Indian equities continue firm trade in the late afternoon session

Indian equities continued its firm trade in green in the late afternoon session. The domestic markets showed signs of consolidation after previous session’s close to a percent gains. Traders were seen piling up position in Power, Capital Goods and Health Care sector while selling was witnessed in TECk, Realty and IT sector. The power generation stocks were seen trading firm on account of lower international coal prices, which could boost profitability of power generation firms using imported coal. While stocks from the cement sector were seen trading under pressure as competition commission of India (CCI) is soon expected to come out with its report on cement cartelization, which is likely to spell havoc for not less than eleven major cement manufacturers who were found guilty of being involved in price cartel. It is believed that the CCI will panelize the cement manufacturers by about Rs 3,000 crore. In the scrip specific development, Aarey Drugs and Pharmaceuticals touched 52-week high after the company informed that a meeting of the board of directors will be held on June 27, 2012, to discuss and consider the allotment of bonus shares.

On the global front, the Asian markets were trading in green barring Shanghai Composite while the European markets were seen trading in red on pessimistic note. Investors were exhibiting subdued trends ahead of the US FOMC outcome in which the central bank is expected to announce stimulus package. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,100 and 16,800 levels respectively. The market breadth on BSE was positive in the ratio of 1472:1069 while 145 scrips remained unchanged.

The BSE Sensex is currently trading at 16,894.80 up by 35.00 points or 0.21% after trading as high as 16,943.55 and as low as 16,840.10. There were 19 stocks advancing against 10 declines while 1 stock remained unchanged on the index.

The broader indices were trading on a positive note; the BSE Mid cap index climbed 0.65% while Small cap index too advanced 0.65%.

On the BSE sectoral space, Power up 1.33%, Capital Goods up 1.28%, Health Care up 1.09%, Auto up 0.98% and Metal up 0.69% were the major gainers, while TECk down 0.24%, Realty down 0.24%, IT down 0.16% and FMCG down 0.09% were the only laggards in the space.

Dr Reddy’s Lab up 2.92%, Tata Motors up 2.81%, Jindal Steel up 2.45%, BHEL up 2.25% and Hero MotoCorp up 1.93% were the major gainers on the Sensex, while Coal India down 2.02%, Hindalco Industries down 1.79%, HDFC Bank down 1.14%, Bharti Airtel down 1.13% and TCS down 1.08% were the major losers in the index.

Meanwhile, the Competition Commission of India (CCI) is soon expected to come out with its report on cement cartelization, which is likely to spell havoc for not less than eleven major cement manufacturers who were found guilty of being involved in price cartel, according to reports. Out of 39 cement companies, which were investigated by the competition watchdog CCI for a year on charges of price collusion and artificial scarcity, the top 11 companies by revenue will probably face the penal action.

The highest penalty prescribed in the Competition Act 2002, is 10% of three years’ average turnover. It is believed that the CCI will panelize the cement manufacturers by about Rs 3,000 crore. Out of the eleven companies, UltraTech Cement, Ambuja Cements and ACC are expected to be impacted the most since they control a third of the volumes in India while others like Jaypee Cements, India Cements and Madras Cements will too have to bear hefty brunt of the penalty. The cumulative turnover of the 11 companies is estimated to be around Rs 37,500 crore.

The CCI initiated its investigation on cartelization charges after Builders Association of India (BAI), a realtors’ body, alleged that the retail prices fixed by cement manufacturers were almost similar. The body complained that cement makers apart from forming a cartel to fix the commodity’s retail prices at almost similar levels, also deliberately trim down production to inflate prices.

The S&P CNX Nifty is currently trading at 5,119.90, higher by 16.05 points or 0.31% after trading as high as 5,134.65 and as low as 5,100.70. There were 35 stocks advancing against 13 declines while 2 stocks remained unchanged on the index.

The top gainers on the Nifty were HCL Tech up 3.67%, Sesa Goa up 3.02%, Tata Motors up 2.98%, Dr Reddy’s Lab up 2.86% and Jindal Steel up 2.76%.

Coal India down 2.03%, Hindalco Industries down 1.59%, IDFC down 1.39%, Bharti Airtel down 1.32% and DLF down 1.22% were the major losers on the index.

In the Asian space, Hang Seng climbed 0.53%, Jakarta Composite surged 0.95%, KLSE Composite gained 0.38%, Nikkei 225 soared 1.11%, Straits Times Index rose 0.15%, KOSPI Composite Index ascended 0.65% and Taiwan Weighted amassed 0.85%.

On the other hand only Shanghai Composite declined 0.34%.

The European markets were trading in red with, France’s CAC 40 dropped 0.08%, Germany’s DAX eased 0.12% and the United Kingdom’s FTSE 100 fell 0.12%.