Indian equities trim gains; trade continues in green

Indian equities trimmed gains but continued its firm trade in green in the late afternoon session. The market showed strength with most Asian peers gaining, as increasing hopes that government in China would further employ measures to support world’s second largest economy. Also, domestic sentiments were supported by SEBI’s recent decision to relax rules that govern Offer for Sale (OFS) and Institutional Placement Programme (IPP) mechanisms which will aid firms to smoothly conduct disinvestment process and also abide by the public shareholding regulations. Traders were seen piling up position in IT, Metal and Power sector while selling was witnessed in Auto, Consumer Durables and Oil & Gas sector. The stock market may remain volatile in the near term as traders roll over positions from the near-month June 2012 series to July 2012 series. The June 2012 derivatives contracts will expire tomorrow i.e. June 28, 2012.

On the global front, the Asian markets were trading in green barring Shanghai Composite and KOSPI Composite Index while the European markets were too trading in green on optimistic note. Egan-Jones Ratings yesterday lowered Germany's sovereign rating from AA- to A+ and issued a negative watch on the rating on expectations that the country will be left with significant uncollectable receivables due to its exposure to the euro zone. Also, from tomorrow i.e. June 28, 2012, a key two-day summit of the European Union to discuss the ongoing European debt crisis will begin. 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 1435:1142 while 149 scrips remained unchanged.

The BSE Sensex is currently trading at 16,963.62 up by 57.04 points or 0.34% after trading as high as 17,029.27 and as low as 16,950.29. There were 21 stocks advancing against 9 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.38% while Small cap index added 0.31%.

On the BSE sectoral space, IT up 1.02%, Metal up 1.01%, Power up 0.96%, TECk up 0.81% and Health Care up 0.57% were the major gainers, while Auto down 0.63%, Consumer Durables down 0.54% and Oil & Gas down 0.44% were the only laggards in the space.

Tata Power up 1.88%, Tata Steel up 1.74%, Hindalco Industries up 1.34%, Coal India up 1.24% and TCS up 1.13%, were the major gainers on the Sensex, while Tata Motors down 2.07%, M&M down 0.84%, ONGC down 0.60%, RIL down 0.44% and Bharti Airtel down 0.42% were the major losers in the index.

Meanwhile, India and European Union have finally concluded negotiations for a bilateral investment and trade agreement (BITA) by the month of October and November. This comes after number of rounds of negotiations and issues of concerns of both sides were identified.

Commerce and Industry Minister Anand Sharma said India should make a lot of efforts in addressing these issues so that the bilateral agreement becomes successful by the year end. India is looking for a quick and a stable outcome of negotiation and both sides are willing to put their views in the areas regarding mutual benefit.

On the sidelines, Sharma said, this agreement will bring a greater market access for Indian companies to provide cross-border supply of services to the counties of European Union. He also requested the European Union to free the movement of Indian Service profession, including from the IT sector.

The government also pushed for further access for the domestic industry and agricultural product in the international market. However, European Union on its part raised concerns regarding market access and patent issue.  In spite of Euro zone crisis and slowdown of the Indian economy trade between India and European Union in 2011 rose to $108.8 billion from $83.46 billion a year before.

The S&P CNX Nifty is currently trading at 5,140.30, higher by 19.50 points or 0.38% after trading as high as 5,160.10 and as low as 5,136.10. There were 36 stocks advancing against 14 declines on the index.

The top gainers on the Nifty were IDFC up 2.68%, Tata Steel up 1.75%, Reliance Infrastructure up 1.69%, Tata Power up 1.67% and HCL Tech up 1.55%.

Tata Motors down 2.29%, Kotak Bank down 2.10%, ACC down 1.35%, JP Associates down 1.07% and Cairn India down 0.76% were the major losers on the index.

In the Asian space, Hang Seng climbed 1.03%, Jakarta Composite surged 1.29%, KLSE Composite advanced 0.29%, Nikkei 225 ascended 0.77%, Straits Times Index soared 1.30% and Taiwan Weighted garnered 0.63%.

On the other hand, Shanghai Composite declined 0.23% and KOSPI Composite Index eased 0.01%.

The European markets were trading in green with, France’s CAC 40 rose 0.10%, Germany’s DAX added 0.14% and the United Kingdom’s FTSE 100 advanced 0.18%.