Indian equities add gains to continue firm trade

Indian equities added gains to continue its firm trade in the late afternoon session on back of buying in front line counters. The markets were showing some signs of recovery after the brutal butchery in last two trading sessions owing to the disappointing budget. Traders were seen piling up position in Consumer Durables, Bankex and Realty sector while selling was witnessed in Auto sector. PNB, HDFC Bank, SBI, Kotak Bank and ICICI Bank from Banking counter were seen trading firm in green pulling the markets higher. DLF from Realty sector was seen trading with gain of around one and half percent pushing the markets higher. Industry heavyweight RIL was trading in green giving the much needed support. However, Tata Motors, Bajaj Auto, Maruti, Hero MotoCorp and M&M from Auto pack were trading weak in red driving the markets down. In the scrip specific development, Tech Mahindra and Mahindra Satyam were seen trading firm in green as the company’s board is meeting today to consider merger details. The boards are likely to consider final merger proposals. IRB Infrastructure Developers climbed higher on reports that its Sindhudurg airport has got environmental clearance. Tata Communication edge higher as the government has shown interest to approve divestment proposal in it. The government is likely to appoint bankers for the stake sale. The government holds 26% stake in the company as of December 2011. On the global front, Asian markets were trading in red barring KLSE Composite and Straits Times while the European markets were trading in red on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,250 and 17,300 levels respectively. The market breadth on BSE was in favor of declines in the ratio of 1166:1522 while 146 scrips remained unchanged.

The BSE Sensex is currently trading at 17,352.97 up by 79.60 points or 0.46% after trading as high as 17,410.13 and as low as 17,211.73. There were 22 stocks advancing against 8 declines on the index.

The broader indices were trading on a flat note; the BSE Mid cap index gained 0.34% while Small cap index was down 0.22%.

On the BSE sectoral space Consumer Durables up by 1.95%, Bankex up 1.46%, Realty up 1.16%, FMCG up 0.77% and Health Care up 0.76% were the major gainers, while Auto down 1.37% was the only loser in the space.

Sun Pharma up by 2.65%, HDFC Bank up by 1.91%, Jindal Steel up by 1.79%, SBI up by 1.68% and TCS up by 1.65%, were the major gainers on the Sensex, while Tata Motors down 2.91%, Coal India down 1.99%, Bajaj Auto down 1.78%, Maruti Suzuki down by 1.13% and Hero MotoCorp down by 0.89% were the major losers in the index.

Meanwhile, facing increasing queries on how the government plans to control its fiscal deficit, the Finance Minister has hinted at an increase in fuel price soon. He has stated that he will be discussing the issue with various political parties post the budget session (after 30 March), to work out an overall mechanism through which the issue can be resolved.

The oil companies have also been demanding that prices of petrol, diesel, liquefied petroleum gas (LPG) and kerosene be hiked to control the heavy losses they are suffering. Since petrol prices have been deregulated, a hike in them could come in sooner, while  hike in prices of other fuels will require political consensus.

Currently oil companies are losing Rs 14.73 a litre on diesel, Rs 30.10 a litre on kerosene and Rs 439.50 per LPG cylinder. They are also losing over Rs 5 a litre on petrol as petrol prices have not moved in tandem with costs. The government has been sanctioning subsidies to the companies to cover the losses. However, this is significantly impacting its expenditure due to the rapid increase in global crude prices.

An increase in fuel prices will help the government cut its subsidy burden and narrow its fiscal deficit. In the current fiscal, the government has provided Rs 65,000 crore in fuel subsidy, which it hopes to trim down to Rs 40,000 crore in 2012-13. It targets to bring down the subsidy bill to below 2% of GDP in FY’13 and its fiscal deficit to 5.1%.

The S&P CNX Nifty is currently trading at 5,281.20, higher by 24.15 points or 0.46% after trading as high as 5,297.35 and as low as 5,233.25. There were 33 stocks advancing against 16 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were PNB up 3.06%, Cairn India up 2.64%, Sun Pharma up 2.47%, BPCL up 2.37% and HDFC Bank up by 2.16%.

Tata Motors down by 3.03%, Coal India down by 2.18%, Bajaj Auto down 1.74%, Reliance Infrastructure down by 1.64% and Maruti Suzuki down 0.99% were the major losers on the index.

In the Asian space, Shanghai Composite plunged 1.38%, Hang Seng declined 1.08%, Jakarta Composite fell 0.44%, Seoul Composite shed 0.24% and Taiwan Weighted sank 0.89%. On the other hand, KLSE Composite added 0.06% and Straits Times moved climbed 0.58%.

The European markets were trading in red with, France’s CAC 40 dropped 0.86%, Germany’s DAX declined 0.53% while Britain’s FTSE 100 shed 0.54%.