Indian equities exhibits firm trade in late afternoon session

Indian equities continued its firm trade in green in the late afternoon session. 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. Traders were seen piling up position in Oil & Gas, Power and Bankex sector while selling was witnessed in FMCG, Consumer Durables and Metal sector. In the scrip specific development, Tata Steel was trading under pressure on euro-zone debt worries as more signs of distress in the region's financial system emerged on June 25, 2012. The European operations constitute about 65% of the company’s sales. FMCG companies like Britannia Industries, HUL, ITC, Godrej Consumer Products, Nestle India and Ruchi Soya Industries were seen trading under pressure attracting huge volumes on India Meteorological Department statement that the country is expected to receive the least rainfall recorded in the last 30 years.

On the global front, the Asian markets were trading in red barring Hang Seng and Jakarta Composite while the European markets were trading on a mix note. German Chancellor Angela Merkel yesterday rejected joint euro-area bonds or bills in a speech. Meanwhile, Moody's Investors Service downgraded the long-term debt and deposit ratings for 28 Spanish banks by one to four notches reflecting the agency view that Madrid's ability to provide support to the local banking system has declined. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,100 and 16,900 levels respectively. The market breadth on BSE was positive in the ratio of 1311:1232 while 145 scrips remained unchanged.

The BSE Sensex is currently trading at 16,917.36 up by 35.20 points or 0.21% after trading as high as 16,946.66 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 0.35% while Small cap index added 0.17%.

On the BSE sectoral space, Oil & Gas up 1.06%, Power up 0.91%, Bankex up 0.81%, PSU up 0.63% and Realty up 0.58% were the major gainers, while FMCG down 0.80%, Consumer Durables down 0.37%, Metal down 0.33%, IT down 0.16% and TECk down 0.11% were the only laggards in the space.

Gail India up 2.24%, Tata Power up 1.97%, HDFC Bank up 1.87%, ONGC up 1.74% and TCS up 1.30% were the major gainers on the Sensex, while HUL down 2.16%, Tata Steel down 1.70%, Sterlite Industries down 1.06%, ITC down 0.76% and Infosys down 0.75% were the major losers in the index.

Meanwhile, a move that is expected to fast-track the award of new thermal plants, the Power Ministry is likely to finalise the revised Standard Bidding Documents (SBDs) for the upcoming thermal power projects, including the ultra mega power projects (UMPPs) in an inter-ministerial meeting on June 28.

The revised norms are expected to deal with the contentious issue of passing on the increase in raw material price to the end consumer. After Indonesia linked its fuel prices to the international market in September last year, many private power producers have approached the government to allow them to hike tariff of the imported coal-based projects.

The documents, once finalized will pave way for inviting preliminary bids for UMPPs. The government plans to establish two more UMPPs in Orissa, one at Cheyyur in Tamil Nadu and another at Sarguja in Chhattisgarh. In July 2011, the initial bids for setting up a 4,000 MW UMPP at Bedabahal in Orissa were invited, with 20 companies submitting the bids.

The second and final round of bidding can only take place once the new bidding documents are in place. The nodal agency for UMPPs, Power Finance Corporation, has allotted 4 such projects so far. The government also aims to add 90,000 MW capacity by 2017 and these UMPPs are expected to contribute substantially for the same.

The S&P CNX Nifty is currently trading at 5,125.80, higher by 11.15 points or 0.22% after trading as high as 5,134.55 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 GAIL India up 2.18%, ONGC up 2.05%, HDFC Bank up 2.00%, Grasim up 1.97% and Ambuja Cement up 1.97%.

SAIL down 2.45%, HUL down 2.10%, Asian Paints down 1.84%, Tata Steel down 1.72% and HCL Tech down 1.34% were the major losers on the index.

In the Asian space, Shanghai Composite eased 0.09%, KLSE Composite shed 0.50%, Nikkei 225 sank 0.81%, Straits Times Index slipped 0.07%, KOSPI Composite Index dropped by 0.41% and Taiwan Weighted dipped 0.40%.

On the other hand only Hang Seng rose 0.45% and Jakarta Composite gained 0.78%.

The European markets were trading on a mix note with, France’s CAC 40 dropped 0.30%, Germany’s DAX added 0.11% and the United Kingdom’s FTSE 100 advanced 0.15%.