Sensex, Nifty holds early gains

Indian equity markets continued positive ride following firm opening on Thursday amid strong global cues. BSE Sensex and NSE Nifty remained higher on hopes that the government may take some action on diesel price after today's Presidential poll. In currency markets rupee appreciated against dollar after dollar selling by banks and exporters. On sectoral front Information technology, power, metal, consumer durables and capital goods stocks were mostly holding their gains. Realty and bank stocks too were trading firm, while FMCG and automobile stocks were showing mixed trend. In global markets, Asian shares rose on Thursday as strong corporate profits from US bellwethers allayed fears of a slowdown in economy, while the euro steadied after being hit by comments from German Chancellor Angela Merkel that rekindled fears about the euro zone debt crisis. Back home, the market breadth favoring positive trend; there were 1429 shares on the gaining side against 892 shares on the losing side while 111 shares remained unchanged.

The BSE Sensex is currently trading at 17,317.56 up  by 104.55 points or 0.61% after trading as high as 17317.56 and as low as 17,257.19. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index was up by 0.51%, while Small cap index gained 0.75%.

The top gainers on the BSE sectoral space were, CD up by 1.68%, IT up by 1.56%, Power up by 1.37%, CG up by 1.21%, and Metal up by 1.18%, while FMCG down by 0.03%  was the only loser on the BSE.

BHEL up by 2.63%, Tata Power up by 2.34%, Infosys up by 2.26%, Tata Motors up by 2.12% and Hindalco up by 1.79% were major gainers on the Sensex, while Maruti Suzuki down by 6.80%, Bharti Airtel by 1.90%, ITC down by 0.39%, Dr Reddys Lab down by 0.36% and ONGC down by 0.14% were major losers on the index.

Meanwhile, in a big relief to the ailing power distribution companies, states have given a green signal to the big ticket restructuring package for discom, estimated to be worth Rs 1.2 lakh crore. As decided by the Centre, 50% of the short term loans outstanding on March 31, 2012 will be taken over by the state government after discoms issue bonds to lenders, while 50% of the liabilities will be rescheduled by banks and financial institutions, which would have moratorium of three years for payment of the principal amount along with the interest.

The maturity of these bonds will be 15 years and the issuance calendar will be based on the fiscal space available with states. However, the states will take on the liability of these bonds, permitted by their respective Fiscal Responsibility and Budget Management targets.

As per the mandatory condition of the Financial Restructuring Plan (FRP), each of the state must show the projection of the revenue stream for the discoms over the next three to five years, with the further condition of recovery of the loans until the discom turnaround.

A total of seven states governments, Uttar Pradesh, Punjab, Rajasthan, Haryana, Andhra Pradesh, Tamil Nadu and Madhya Pradesh, on their part would ensure that electricity tariffs are revised, subsidies are released in advance, besides, metering and audit are also taken well care off.

Further, in an incentive to the states in which the discoms FRP gets successfully implemented, 25% of the bond’s principal amount would be reimbursed by the Central government. Additionally, a matching grant would be allowed to states achieving a reduction in transmission and distribution losses over and above the targeted level in three years.

The S&P CNX Nifty is currently trading at 5,247.50, up  by 31.20 points or 0.60% after trading as high as 5,257.75 and as low as 5,238.00. There were 38 stocks advancing against 12 declines on the index.

The top gainers on the Nifty were BHEL up by 2.99%, Cairn up by 2.56%, IDFC up by 2.45%, BPCL by 2.44% and Siemens up by 2.33%. While Maruti down by 7.09%, Bank of Baroda down by 2.21%, Bharti Airtel down by 2.05%, PNB down by 0.67% and ITC down by 0.49% were the major losers on the index.

Most of the Asian equity indices were trading in the green; KLSE Composite up 0.08%  Hang Seng index up by 1.61%, Nikkei 225 up 0.79%, Kospi Composite Index up 1.56%, Straits Times up 0.27%, Taiwan Weighted up 1.41% ,Shanghai Composite was up 1.06%.  While Jakarta Composite was down by 0.04% was only loser in the Asian pack.