Barometer gauges reverse side to trade in green; CG space outperforms

Barometer gauges after slipping into negative terrain in early deals have reversed the trend to trade in green, in light of positive global set up after a flood of cheap European Central Bank funds this week eased fears of a meltdown in the euro zone financial sector, leading to the increased investor’s risk appetite.

Borrowing cues from firmly trading regional counterparts, benchmark indices overriding some weak data and concerns about surging oil prices, bounced back in green. Asian stock markets rose after U.S. stocks advanced modestly, with investors picking up beaten-down cyclicals, led by financials while oil and coal companies got a boost from crude oil's continued rise. Positive readings for U.S. jobless claims and upbeat sales for U.S. retailers on Thursday helped the regional mood though some investors remained cautious after the oil price spike and soft U.S. manufacturing data.

Back on the home turf, positive momentum of the bourses could also be accredited to the stocks belonging from the Capital Goods, Metal and Power counters. However, stocks from Realty, Fast Moving Consumer Goods and Information Technology counters limited the upside journey of the bourses. Thus, the 30 share barometer index of BSE-Sensex-adding over 25 points, managed to trade above its physiological 17600 level. Similarly, the 50 share index of NSE-Nifty-too enticing slender gains, was trading above 5350 support level. The overall market breadth on BSE was in the favour of advances which outpaced declines in the ratio of 1462:755, while 94 shares remained unchanged.

The BSE Sensex is currently trading at 17,623.66, up by 39.69 points or 0.23%. The index has touched a high and a low of 17,674.63 and 17,504.38 respectively. There were 20 stocks advancing against 10 declining ones on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices were up by 0.64% and 0.74% respectively.

The top gaining sectoral indices on the BSE were, CG up by 1.36%, Metal up by 1.31%, Power up by 1.01%, HC up by 0.93% and CD up by 0.51%. While, Realty down by 1.49%, FMCG down by 0.34%, IT down by 0.22%, and TECk down by 0.03% were the top losers on the index.

The top gainers on the Sensex were Hindalco Industries up by 2.36%, Jindal Steel up by 2.28%, Sun Pharma up by 2.20%, NTPC up by 1.73% and Tata Steel up by 1.63%.

On the flip side, DLF down by 5.05%, ONGC down by 1.95%, Bajaj Auto down by 1.35%, HDFC down by 0.84% and ITC down by 0.70% were the top losers on the Sensex.

Meanwhile, the government has decided to cut subsidies on Di-Ammonium Phosphate (DAP) and Muriate of Potash (MOP) for 2012-13. This is the government’s latest move towards controlling the burgeoning fiscal deficit which has already breached its annual target of 4.6% of GDP in January. It has left urea untouched which is the most used crop nutrient and accounts for the bulk of government's spending on fertilisers.

The government has approved reduction in per Kg NBS (Nutrient Based Subsidy Policy) rates of fertilizer nutrients namely Nitrogen (N), Phosphate (P) and Potash (K) by 11.6%, 32.6%, and 10.3% respectively to Rs 24, Rs 21.804, and Rs 24.  It has, however, kept the sulphur subsidy steady at Rs 1.677 per kg. This has led to a reduction in subsidy on DAP to Rs 14,350 a tonne, down by 27.4% from Rs 19,763 in 2010-11, and on MOP to Rs 14,440 from Rs 16,054, a fall of 10%. The rates will be effective from April 01, 2012.

At the announced rate, total subsidy outgo for the P&K fertilizers for the financial year 2012-13 would be reduced by more than 20%. The cut in subsidies has come in following the recent decline in global prices and an appreciating rupee combined with the government’s need to reduce the gap in its fiscal deficit.

It is also expected that the farmers will increase their usage complex fertilizers given a reduction in prices. Following the decontrol in April 2010, prices of non-urea fertilisers had almost doubled on account of rising global raw material costs and a weakening rupee. The farmers had shifted to cheaper urea during kharif and rabi seasons in the current financial year following an increase in phosphatic fertiliser prices. 

The S&P CNX Nifty is currently trading at 5,351.75, up by 12.00 points or 0.22%. The index has touched a high and a low of 5,369.45 and 5,315.05 respectively.  There were 34 stocks advancing against 15 declines while one stock remained unchanged on the index.

The top gainers of the Nifty were Hindalco Industries up by 2.79%, Jindal Steel up by 2.23%, IDFC up by 2.01%, Sun Pharma up by 1.98% and Ambuja Cement.

On the flip side, DLF down by 4.65%, ONGC down by 2.01%, Bajaj Auto down by 0.87%, HDFC down by 0.66%, and ITC down by 0.60% were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite gained 0.93%, Hang Seng added 0.97%, Jakarta Composite rose 0.57%, KLSE Composite expanded by 0.72%, Nikkei 225 shot up by 0.71%, Straits Times was up by 0.40%, Seoul Composite soared by 0.25% and Taiwan Weighted also accumulated gains of 0.15%.