2.43%, Oil & Gas up 1.37%, Metal up 1.36% and IT up 1.33% were the major gainers while Capital Goods down 0.18% was the only losers in the space.

ICICI Bank up 5.43%, DLF up 3.34%, Hindalco Industries up 3.24%, Bajaj Auto up 3.01% and SBI up 2.73% were the major gainers on the Sensex, while HUL down 1.78%, Maruti Suzuki down 1.71%, Coal India down 1.52%, L&T down 0.78% and NTPC down 0.73% were the major losers in the index.

Meanwhile, amendments in coal export policy by Indonesia have coerced the Indian Government to consider taking up the issue bilaterally with the coal exporting nation. Indonesia is one of the biggest exporters of coal to India accounting for more than 50% of imports followed by Australia and South Africa.

Recently, the Indonesian government, in its attempt to encourage base metal and coal downstream industry development in its country, has decided to impose export duty on coal and minerals from 2012 and a total ban from the year 2014. Also, it wants to discourage export of coal without any value addition and has, therefore, imposed a ban on exports of coal with low calorific value (below 5,100 kcal/kg) unless these are upgraded to medium grade (5,700 kcal/kg and more). The regulation also states that coal exports from the country have to be benchmarked with the Indonesian government's export price, which has recently been raised.

This is expected to considerably impact the Indian coal industry as India imports coal grades from 5,000 kcal/kg to as low as 3,500 kcal/kg from Indonesia. Coal with energy value of 5,100 kcal/kg or less comprised 41.21 % of Indonesia's total coal exports in 2011. Moreover the Planning Commission had said that the domestic coal demand is set to rise to 1,000 million tonnes, from 5550-600 MT now, during the XII Plan, which will lead to an import of 200 million tonnes to bridge the shortfall in the country’s production. India on its part is looking to increase the target for additional production by Coal India (CIL). If the environment issues are sorted out, CIL can increase its coal production by 100 MT, conservatively speaking, for the 12th Five-Year Plan Period. Coal production could also go up to 160 MT.

The S&P CNX Nifty is currently trading at 5,155.50, higher by 68.20 points or 1.34% after trading as high as 5,164.70 and as low as 5,120.15. There were 41 stocks advancing against 9 declines on the index.

The top gainers on the Nifty were ICICI Bank up 5.44%, Sesa Goa up 4.25%, JP Associates up 3.85%, Reliance Communications up 3.76% and IDFC up 3.61%.

PNB down 2.65%, HUL down 1.97%, Cairn India down 1.66%, Maruti down 1.64% and Coal India down 1.59% were the major losers on the index.

In the Asian space, Shanghai Composite gained 0.33%, Hang Seng climbed 1.14%, Nikkei 225 rose 0.11%, Seoul Composite advanced 0.79%, Strait Times ascended 0.13% and Taiwan Weighted soared 1.48%. On the flipside only Jakarta Composite declined by 0.07%.

The European markets were trading in green with, France’s CAC 40 ascended 0.80%, Germany’s DAX jumped 0.57% and Britain’s FTSE 100 soared 0.78%.