Sensex, Nifty erase early gains; Rupee at month's high

Indian equity markets pared some early gains, but currently trading firm in positive territory amid profit booking in blue chip stocks. The BSE - Sensex gained 72 points, while NSE - Nifty up by 0.36%. In currency markets, Indian rupee hit a month high against American currency on the back of dollar selling by exporters. On sectoral front consumer durables, realty, bank and capital goods stocks were mostly trading higher, although some of them are off their earlier highs. Automobile stocks, which opened on a firm note, have shed most of their gains now. Power stocks were trading mixed, while FMCG and information technology stocks were a bit weak. In global markets, Asian stocks rose on hopes that central banks in Europe and the US will do more to boost their ailing economies. Investors were also waiting for the European Central Bank rate decision on July 05, as well as employment data coming out of the US later this week.

The BSE Sensex is currently trading at 17,471.24 up by 72.26 points or 0.42% after trading as high as 17,526.82 and as low as 17,431.88. There were 21 stocks advancing against 9 declines on the index.

The broader indices too trimmed gains; the BSE Mid cap index advanced 0.56% while Small cap index climbed 0.66%.

On the BSE sectoral space, Consumer Durables (CD) up 1.96%, Realty up 1.31%, Bankex up 1.17%, Capital Goods (CG) up 0.89% and PSU up 0.83% were the top gainers, while IT down 0.65% and FMCG down 0.17% were the top laggards in the space.

Bharti Airtel up 3.49%, Gail India up 1.86%, ICICI Bank up by 1.72%, Maruti Suzuki up by 1.52% and Hindalco up 1.40% were the major gainers on the Sensex, while TCS down 1.47%, HUL down 0.94%, BHEL down by 0.85%, Infosys down by 0.70% and Sun Pharma down 0.45% were the major losers in the index.

Meanwhile, extenuating petrol price hike, Home Minister P Chidambaram said, the hike in petrol price is not acceptable but at the same time it cannot be avoided since India’s domestic oil production is not enough for its consumption with 80% of oil requirement stands imported. If the prices of petrol and diesel are not hiked in correlation with international prices it would affect the oil companies.

The average international price of per barrel of crude oil is $120, which is six times high than that during the NDA regime, which is leaving the government with no option but to increase the price. Currently, the government gives a subsidy of Rs 31.49 per litre on kerosene, Rs 17.64 per litre on diesel and Rs 480 per LPG cylinder.

Oil Marketing Companies (OMCs) suffer huge losses on the sale of petrol, the price of which were decontrolled in June 2010. On the other hand OMCs also suffer revenue loss on domestic sale of diesel, LPG and kerosene at a controlled price. The government normally reimburses oil firms in part through cash subsidies, whereas the upstream oil companies take up part of the revenue losses by giving discounts on crude oil and products.

By adding further Chidambaram said, 'some European countries going bankrupt have affected India. There is a slump in the foreign direct investment, foreign exchange remittances and exports'. During the last three years of UPA regime, India saw a 9% growth, whereas the average growth for the last 5-years was 8.5% as against the 5.3% during the six years of BJP rule.

The S&P CNX Nifty is currently trading at 5,297.65, higher by 19.05 points or 0.36% after trading as high as 5,317.00 and as low as 5,286.90. There were 35 stocks advancing against 13 declines on the index, while 2 stocks remained unchanged.

The top gainers on the Nifty were Bharti Airtel up 3.32%, DLF up 2.40%, Ranbaxy up 1.93%, GAIL up 1.90% and Punjab National Bank up 1.82%.

TCS down 1.60%, Grasim Industries down 1.37%, ACC down by 1.00%, BHEL down by 0.98% and HUL down 0.92% were the major losers on the index.

Asian equity indices were trading in the green; Taiwan Weighted index jumped 1.00%, Jakarta Composite surged 0.98%, Strait Times soared 0.79%, KLSE composite advanced 0.35%, Nikkei 225 up 0.70%, Kospi composite up 0.87%, Hang Seng Index  up 1.26% and Shanghai composite up by 0.25%.