Broad based buying send benchmarks near high point of the day

Emergence of buying by funds and retail investors at existing lower levels amid start of new monthly settlement in the derivatives segment has mainly led to the spurt of the bourses in early deals. The early rally came on the back of rate sensitive counters such as that of Realty and Bankex, which spiked up after Reserve Bank of India, assessing the prevailing liquidity conditions, decided to conduct Open Market Operations (OMO) Purchase of Government Securities for Rs 10,000 crore on March 30, 2012. However, some of the trader’s also viewed the bounce back as technical relief as the barometer gauges after dropping for two consecutive sessions, were bound to witness some short covering.

However, even the bounce back of the regional counterparts, added to the glory of the bourses. Asian shares surged as investor’s risk appetite was seen rising on the back of expectation that U.S. reports later today would show that consumer confidence rose to near the highest level in a year. However, data that showed Japan’s industrial production unexpectedly dropped in February, while South Korea’s output rose at a slower pace and the economy expanded less than the central bank estimated in the fourth quarter, restricted gains. The US future indices were showing an uptick in the screen trade.

Back home, Bombay Stock Exchange’s Sensex, after gaining over percentage and half points, was trading at the high point of the day at 17300 psychological level. Although the gains across 13 sectoral space, signaled the strength of the bourses, however, even gains of broader indices heartened investors. Both Midcap and Smallcap index registered gains in line with that of frontline indices. The widely followed index of National Stock Exchange’s Nifty after clinching gains of over percentage and half points was oscillating above the 5250 level. The overall market breadth on BSE was in the favour of advances which thrashed declines in the ratio of 1643: 571, while 96 shares remained unchanged.

The BSE Sensex is currently trading at 17,300.32, up by 241.71 points or 1.42%. The index has touched a high and a low of 17,303.13 and 17,105.22 respectively. All the 30 stocks were on the advancing side on the index.

The broader indices too captured gains in line with benchmarks; the BSE Mid cap and Small cap indices surged 1.44% and 1.41% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 2.12%, Metal up by 2.06%, Bankex up by 1.90%, PSU up by 1.83% and Oil & Gas up by 1.60%. The top gainers on the Sensex were Gail India up by 3.69%, Hindalco Industries up by 3.45%, Tata Steel up by 2.63%, ICICI Bank up by 2.45% and Tata Power up by 2.29%. While, there was no loser on the Sensex.

Meanwhile, freight rate of container shipping lines are likely to go up. The hike has been necessitated by the fact that earnings of container shipping companies have taken a beating due to decrease in volumes. There has also been a continuous increase in the cost of bunker or fuel costs. As a result the shipping companies are finding it difficult to cover their operating costs.

This information was given by the Union Minister of Shipping, G K Vasan.  As per the minister, shipping companies are currently facing a dip in their volumes because of the global recession. Further they are being faced with higher costs in terms of fuel and bunker costs. This has led to an increase in the operating costs necessitating a rise in rates. 

The quantum of increase of freight rates would depend upon market conditions. However, the rise in rates will lead to an increase in the cost of products/merchandise shipped. Export containers from India carry textiles, spices, processed cashew-nuts, basmati rice and pharma products. Products imported to India in containers include small wooden logs and raw cashew.

According to experts, freight rates have not been revised by the industry to the extent of increase in marine fuel prices. The fuel costs have more than doubled in the last two years and have led to reduced profits of the companies in the sector.

The S&P CNX Nifty is currently trading at 5,249.55, higher by 70.70 points or 1.37%. The index has touched a high and low of 5,254.85 and 5,203.65 respectively.  There were 47 stocks advancing against just 3 declines on the index.

The top gainers of the Nifty were JP Associates up by 3.56%, IDFC up by 3.22%, Tata Power up by 3.08%, Gail India up by 2.99% and SAIL up by 2.92%.

On the flip side, ACC down by 0.51%, Cairn India down by 0.33% and HUL down by 0.01% were the major losers on the index.

Asian markets were trading mixed; Shanghai Composite gained 0.20%, Jakarta Composite rose 0.04%, KLSE Composite added 0.42%, Straits Times accumulated 0.27%, Seoul Composite was up by 0.03% and Taiwan crept higher by 0.31%.

On the flip side, Hang Seng down by 0.58% was the lone loser in the Asian pack.