Markets make a cheerful start tailing regional peers

Indian markets have made a cheerful start of the day after consolidating in the previous session, the mood across the globe turned sanguine on expectation of stimulus measures from the different central banks after manufacturing data came weaker than expected from China to US. Though, the US markets made a mixed closing but most of the Asian markets were trading in green on hopes of some resolution to Euro zone crisis. Back home, barring the IT sector all the major indices are witnessing good gains with rate sensitive realty taking the lead. There was some profit booking seen in rate sensitive’s in last session after the manufacturing data came at four month high. Today, the strengthening rupee too is supporting the markets; the domestic currency has continued its winning streak for the fourth consecutive session. There was some concern related to low monsoon rains but allying apprehensions over the possibility of deficit rainfall this monsoon season, Planning Commission Deputy Chairman Montek Singh Ahluwalia had said that it is too early to reach the conclusion that something adverse is happening. Meanwhile, the broader indices have gained momentum and are outperforming the benchmarks.

The market breadth on BSE was positive in the ratio of 1171:437 while 82 scrips remained unchanged.

The BSE Sensex is currently trading at 17,493.76 up by 94.78 points or 0.54% after trading as high as 17,526.82 and as low as 17,457.71. There were 26 stocks advancing against 4 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.68% while Small cap index climbed 0.68%.

On the BSE sectoral space, Realty up 1.59%, Consumer Durables up 1.33%, Bankex up 0.98%, HC up 0.79% and Auto up 0.75% were the top gainers, while IT down 0.13% and FMCG down 0.01% were the only laggards in the space.

Bharti Airtel up 3.86%, Gail India up 2.00%, Dr Reddys Lab up 1.77%, ICICI Bank up 1.69% and ONGC up 1.26% were the major gainers on the Sensex, while TCS down 1.02%, BHEL down 0.55%, Infosys down 0.52%, and ITC down 0.04% were the major losers in the index.

Meanwhile, the recent power tariff hike of 26% by the Delhi Electricity Regulatory Commission (DERC) will come into effect from July 01, 2012, the fourth hike in past ten months. The domestic consumers will be the most impacted from this change as opposed to commercial and industrial categories.  As per the revised tariff plan, Rs 3.70 per unit for the first 200 units of power instead of the current Rs 3 will be charged. Consumers having monthly usages of upto 400 units will have to pay Rs 4.80 per unit of power. Further, usage of above 400 units, Rs 6.40 per unit will be charged instead of current Rs 5.70.

Earlier, in August 2011, the regulators had hiked power traffic by 22% for all categories of customers. The traffic was again raised by 5%, which was further increased up by 2% in May to correct the power purchase cost of distribution companies. The steepest hike of 34% was done on November 11, 2009.

The areas served by NDPL will experience 27.88% hike while areas powered by BSES Rajdhani Power and BSES Yamuna Power will be 25.47% and 25.29% respectively. Justifying the recent hike, DERC said, the hike was necessary as collective deficit of three discoms have been estimated to be around Rs 6,000 crore as there was no second option to that.

The increase in power may also result in increase in metro fares and water charges as DERC has announced separate rates for power being supplied to these two entities. The monthly fixed charges for consumers have also been raised considerably. For a consumer having a sanctioned load of upto 2 kilowatts, the rate tariff has been increased from Rs 30 to Rs 40 whereas consumers having sanctioned load between 2 kilowatts to 5 kilowatts will have to pay Rs 100 as fixed charges instead of the current Rs 75. The fixed charges for consumers having a sanctioned load of above five kilowatt will be Rs 20 instead of current Rs 15.

The DERC announced separate rates for industrial units, agricultural activities, public lighting etc. For Delhi Metro, rates have been raised from Rs 3.80 per unit to Rs 5 per unit whereas for Delhi Jal Board it has been hiked from Rs 5.60 to Rs 7.25 per unit for load of upto 10 kilowatts. For load between 10 kilowatts to 100 kilowatts, per unit of power would cost Rs 6.60 whereas Rs 8 has been fixed per unit for load beyond 100 kilowatts.

The S&P CNX Nifty is currently trading at 5,308.90, higher by 30.30 points or 0.57% after trading as high as 5,317.00 and as low as 5,294.15. There were 40 stocks advancing against 10 declines on the index.

The top gainers on the Nifty were Bharti Airtel up 2.74%, GAIL up 2.06%, Ranbaxy up 2.06%, DLF up 1.98% and Dr Reddy up 1.82%.

ACC down 0.88%, Grasim down 0.70%, Cairn down 0.56%, BHEL down 0.51% and TCS down 0.46% were the major losers on the index.

All the Asian equity indices were trading in green; Taiwan Weighted index jumped 1.07%, Jakarta Composite surged 0.97%, Strait Times soared 0.89%, KLSE Composite advanced 0.35%, Nikkei 225 up 0.69%, Kospi Composite up 0.85%, Hang Seng Index up 1.56% and Shanghai Composite up by 0.63%.