Indian equity markets sustain gains; Sensex holds above 16,100 level

Indian equity markets showcasing their mettle continued to hold near the high point of the day, with the help of sustained gains in Oil & Gas, Technology and PSU space. Jittery nerves pacified post the reversal of European shares from day’s low point, with investors beginning to seek some value in some sectors after steep falls in the previous day. European shares opened shaky on Thursday after surveys showed major economies in the region witnessed a contraction in their manufacturing activities and German business climate deteriorated.

Closer home, value buying of select blue chip stocks, post two sessions of drubbing, have also led to the up-run of the bourses. 30 scrip sensitive index, Sensex was hovering above the 16,100 level, with gain of over a percentage point, while 50 share index, Nifty, was oscillating above the 4,900 fortress. The broader indices, appearing to be no different, were trading with profit of over 0.50%. Meanwhile, some strength also came in from Asian pacific shares, which steadied approaching the close.

The BSE Sensex is currently trading at 16,139.11 up by 191.01 points or 1.20% after trading as high as 16,184.16 and as low as 15,934.77. There were 23 stocks advancing against 7 declines on the index. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1413:1135, while 110 shares remained unchanged.

The broader indices were trading on a positive note; the BSE Mid cap index gained 0.53% and Small cap index rose 0.54%.

On the BSE sectoral space, Oil & Gas up 1.86%, Bankex up 1.65%, TECk up 1.16%, PSU up 1.16%, Metal up 0.98%, were the major gainers, while there were no losers in the space.

ONGC up 5.35%, Bharti Airtel up 3.97%, HDFC up 3.03%, Jindal Steel up 2.87% and Hindalco up 2.51% were the major gainers on the Sensex, while Maruti down 1.41%, Sun Pharma down 0.74%, BHEL down 0.55%, TCS down 0.49%, HUL down 0.39% were the major losers in the index.

Meanwhile, an Empowered Group of Ministers (EGoM) chaired by Finance Minister Pranab Mukherjee is expected to meet next week to decide on wheat exports and added supply of the grain via public distribution shops in order to tide over the foodgrain storage crises. Food Minister K V Thomas said, ‘by and large, we agree with recommendations made by the Rangarajan panel to handle surplus stocks. Based on those suggestions, we are preparing a note for the EGoM meeting likely to be held next week.’

A committee, headed by chairman of the Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan, submitted a report last week to the Prime Minister signifying offloading of 10 million tonnes of wheat to below poverty line and above poverty line families and 3 million tonnes via open market sale. It also suggested 2 million tonnes of wheat export from government warehouses.

The EGoM is expected to take a final view on the suggestions made by the panel, as massive subsidies are involved, estimated to be around Rs 17,000 crore. The Commerce Ministry on its part is analyzing the stocks available for the wheat exports. Further, the Ministry all the way through state-run STC, to discover export prices has invited tender.

Moreover, the Prime Minister under chairmanship of PMEAC Rangarajan has also set up an expert panel, to put in order a strategy to use surplus grains to avoid the storage problems. Currently, the government has storage capacity to hoard 62.8 million tonnes of food grains, whereas the foodgrains stocks are likely to touch 75 million tonnes by end of May on the back of record production and procurement.

In September 2011, the government lifted the wheat export ban and from the time only 800,000 tonnes of the grain have been exported as shipments were unviable. In the wake of abundant production and procurement in the last few years, government’s food grains stocks are increasing with wheat production likely to touch a record 90.2 million tonnes this year.

The S&P CNX Nifty is currently trading at 4,903.45, up by 67.80 points or 1.40% after trading as high as 4,907.85 and as low as 4,830.15. There were 40 stocks advancing against 10 declines on the index.

The top gainers on the Nifty were ONGC up 5.50%, Ranbaxy up 5.25%, Bharti Airtel up 4.25%, Axis Bank up 3.55%, HDFC up 3.16%. On the flip side, JP Associates down 1.58%, Maruti Suzuki down 1.36%, Cairn down 0.91%, HUL down 0.59%, BHEL down 0.53% were the major losers on the index.

In the Asian space, Shanghai Composite declined 0.53%, Hang Seng eased 0.64%, and Taiwan Weighted dropped 0.32%.

On the other hand, Jakarta Composite rose 0.08%, KLSE Composite advanced 0.55%, Nikkei 225 inched up 0.08%, Straits Times gained 0.09% and KOSPI Composite added 0.32%.

The European markets were trading on a positive note, France’s CAC 40 advanced 0.43%, Germany’s DAX climbed 0.20% and United Kingdom’s FTSE surged 0.63%.