Indian equities continue firm trade; Sensex above 18,400 mark

Indian equities continued its firm trade in green in the late afternoon session on back of buying in the frontline counters. The sentiments remained upbeat in the session after government released an encouraging India's first-ever CPI-based inflation data which showed inflation based for Rural Labourers (CPI-RL) and Agricultural Labourers (CPI-AL) fell to 4.92% and 5.27% in January from 6.37% and 6.72% in December. Traders were seen piling up positions in Consumer Durables, Realty and Oil & Gas sector while selling was witnessed in Auto and IT sector. Industry heavyweight RIL was trading firm in green with gain of around more than two and half percent giving the much needed support. Also, ONGC and Cairn India from Oil & Gas sector was trading firm pushing the markets up. DLF from Realty pack was trading firm pulling the markets higher. ADA Group companies like Reliance Communications, Reliance Infrastructure and Reliance Power were seen trading in green. However, Maruti Suzuki, Tata Motors and Bajaj Auto from Auto pack were seen trading weak driving the markets down. Infosys and Wipro from IT pack were seen trading in red exerting pressure on the market. On the global front, Asian markets were trading on a mix note while the European markets were trading in red on pessimistic note. However, investor mood was upbeat on encouraging reports that Finance ministers from the Euro-zone have finally struck a deal for Greece's second bailout package however, details were still being worked out in the early hours of Tuesday, more than 12 hours after discussions began. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,600 and 18,400 levels respectively. The market breadth on BSE was in favor of advances in the ratio of 1554:1287 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 18,426.01 up by 136.66 points or 0.75% after trading as high as 18,452.51 and as low as 18,293.80. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index gained 0.78% while Small cap gained 1.22%.

On the BSE sectoral space, Consumer Durables up 4.23%, Realty up 3.01%, Oil & Gas up 1.87%, Power up 1.50% and Capital Goods up 0.92% were the major gainers while Auto down 0.07% and IT down 0.07% was the only loser in the space.

BHEL up 4.63%, Tata Steel up 3.29%, Hindalco Industries up 2.71%, ONGC up 2.56% and RIL up 2.49% were the major gainers on the Sensex, while Sterlite Industries down 2.74%, Maruti Suzuki down 1.52%, Wipro down 1.20%, HUL down 0.95% and Tata Motors down 0.86% were the major losers in the index.

Meanwhile, provisional annual inflation for January 2012 stood at 7.65% as compared to January 2011. Inflation in rural areas was up to 7.38% and for the urban areas it was at 8.25%, as per data released by the Ministry of Statistics & Programme Implementation.

The highest price increase over the corresponding period last fiscal was for clothing, bedding and footwear, an indicator that buyers were spending more on accessories. Among food products, the sharpest increase in prices was for milk and products at 16.5%, followed by oils and fats at 13.47%. Retail prices also rose by 10.45% for eggs, fish and meat. Vegetables were cheaper by over 24% on a nationwide basis in January over the same month last year. Prices for fuel and light also jumped sharply at 13.13%.   

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation releases Consumer Price Indices (CPI) on base 2010=100 for all-India and States/UTs separately for rural, urban and combined every month with effect from January, 2011. However there has been a long pending demand of ministries and various users for a comprehensive consumer inflation rate. Hence for the first time the annual consumer price index (CPI) data has been released which measures retail prices in major food groups, fuel, clothing, housing and education across rural and urban India.

Unlike most central banks, which mainly use the CPI to monitor inflation and set monetary policy, the Reserve Bank of India (RBI) has long used the wholesale price index (WPI) as India's main inflation gauge. The Consumer Price Index, which was introduced a year ago, will now exist alongside the prevailing Wholesale Price Index (WPI), followed in India. The CPI rate has been introduced keeping in mind that demand-side pricing would be a better indicator of inflation than the WPI since it defines the extent to which retailers may pass on any sustained increase in wholesale prices to the consumers. The WPI focuses on prices from the producers' side. 

Yesterday the Ministry of Labour & Employment also released January numbers for All-India CPI for Agricultural Labourers (CPI-AL) and Rural Labourers (CPI-RL)(Base: 1986-87=100). As per the data, the overall index remained stationary at 618 points for Agricultural Labourers and 619 points for Rural Labourers in January 2012 as compared to December 2011. Though all the items in the index showed an upward price movement, food items witnessed a fall keeping the index stationary.

Point to point inflation, saw a sharp drop and the Consumer Price Index for Rural Labourers (CPI-RL) fell to 4.92% in January 2012 (year-on-year) as compared 6.37% in December 2011.The rate of price rise based on the Consumer Price Index for Agricultural Labourers (CPI-AL) also fell to 5.27% in January from 6.72% in December 2011.

The rise/fall in index varied from State to State.  In case of Agricultural Labourers, it recorded an increase between 1 to 5 points in 14 States and a decrease between 2 and 12 points in 5 States. It, however, remained stationary in 1 State. Maharashtra with 690 points topped the index table whereas Himachal Pradesh with the index level of 514 points stood at the bottom.

In case of rural labourers, 14 States recorded an increase between 1 to 5 points, while six States saw a fall of between 1 and 11 points. Once again, Maharashtra was at the top with 683 points, while Tripura was at the bottom with 534 points.

The S&P CNX Nifty is currently trading at 5,603.90, higher by 39.60 points or 0.71% after trading as high as 5,617.75 and as low as 5,561.75. There were 34 stocks advancing against 16 declines on the index.

The top gainers on the Nifty were BHEL up 4.37%, Tata Steel up 3.33%, Reliance Communications up 3.17%, Hindalco Industries up 2.98% and Reliance Infrastructure up 2.92%.

Sterlite Industries down 2.78%, Maruti Suzuki down 1.63%, Wipro down 1.01%, HUL down 0.87% and Tata Motors down 0.71% were the major losers on the index.

In the Asian space, Shanghai Composite advanced 0.75%, Hang Seng jumped 0.25%, KLSE Composite added 0.21%, Jakarta Composite jumped 0.19% and Straits Times inched higher 0.07%. On the flipside, Nikkei 225 declined 0.23%, Seoul Composite lost 0.03% and Taiwan Weighted shed 0.42%.

The European markets were trading in red with, France’s CAC 40 dropped 0.09%, Germany’s DAX shed 0.06% and Britain’s FTSE 100 lost 0.11%.