Markets trade in green despite huge round of volatility

The Indian markets are truly depicting the volatility of the F&O series expiry week and after almost touching to the red line in early morning trade and bouncing back to near the days high in late morning trade, the benchmark indices are once again showing the declining trend in noon trade, however managing to stay in green with marginal gains. The broader markets have lost their steam and are trading in red, though the Asian markets are showing strength and barring the Chinese market all are in green, the European markets too have made a positive start and major indices are up by around half a percent in early trade. Back home, the consumer durables and realty stocks have given the much needed support to the markets. The Mumbai based realty stocks have bounced back after their last session’s beating, as the state government on Monday deferred plans to hike stamp duty for leave-and-licence agreements for residential and commercial properties. However the auto companies are reeling in red with the excise tax duty hike.

The BSE Sensex is currently trading at 17,117.36, up by 64.58 points or 0.38% after touching a high and low of 17,230.34 and 17,061.16 respectively. There were 15 stocks advancing against 15 declines on the index.

The broader indices were underperforming the benchmarks; the BSE Mid cap index was down by 0.28% and Small cap index has lost 0.10%.

On the BSE sectoral space, Consumer Durables (CD) up by 1.53%, Realty up by 1.35%, FMCG up by 0.92%, TECk up by 0.64% and Health Care (HC) up by 0.57% were the major gainers.

On the flip side, Power down by 0.54%, Bankex down by 0.11%, PSU down by 0.10%, Auto was down by 0.07% and Capital Goods (CG) down by 0.03% were the top losers.

Cipla up by 3.17%, Sterlite Inds up by 2.68%, HUL up by 2.51%, Bharti Airtel up by 2.36% and DLF up by 2.11 were the major gainers on the Sensex, while Maruti Suzuki down by 2.30%, Tata Power down by 1.88%, BHEL down by 1.65%, NTPC down by 1.12% and Jindal Steel down by 1.08% were the major losers in the index.

Meanwhile, a FICCI panel in a report has cited that bringing down the subsidies to 2% or below that may be a difficult task for the government. Since government has not clarified the roadmap to cut down the subsidy level from current 2.4%.

FICCI had partnered with Friedric Ebert Stiftung (FES) in a post-budget interaction on a wide range of subjects such as government expenditure, subsidies, fiscal deficit etc. As per the panel estimates, the implementation of food security bill will alone amount to a minimum of 0.7% of GDP and could be as high as 1.5 % given the government estimate of Rs 1.12 lakh crore. Moreover there has been no clear word on the deregulation of fuel prices, especially diesel. Hence the task of lowering subsidies appears tough.

On fiscal deficit, the panel has stated that over the medium term, the government hopes to bring down fiscal deficit further and has targeted a reduction to 4.5% by FY2014 and 3.9% by FY2015. However it has criticized the budget for not incentivizing growth.

The Finance Minister, Pranab Mukherjee presented the Union Budget on March 16, in which he stated that the government would try and contain subsidies at a 2% level in the next fiscal. However questions were raised about the viability of the target given the fact that the government is keen to implement the Food Secutity Bill by the end of the year. Moreover there have been no provisions in the budget to increase revenue except for hiking of service tax and excise duty, whose collections will not be enough to offset the expenditure on the Food Security Bill. However, recently the government has been hinting at a reduction in fuel subsidies.

The S&P CNX Nifty is currently trading at 5,198.55, up by 14.30 points or 0.28% after trading in a range of 5,246.05 and 5,184.65. There were 28 stocks advancing against 22 declines on the index.

The top gainers on the Nifty were Cipla up by 3.22%, Sterlite Inds up by 2.73%, HUL up by 2.32%, DLF up by 2.14% and Bharti Airtel was up by 2.08%.

BHEL down by 2.21%, Maruti Suzuki down by 2%, Tata Power down by 1.83%, Wipro down by 1.43% and NTPC down by 1.33% were the major losers on the index.

All the Asian markets barring, Shanghai Composite that eased 0.12%, were trading in green.

Hang Seng surged by 1.65%, Jakarta Composite was up by 0.87%, Nikkei 225 zoomed by 2.36%, KLSE Composite rose 0.27%, Straits Times was up by 1.08%, Seoul Composite added 1.02% and Taiwan Weighted was up by 0.78%.

The European markets have extended their gains with a positive start, France’s CAC 40 added 0.23%, Germany’s DAX ascended 0.53% while Britain’s FTSE 100 was up by 0.33%.