Firm trade prevails in afternoon deals

Indian equity benchmarks continued their firm trade in early afternoon session on account of buying in front line counters. At present, Sensex and Nifty were trading above their crucial levels of 32,450 and 10,150 respectively.  Apart from blue chips, the broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 0.90%. The sentiments remained on positive note with the private report stating that India is likely to overtake Japan and Germany to become the third largest economy in the next 10 years but needs to be consistent in reforms and focus more on the social sector. Some support also came with the report that India's external debt came down by $13.1 billion or 2.7 percent to $471.9 billion at the end of March this year on annual basis mainly due to decrease in NRI deposits and commercial borrowings. Moreover, a firming trend at other Asian markets along with appreciation in Indian rupee too supported the markets. In scrip specific development, National Aluminium Company (Nalco) surged by 2.50 percent on plan to tap renewable energy resources to meet rising power requirements.

On the global front, Asian markets were trading mostly in green, following the record closing highs on Wall Street Friday and on easing worries about North Korea. Investors also looked ahead to the US Federal Reserve and Bank of Japan's meetings later this week for clues on the direction of monetary policy. Back home, the BSE Sensex is currently trading at 32481.24, up by 208.63 points or 0.65% after trading in a range of 32361.25 and 32508.06. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.93%, while Small cap index was up by 1.02%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.79%, Telecom up by 1.72%, Industrials up by 1.44%, Auto up by 1.38% and Consumer Disc up by 1.15%, while Healthcare down by 0.34% was the only losing index on BSE.

The top gainers on the Sensex were Bajaj Auto up by 3.25%, Tata Motors - DVR up by 2.58%, Larsen & Toubro up by 2.50%, Tata Motors up by 1.92% and Coal India up by 1.44%. On the flip side, Sun Pharma down by 1.61%, Dr. Reddy’s Lab down by 1.01%, ONGC down by 0.69%, Tata Steel down by 0.68% and SBI down by 0.02% were the top losers.

Meanwhile, calling for a cut in the levies on transportation of fuel, the industry body, Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report has said that the consumer are getting restless about a three year high in the petrol and diesel prices because they feels the market pricing mechanism is being distorted by frequent tax hikes when the crude oil prices fell steeply. It noted that even after rising in the last three months, crude oil prices are mere half of $107 per barrel in May, 2014. It also said that if the prices are market determined, the retail prices should have been less than Rs 40 a litre.

The chamber has stated that it is true that crude oil has shot up by about 18 percent from $45.60 per barrel, taking the pump prices of petrol  in Delhi (for instance) to Rs 70.39 per litre from Rs 65.40 three months ago. It also said that the increase in the retail prices is far less than hike in crude oil, but the consumer is not willing to compare the crude prices of $45.60 in June versus $54 per barrel today. Adding further, it pointed out that with $107 per barrel, the retail price of auto fuel was Rs 71.51 per litre, then how come it is about the same when the Indian basket of crude is trading at half that level at $53.83 per barrel, the consumers would ask.

The report further said that even though the pricing regime has been linked to market determined rates, a sharp hike in taxes in the form of excise and sales tax or VAT by the Centre and states have distorted the path of reforms. It also said that consumers cannot be faulted because the reforms cannot be one way. It added that if the exchequer got a windfall on drop in crude prices by additional taxes, the same must be reduced commensurately. Besides, it noted that while the government needs resources for building infrastructure and welfare schemes, over-dependence on petrol and diesel, both by the centre and the states would hamper the economic growth.

The CNX Nifty is currently trading at 10165.60, up by 80.20 points or 0.80% after trading in a range of 10131.30 and 10167.15. There were 43 stocks advancing against 7 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Bharti Infratel up by 3.37%, Bajaj Auto up by 3.19%, Tata Motors - DVR up by 2.87%, Larsen & Toubro up by 2.44% and Indusind Bank up by 2.30%. On the flip side, Sun Pharma down by 1.84%, Dr. Reddy’s Lab down by 1.05%, Aurobindo Pharma down by 0.64%, ONGC down by 0.63% and Tata Steel down by 0.60% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite added 10.4 points or 0.31% to 3,364.02, KOSPI Index rose 32.14 points or 1.35% to 2,418.21, Taiwan Weighted was up by 51.16 points or 0.48% to 10,631.57 and Hang Seng increased 305.8 points or 1.1% to 28,113.39.

On the flip side, Jakarta Composite decreased 4.59 points or 0.08% to 5,867.80 and FTSE Bursa Malaysia KLCI was down by 0.94 points or 0.05% to 1,785.39.