Bourses showcase reversal trend to trade near intra-day’s high level

Bourses have taken a ‘U-turn’ to trade in the positive terrain as market men scurried to scoop cheap bargains available at lucrative levels post two sessions of downturn. Benchmark indices after nose diving to the low point of the day made substantial effort for the bounce back with the support of gains of stocks belonging from the Fast Moving Consumer Goods, Realty and Auto counters. However, stocks from Oil & Gas, Public Sector Undertaking and Power counters continued to provide fodder to bears.

After getting a muted start, benchmark indices slid in early deals, only to bounce back. Substantial recovery of the bourses could be well attributed to Bankex stocks. Abandoned by the worries over low growth in deposits at a time when credit was high, mainly led to the drag on banking stocks. However, short covering post two sessions of drubbing covered up the fall. Meanwhile, weaknesses were also endorsed by Gas Stocks, which went up on fire post crash of Indraprastha Gas.

Petroleum and Natural Gas Regulatory Board (PNGRB) asked the company to lower its network tariff to Rs 38.58/mmbtu and compression charge to Rs 2.7/ kg as against the company's request for Rs 104/scm and Rs 6.6/kg. The new tariff is effective immediately and retrospectively from April 1, 2008. Other stocks like Petronet LNG, Gujarat State Petronet and GAIL too were down 4-6% amid heavy volumes.

Additionally, lack of positive cues from the global front, were also restricting the further up move of the bourses. Asian shares struggled on Tuesday as investors remained cautious after Chinese trade data showed the world's second largest economy may be able to achieve a soft landing but demand may be slackening as imports growth slowed sharply. However, US future indices continued to show an uptick on the screen trade.

Back on the home turf, barometer 30 share index of Bombay Stock Exchange (BSE)-Sensex- after losing the crucial 17200 mark, claimed it back on emergence of buying by funds and retail investors at index-related stocks, in order to trade above the 17250 level. Meanwhile, broader indices too depicted reversal of trend. The wide-based National Stock Exchange index Nifty, however, gyrating in a narrow band, shied away from 5250 bastion. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1066:828, while 124 shares remained unchanged.
BSE Sensex is currently trading at 17,254.61, up by 32.47 points or 0.19%. The index has touched a high and low of 17,274.69 and 17,157.27 respectively.   There were 16 stocks advancing against 14 declines on the index.

The broader indices too shaved off losses to trade in green; the BSE Mid cap and Small cap indices were up by 0.02% and 0.11% respectively. 

The few gaining sectoral indices on the BSE were Fast Moving Consumer Goods (FMCG) up by 1.11%, Realty up by 0.93%, Auto up by 0.77%, Consumer Durable (CD) up by 0.24% and Capital Goods (CG) up by 0.23%. While, Oil and Gas down by 0.63%, PSU down by 0.26%, Power down by 0.03%, Metal down by 0.01% were the top losers on the index.

The top gainers on the Sensex were Wipro up by 1.66%, Cipla up by 0.95%, Mahindra & Mahindra up by 0.78%, TCS up by 0.68% and Hindustan Unilver up by 0.54%.

On the flip side, GAIL India down by 6.13%, Hero MotoCorp down by 1.27%, BHEL down by 0.91%, NTPC down by 0.80% and HDFC Bank down by 0.76% were the top losers on the index.

Meanwhile, India has recorded the second highest growth in domestic air traffic in the world for the month of February, preceded only by Brazil. However, the high rise is masking the financial weakness facing the Indian carriers.

As per the global airline body International Air Transport Association (IATA), India experienced the second strongest growth among the major domestic markets at 12.3%. However, this growth comes with the inherent weaknesses facing the Indian airlines in terms of high operating costs and taxation. Nonetheless India's carriers filled 75.4% of seats.

Globally, Brazil had the fastest growth compared to the previous year as the demand was up by 17.9%. The global traffic for February showed an 8.6% improvement in passenger demand and a 5.2% rise in cargo demand compared to the same month in the previous year. Since the economic outlook for the world remains fragile, business class travel growth is expected to be subdued.
IATA has also pointed out that ill-conceived policy initiatives that over-regulate, excessively tax or otherwise restrain the aviation industry prevent it from being the catalyst for economic growth that it can be. Like in the UK, apart from the rapid rise in oil prices, there was hiking air passenger duty. Europe too was adding to the cost burden by including international aviation in its emissions trading scheme.  Hence as the economic risks are diminishing, political risks are on the rise.

The S&P CNX Nifty is currently trading at 5,249.15, up by 14.75 points or 0.28%. The index has touched a high and low of 5,255.80 and 5,218.30 respectively.  There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were Tata Motors up by 2.07%, IDFC up by 1.67%, Tata Power up by 1.45%, Hindustan Unilever up by 1.42% and Kotak Bank up by 1.31%, while GAIL down by 3.07%, Ranbaxy down by 1.67%, BPCL down by 1.66%, ONGC down by 1.43% and Dr Reddy’s Lab down by 1.08% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Jakarta Composite gained 0.11%, KLSE Composite added 0.29%, Nikkei 225 inched up by 0.01%, Straits Times rose 0.26%, and Taiwan Weighted was up by 0.58%.

On the flip side, Shanghai Composite slid 0.96%, Hang Seng plunged 1.16%, Seoul Composite slid 0.20%.