Markets continue to trade firm; Nifty above 7,800

Indian equity benchmarks extending early gains are trading at their intra-day high level in early noon session, on account of all-round buying by participants, tracking a rally at the other Asian markets following overnight gains at Wall. The sentiment got boosts with Chief Economic Adviser Arvind Subramanian’s statement that Inflation is completely under control and it is well within the target of the Reserve Bank. Some support also come with the Cabinet Committee on Economic Affairs (CCEA) approving several railways projects worth about Rs 8,000 crore in Odisha, Andhra Pradesh, Chhattisgarh and Bihar. CCEA also empowered the National Highways Authority of India (NHAI) to revive 34 stalled projects. Appreciation in the rupee too supported the sentiments. The rupee recovered by 16 paise to 66.12 against the dollar in early trade today at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks.

On the global front, Asian markets were trading in green, after the Federal Reserve’s meeting minutes sent strong signals of a rate increase in December. Back home, both the sensex and Nifty were trading above the crucial 25,750 and 7,800 levels, respectively. In scrip specific development, share of Insecticides (India) trades higher after the company unveiled ‘Insecticides’, a mobile phone application for farmers, shopkeepers and dealers to give them all the information about the company’s products.

The market breadth on BSE was positive, out of 2483 stocks traded, 1607 stocks advanced, while 699 stocks declined on the BSE.

The BSE Sensex is currently trading at 25762.16, up by 279.64 points or 1.10% after trading in a range of 25603.10 and 25770.13. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.87%, while Small cap index gained 1.00%.

The top gaining sectoral indices on the BSE were IT up by 1.61%, Auto up by 1.47%, TECK up by 1.38%, Consumer Durables up by 1.36% and Bankex up by 1.17%, while there were no losers on the sectoral front.

The top gainers on the Sensex were Hero MotoCorp up by 4.01%, Bajaj Auto up by 3.17%, ICICI Bank up by 2.31%, Infosys up by 1.90% and Maruti Suzuki up by 1.84%. On the flip side, Dr. Reddys Lab down by 2.48%, Coal India down by 0.55%, Sun Pharma Inds. down by 0.52%, Hindalco down by 0.46% and Lupin down by 0.09% were the top losers.

Meanwhile, the Union Cabinet chaired by the Prime Minister Narendra Modi has given its approval for a uniform marketing margin for supply of domestic gas to urea and LPG producers. The decision is likely to improve transparency and provide an element of certainty for future investments in gas infrastructure sector. From now on the marketing margin will be charged in rupees per thousand cubic meters with a view to insulate the consumer from currency volatality.

The new rate would be ‘fixed on non-discretionary basis” by the Petroleum and Natural Gas Regulatory Board (PNGRB) who recommended a range of Rs 150-200 per thousand cubic meters of gas ($0.115 per million British thermal unit) as a marketing margin for domestic gas being supplied to fertiliser and LPG plants. Further escalations up to the Wholesale Price Index would be decided by the Ministry for Petroleum and Natural Gas.

Marketing margin is a charge levied by gas marketing companies on its consumers over and above the cost or basic price of gas for taking on the additional risk and cost associated with marketing gas. Currently, different transporters are charging different margins for supply of natural gas. Marketing margins charged by producers and sellers of gas range from 11 cents to 20 cents per mmBtu.

Earlier in December 2013, the Oil Ministry has given freedom to gas retailers including Reliance Industries (RIL) and GAIL (India) , to fix the marketing margin they want to charge on sale of natural gas to consumers other than urea manufacturing units and LPG plants.

At present, RIL charges $0.135 per million British thermal unit (about Rs 225 per thousand cubic meters) as marketing margin on its eastern offshore KG-D6 gas. This is over an above the current gas selling price of $4.24 per mmBtu. While RIL charges marketing margin in US dollars, the same is charged in rupee -Rs 200 per thousand cubic meters by state-owned Oil and Natural Gas Corp and GAIL India Ltd. From now onwards the marketing margin will be charged in rupees per thousand cubic meters with a view to insulate the consumer from currency volatility.

The CNX Nifty is currently trading at 7814.45, up by 82.65 points or 1.07% after trading in a range of 7765.45 and 7818.70. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.96%, Bajaj Auto up by 3.25%, Tech Mahindra up by 3.01%, Zee Entertainment up by 2.44% and HCL Tech. up by 2.39%. On the flip side, Dr. Reddys Lab down by 2.16%, Idea Cellular down by 1.67%, Hindalco down by 0.59%, Ambuja Cement down by 0.56% and Sun Pharma Inds. down by 0.55% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 2.47 points or 0.15% to 1,658.97, Shanghai Composite increased 12.55 points or 0.35% to 3,581.02, Jakarta Composite increased 18.99 points or 0.42% to 4,516.90, KOSPI Index increased 26.04 points or 1.33% to 1,988.92, Taiwan Weighted increased 136.73 points or 1.64% to 8,477.20, Nikkei 225 increased 205.66 points or 1.05% to 19,854.84 and Hang Seng increased 259.16 points or 1.17% to 22,447.42.