Sensex trades in narrow range in noon trades; Oil & Gas, Bankex shares support

Stock markets in India continued to trade on an uninspiring note in Tuesday afternoon trades as the benchmark equity indices traded with gains of less than a quarter percent. It is turning out to be a choppy session of trade with the frontline indices trading in an extremely tight range. The psychological 16,900 (Sensex) and 5,100 (Nifty) levels were proving as strong support levels as the key indices despite repeated attempts refuse to go substantially below those levels. Domestic markets, which showed signs of consolidation as they trade with marginal gains, have also bucked the three session downtrend. However, the local markets overlooked the largely pessimistic trend that most Asian markets exhibited as investors remained concerned that the European crisis might not get a solution even in this weeks' Summit. Meanwhile reports that China has no imminent plans to introduce more stimulus policies to help revive vehicle demand in the world's biggest auto market, too dampened investors’ morale. But, markets in Europe traded on a cautious note with a slight positive bias ahead of this week's European Union summit. On the domestic front, cues from the money market remained uninspiring though the rupee came off the lows of the day and inched closer to the 57 per dollar levels. On the BSE sectoral space, the Oil & Gas pocket surged close to a percent after government allowed conditional import from Iran on cost, insurance and freight (CIF) basis for six months starting July 1, 2012 or till the issue is resolved. India also secured a waiver from US sanctions which prohibits import of crude oil from Iran in an attempt to check Tehran’s nuclear ambitions. The badly beaten down Bankex counter too bounced back after getting pummeled in the last session and traded with gains of three fourth of a percent. However, investors were seen booking profits in the defensive FMCG counter which sank close to a percent and capped the upside chances for the benchmarks.

Moreover, the broader markets too traded on a positive note with moderate gains, performing in tandem with their larger peers. The bourses advanced on good volumes while the market breadth on BSE was in favor of advances in the ratio of 1238:1158 while 137 scrips remained unchanged.

The BSE Sensex is currently trading at 16,915.47 up by 33.31 points or 0.20% after trading as high as 16,929.19 and as low as 16,841.13. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.38% and Small cap index added 0.15%.

On the BSE sectoral space, Oil & Gas up 0.94%, Bankex up 0.77%, Power up 0.67%, PSU up 0.58% and Healthcare up 0.53% were the major gainers, while FMCG down 0.81%, Consumer Durables down 0.43%, Metal down 0.21%, IT down 0.06% and TECk down 0.05% were the only laggards in the space.

Gail India up 2.20%, ONGC up 2.05%, Tata Power up 1.97%, HDFC Bank up 1.62% and TCS up 1.58% were the major gainers on the Sensex, while HUL down 2.24%, Infosys down 1.07%, Tata Steel down 1.05%, Sterlite down 0.96% and ITC down 0.78% were the major losers in the index.

Meanwhile, with the Islamic nation arranging shipping and insurance in the wake of European sanctions, the government has allowed conditional import from Iran on cost, insurance and freight (CIF) basis for six months starting July 1, 2011 or till the issue is resolved. India, which has secured a waiver from US sanctions which prohibits import of crude oil from Iran in an attempt to check Tehran’s nuclear ambitions.

European sanctions, which were announced earlier this year prohibits euro-based insurance companies from providing insurance and guarantees for transportation of oil from Iran, which has compelled many nations to reduce their oil imports from Iran. Around 90 percent of world’s tanker fleet is covered by western based protection and indemnity club, which includes personal protection and environmental cleanup claims.

As a result to this sanction, the oil ministry has proposed Iranian entity to export oil in their own ships so as to free the importer to get insurance cover for the ship and the oil. The shipping ministry has also taken up this matter with the finance ministry. Further, the oil ministry is also looking for finance ministry’s intervention to get state-owned General Insurance Corp (GIC) to provide insurance cover to domestic ships carrying oil from Iran.

The government might itself provide insurance to ships carrying crude if all other option closes. India has reduced import of oil from Iran from 18.5 million tons in 2010-11 to 17.44 million tons in 2011-12 and further down to 15.5 million tons in this fiscal. Unlike private refineries, state owned oil companies need permission from the government to import oil on cost, insurance & freight basis, which requires the seller to arrange for the carriage of goods by sea.

The S&P CNX Nifty is currently trading at 5,123.15, higher by 8.50 points or 0.17% after trading as high as 5,130.95 and as low as 5,102.30. There were 35 stocks advancing against 15 declines on the index.

The top gainers on the Nifty were ONGC up 2.44%, GAIL up 2.15%, Tata Power up 1.91%, HDFC Bank up 1.53% and TCS up 1.50%.

HUL down 2.21%, HCL Tech down 2.08%, SAIL down 1.72%, Asian Paints down 1.39% and Tata Steel down 1.11% were the major losers on the index.

In the Asian space, Shanghai Composite eased 0.09%, KLSE Composite shed 0.51%, Nikkei 225 sank 0.81%, Straits Times Index slipped 0.24%, KOSPI Composite Index dropped by 0.41% and Taiwan Weighted dipped 0.40%.

On the other hand only Hang Seng rose 21% and Jakarta Composite gained 0.27%.

The European markets got off to a positive start as France’s CAC 40 rose 0.08%, Germany’s DAX added 0.10% and the United Kingdom’s FTSE 100 advanced 0.25%.