Indian markets make gap up start; Nifty recaptures 5,400 mark

Buoyed by global optimism, Indian markets have continued their northward journey for second straight session after a four day of correction. The markets benefited from Europe's approval of another bailout agreement for Greece and from the new European Central Bank governor's efforts to provide financing for European banks. The US markets surged overnight while; all the Asian counters barring Shanghai Composite were trading in the positive terrain at this point of time. Back home, BSE’s -- Sensex -- and NSE’s -- Nifty -- were trading comfortably over their crucial, 17,900 and 5,400 mark respectively, supported by most of the index heavyweight along with broader indices. All the sectoral indices are trading in green zone in the opening trades. Realty index has zoomed by over three percent followed by counters like PSU, consumer durable, oil and gas, capital goods, metal and power, all gaining by nearly 2 percent each. Meanwhile, shares of ONGC surged near 4 percent in early trade after the state-run explorer said it will launch on Thursday a share sale through an auction with a floor price of Rs 290 that aims to raise at least $2.5 billion. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,277 shares on the gaining side against 350 shares on the losing side while 56 shares remained unchanged.

Moreover, investors are eying the third quarter gross domestic product (GDP) data slated to be announced today. The first quarter of 2011-12 saw the economy growing by 7.7%, while the figure was 6.9% in the second quarter, thus delivering a 7.3% economic expansion in the first half. Advance estimates pegged the economic growth at 6.9% for the entire FY12.

The BSE Sensex opened at 17,919.93; about 189 points higher compared to its previous closing of 17,731.12, and has touched a high and a low of 18,001.35 and 17,912.95 respectively.

The index is currently trading at 17,942.15, up by 211.03 points or 1.19%. There were 28 stocks advancing against just 2 declines on the index.

The overall market breadth has made a strong start with 75.88% stocks advancing against 20.80% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 1.71% and 1.42% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 3.03%, PSU up by 2.28%, CD up by 2.20%, Oil and Gas up by 2.04% and CG was up by 2.03%. While, there were no losers on the index.

The top gainers on the Sensex were ONGC up by 3.99%, BHEL up by 3.39%, Sun Pharma up by 2.44%, Tata Power up by 2.41% and Sterlite Industries up by 2.32%.

On the flip side, TCS was down by 0.30% and Infosys was down by 0.05% were the only losers on the Sensex.

Meanwhile, sharp rise in the prices of petrol, diesel and liquefied petroleum gas (LPG) cylinders can be expected after the conclusion of the Assembly polls in the five States. With the volatile international crude oil prices exerting pressure on the oil companies’ balance sheets, the government may be forced to hike prices before the start of the parliament session on March 12.

Tensions between the United States and Iran coupled with latest European Union sanctions against Tehran have ignited the crude oil markets worldwide. The Indian crude oil basket touched a new high of $123 per barrel on February 27. However, the Oil Marketing Companies (OMC) has not been able to revise prices due to the crucial assembly elections in states such as Uttar Pradesh, Punjab and Uttarakhand.

Even though petrol prices were deregulated by the government in June 2011, any change in them has to be approved by the EGoM. The prices, which are supposed to be recalibrated every fortnight, haven’t been changed since December 01, 2011 keeping in view the assembly elections.

The oil industry claims to have lost about Rs 900 crore since the last revision. Besides petrol, State-owned oil firms are losing Rs 12.77 per litre on diesel, Rs 30.21 a litre on kerosene and Rs 378 per 14.2-kg domestic LPG cylinder. Indian Oil Corp., Bharat Petroleum and Hindustan Petroleum are losing over Rs 410 crore a day on sale of diesel, domestic LPG and kerosene.

With the government’s subsidy bill threatening to go out of control and the OMCs suffering huge losses, pressure is mounting on the government to bring in a sharp hike in prices of petrol, diesel and LPG. If it comes through, the hike in petrol prices is expected to be around Rs 4 per litre, as per government officials. Cooking gas prices too could go up by Rs 70 per cylinder and diesel by about Rs 5 per litre.

The S&P CNX Nifty opened at 5,424.95; about 29 points higher compared to its previous closing of 5,375.50, and has touched a high and a low of 5,458.80 and 5,424.50 respectively.

The index is currently trading at 5,441.45, higher by 65.95 points or 1.23%. There were 48 stocks advancing against just 2 declines on the index.

The top gainers of the Nifty were ONGC up by 4.09%, SAIL up by 3.76%, BHEL up by 3.39%, JP Associates up by 3.20% and RPower up by 3.04%.

On the flip side, TCS down by 0.23% and Cairn down by 0.20% were the only losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng was up 112.63 points or 0.52% to 21,681.36, Jakarta Composite was up 50.73 points or 1.30% to 3,954.28, KLSE Composite was up 12.01 points or 0.77% to 1,568.74, Nikkei 225 was up 103.69 points or 1.07% to 9,826.21, Straits Times was up 22.05 points or 0.74% to 2,991.78, Seoul Composite was up 27.49 points or 1.37% to 2,031.18 and Taiwan Weighted was up by 135.20 points or 1.70% to 8,094.54. 

On the flip side, Shanghai Composite was down by 14.51 points or 0.59% to 2,437.35.