Cap Goods, Oil & Gas counters power Nifty past crucial 5,350 levels

Stock markets in India sustained the joy of closing in the positive territory for the third successive session on the penultimate day of the first week of April after the frontline equity climbed around three fourth of a percent and settled around the psychological 17,600 (Sensex) and 5,350 (Nifty) levels.

Domestic bourses got off to a gap-up opening in the morning and remained in fine fettle through the session as market participants showed largely across the board buying interests. Though some bouts of profit booking surfaced in the late hours after the benchmark indices touched the highest point in the day, however the key indices managed to regain some lost ground and settled around the key technical levels by the end.

Investors added hefty positions in the Capital Goods counter as the power equipment maker BHEL’s encouraging provisional earnings reading raised optimism about profits in the capital goods sector. The heavyweight, BHEL led the gainers in Capital Goods counter by surging 1.5% after reporting provisional net profit at Rs 6,868 crore for the financial year 2011-12, 14.25% rise from the previous fiscal and the government too has decided to put on hold plans to sell a stake in the state-run company.

The Oil & Gas, Metal and rate sensitive Bankex counters too witnessed hefty buying and supported the frontline indices. Moreover, shares from the Aviation space including SpiceJet and Kingfisher skyrocketed in the session after the airlines filed application with the Director General of Foreign Trade (DGFT) seeking permission to directly import aviation turbine fuel (ATF).

Shares from the Automobile and Cement counters too kept buzzing in the session on announcing monthly sales numbers while all media stocks including NDTV, Network 18, etc witnessed sudden spurt after investors showed kneejerk reaction to reports that government may clear FDI cap in broadcasting services and increase the limit to 74% from current 49%.

However, the upside in local markets was capped as bond yields spiked after traders dumped bonds to make way for the heaviest weekly debt supply totaling $3.54 billion in the holiday-shortened week. The government is set to sell Rs 30 billion each of 8.97% 2030 bonds and 8.83% 2041 bonds; Rs 80 billion of 9.15% 2024 bonds and Rs 40 billion of 8.19% 2020 bonds respectively.

While there was some profit booking evident in the defensive Healthcare and IT pockets, which closed with moderate cuts. Meanwhile, the market regulator SEBI has allowed listing of local stock exchanges, subject to a few conditions, rejecting a significant recommendation of the Jalan Committee report.

On the global front, sentiments got support from the supportive cues from global markets. Asian equities largely settled on a positive note as market participants remained influenced by the overnight upmove on Wall Street on the back of solid US factory activity report.

The data which was over the 50% mark, indicated more manufacturers are expanding in the US and countered concerns over reports that European unemployment rose to a 14-year high in February and manufacturing contracted for an eighth month in March. Besides, the European market after opening on a flat note are gradually inching higher into the green terrain after registering their biggest one-day gain in three weeks in the last session.

Back home, the NSE’s 50-share broadly followed index Nifty, gained about three fourth of a percent to settle above the psychological 5,350 support level while Bombay Stock Exchange’s Sensitive Index - Sensex amassed a hundred and twenty points to finish just below the crucial 17,600 mark. Moreover, the broader markets showed resilience and surged by around a percent, comprehensively outperforming their larger peers.

The markets rose on tepid volumes of over Rs 0.97 lakh crore while the turnover for NSE F&O segment too remained on the lower side as compared to that on Monday at over Rs 0.72 lakh crore, since it was the third day of a new F&O series. The market breadth remained positive through the session as there were 1,796 shares on the gaining side against 1,023 shares on the losing side while 117 shares remained unchanged.

Finally, the BSE Sensex gained 119.27 points or 0.68% to settle at 17,597.42, while the S&P CNX Nifty rose by 40.60 points or 0.76% to close at 5,358.50.

The BSE Sensex touched a high and a low of 17,664.10 and 17,570.01 respectively. The BSE Mid cap and Small cap index up by 0.95% and 1.14% respectively.

The top gainers on the Sensex were Hindalco up 3.25%, Sterlite Industries up 2.87%, SBI up 1.95%, L&T up 1.93% and ICICI Bank up 1.87%, while Hero MotoCorp down 2.25%, Maruti Suzuki down 2.12%, Sun Pharma down by 1.04%, TCS down by 1.04% and Bharti Airtel down by 0.96% were the major losers on the index.

The top gainers on the BSE sectoral space were Consumer Durables (CD) up 3.89%, Power up 1.89%, Capital Goods (CG) up 1.74%, Realty up 1.59% and Bankex up 1.02%, while Oil & Gas down 0.28%, Metal down 0.27%, Health Care (HC) down 0.13% and Auto down 0.06% were the top losers on the BSE sectoral space.

Meanwhile, reeling under the pressure of high international oil prices, the state owned oil companies have decided to hike auto Liquefied Petroleum Gas (LPG) prices yet again by a substantial Rs 6 per litre, the third hike in a year. Auto LPG will now cost Rs 49.72 per litre as against Rs 43.65 per litre last month.

Oil firms revise auto LPG rates every month based on average of international benchmark prices. For the past month, crude oil has remained above the $120 per barrel mark, necessitating the hike in prices.  Auto LPG prices were hiked by almost Rs 3 per litre on March 1 when rates were increased from Rs 40.7 per litre to Rs 43.65 a litre.

Cooking gas, or LPG used in households is yet another item on which oil firms are losing a record Rs 570.50. The current price of LPG hovers around Rs 400 a cylinder. Oil companies are typically reimbursed by the government on the losses they make, but this leads to ballooning of the subsidy bill of the government. Of late the government has been criticized for its huge subsidy bill which has led to a large fiscal deficit. Estimated LPG subsidy for FY12 is Rs 27,000 crore.

The S&P CNX Nifty touched a high and low of 5,378.75 and 5,344.45 respectively.

The top gainers on the Nifty were JP Associates up 4.66%, Cairn up 3.96%, Hindalco up 3.50%, Sesa Goa up 3.14% and Sterlite Industries up 3.02%. On the flip side, Dr Reddy down by 2.55%, Hero MotoCorp down 2.49%, Maruti Suzuki down 2.26%, TCS down 1.52% and RPower down 1.47% were the top losers on the index.

The European markets were trading mixed, as France's CAC 40 down 0.41%, Britain’s FTSE 100 down 0.12%, while Germany's DAX was up by 0.04%.

Sentiments continued to remain jubilant for yet another day in Asian region and most of the Asian equity markets snapped the day’s trade in the positive terrain on Tuesday after solid manufacturing data from the United States offsetting signs of mild recession in Europe. The data came a day after China’s official PMI showed a surprise surge to a one-year high, providing some much-needed relief from recent concerns about a severe slowdown in the world’s number two economy, a key engine of global growth.

Meanwhile, Hong Kong stocks rebounded after a four-day losing streak as strength in the Chinese property sector after several leading developers reported rising sales figures in March from the month before. While, Seoul shares climbed to a two-week high, tracking a rally in global equities after strong manufacturing data from the United States gave confidence to global growth prospects. However, Japanese Nikkei share average fell on Tuesday but remained above 10,000 level, with the yen’s climb to a three-week high against the dollar prompting investors to lock in profits on blue-chip exporters that have logged sharp gains since January.

Stock market in China remained closed for public holiday and will reopen on Thursday.