Benchmarks trade in fine fettle; heightened diesel hike expectation supports the uptrend

Recovering from intra-day’s low level, barometer gauges managed to gain additional traction in comparison to their early deals. However, even positive European cues, bolstered the risk appetite of investor’s, which scurried to grab some more blue chip stocks available at attractive valuation after previous session’s massive drubbing. Sentiment since early trade at Dalal Street were fortified on account of petrol price hike by 70 paise from some state run fuel retailers, which sparked expectation that diesel price hike too would be around the corner.

On the global front, European shares bounced higher, after previous session’s slump, as improvement in Chinese manufacturing data prompted some investors to return back to the market. Meanwhile, Asian pacific shares exhibited mixed trend in light of concerns that the weight of euro-zone sovereign debt would force Spain to seek a full state bailout. Investors were also trading cautiously after ratings agency Moody's downgraded its outlook for Germany, delivering a stark warning that not even Europe's largest and most pivotal economy was immune from the undulating crisis.

Closer home, benchmark 30 share index, Sensex, adding close to 50 points was appearing to be increasingly close of 17000 psychological level, while the 50 share index, Nifty, on NSE gaining over a marginal 15 points, was away from its 5150 bastion. The broader indices, meanwhile, managed to sustain the uptrend.  The uptrend of the bourses was supported mainly from the stocks belonging from the fast moving consumer goods, consumer durable and metal counters, however, stocks from capital goods, Information Technology and Technology counters, curbed the upside the bourses.

The BSE Sensex, after putting on 47.39 points or 0.28% was trading at 16,924.74. The index touched a high and a low level of 16,953.94 and 16,884.32 respectively. There were 14 stocks advancing against 16 declines on the index.

The broader indices continued to trade with traction; the BSE Mid cap and Small cap indices were trading with gains of 0.23% and 0.17% respectively.

The top gainers on BSE sectoral space were, FMCG up by 1.83%, CD up by 0.90%, Metal up by 0.52%, oil & Gas up by 0.50% and Bankex up by 0.42%, while CG down by 0.71%, IT down by 0.56%, TECk down by 0.51%, HC down by 0.10%, and Auto down by 0.06% were the top losers on the index.

Hindustan Unilever up by 5.94%, Sterlite Industries up by 3.06%, Maruti Suzuki up by 1.71%, Jindal Steel up by 1.33% and ITC up by 1.02% were top gainers on the Sensex, while Wipro down by 2.55%, BHEL down by 1.50%, Sun Pharmaceuticals down by 1.26%, Hero Moto Corp down by 0.87% and L&T down by 0.84% were the major losers in the index.

Meanwhile, after two rounds of rate cuts last month, State-run fuel retailers have hiked petrol prices by 70 paise per litre, with effect from July 23 midnight. The marginal rate hike, which is in line with firming international oil rates, comes on the heels of UPA candidate and former finance minister Pranab Mukherjee wining the presidential poll and also after two successive reductions last month -- Rs 2.02 per litre on June 3 and Rs 2.46 a litre on June 29.

As a consequence of the upward revision, the hike in selling price of petrol shall vary from Rs 0.70/litre to Rs 0.91/litre depending upon the state taxes. Petrol in Delhi will cost Rs 68.48 per litre with effect from midnight tonight as compared to Rs 67.78 a litre now.

Latest increase in the price of petrol is triggered by the twin factors of crude and petrol prices rising substantially in global bulk markets as well as a further depreciation in the rupee's value against the dollar. Average price of Indian basket of crude is $101.28 per barrel while international petrol price is $111.59 a barrel. The Rupee-dollar exchange rate is around Rs 55.76 to a dollar.

Currently, PSU oil firms are losing Rs 10.01 per litre on diesel, Rs 27.20/litre on kerosene and Rs 319/cylinder on LPG.  This revision, however, strengthens the expectation of diesel price hike being around the corner, with the decision timing remaining in uncertainty.

The S&P CNX Nifty is currently trading at 5,132.85, up by 14.90 points or 0.29% after trading as high as 5,139.40 and as low as 5,116.75. There were 29 stocks advancing against 21 declines on the index.

The top gainers on the Nifty were Hindustan Unilever up by 5.88%, Sterlite Industries up by 2.96%, Powergrid up by 2.01%, Reliance Infrastructure up by 1.64% and Maruti Suzuki up by 1.63%. While, Wipro down by 2.58%, SAIL down by 2.03%, BHEL down by 1.32%, Sun Pharmaceuticals down by 1.24% and L&T down by 1.16% were the major losers on the index.

Asian equity indices continue to exhibit mixed trend; KLSE Composite decline 0.29%, Jakarta Composite slid 0.23%, Nikkei 225 lost 0.24%, Taiwan Weighted skid 0.29% and Hang Seng index lost 0.05%, while Shanghai Composite gained 0.21%, Kospi Composite Index rose 0.25% and Straits Times added 0.64% were gainers on indices.   

After starting positive, European markets were now showcasing mixed trend; France’s CAC 40 gained 0.31%, Germany’s DAX lost 0.22% and the United Kingdom’s FTSE100 was trading flat with loss of around 0.01%.