Indian equities add gains to trade in green

Indian equities trimmed losses to continue its firm trade in green gyrating near the highest point of the day in the late afternoon session. The market remained in downbeat mood since the start of the trade with the 50-unit S&P CNX Nifty hitting four and half week low while the barometer index, BSE Sensex, touching its lowest level in over four weeks, mainly on account of P Chidambaram's Vijay Kelkar Panel, which submitted fiscal report, underscoring that in worst case scenario, without any action on subsidies, fiscal deficit could balloon up to 6.1 percent of GDP in the current year. Lately, buying crept in as investors started accumulating fundamental beaten down front line counters taking the benchmark index above neutral line. Traders were seen piling up position in Realty, Consumer Durables and Oil & Gas sector while selling was witnessed in Health Care sector. Investors have now started eyeing on advance tax data for the second installment due on September 15, 2012 which could provide further cues on the likely corporate earnings for Q2 September 2012 thereby determining the market directions. In the scrip specific development, Blue Dart Express slipped after the company stated that its foreign promoter in order to comply with minimum public shareholding requirements is planning to trims their stake in the company. Deccan Chronicle Holdings is locked at the upper circuit limit of 5% on stake sale buzz of Deccan Chargers.

On the global front, the Asian markets were trading in red barring Taiwan Weighted while the European markets were trading on pessimistic note. Moody's Investors Service downgraded European Union's rating outlook to ‘negative’ and has also warned that it might downgrade the bloc if it decides to cut the ratings on the European Union’s four biggest budget backers: Germany, France, UK and Netherlands. The European Central Bank (ECB) will hold its monthly policy meeting on euro area interest rates on September 06, 2012. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,250 and 17,400 levels respectively. The market breadth on BSE was positive in the ratio of 1327:1246 while 156 scrips remain unchanged.

The BSE Sensex is currently trading at 17,417.08, up by 32.68 points or 0.19% after touching a high of 17428.26 and low of 17,308.27. There were 19 stocks advancing against 10 declines while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.20% and 0.08% respectively.

The top gainers on the BSE sectoral space were, Realty up by 0.96%, Consumer Durables up by 0.94%, Oil & Gas up by 0.77%, Auto up by 0.50% and Power up by 0.49%. While Health Care down by 0.05% was the sole loser on the index.

The top gainers on the Sensex were Gail India up by 1.80%, Tata Steel up by 1.65%, Reliance Industries up by 1.41%, Jindal Steel up by 1.34% and SBI up by 1.21%. On the flip side, Tata Power down by 1.59%, Cipla down by 1.27%, HDFC down by 1.25%, ONGC down by 0.86% and Sun Pharma down by 0.72% were the top losers on the Sensex.

Meanwhile, with the continuing logjam in parliament and BJP's apparent climb down, Prime Minister Manmohan Singh has made it clear that no immediate cancellation of the coal block allocations will be made till the inter-ministerial group submits its report on the issue. The PM also pointed out that he is ready to fight with the opposition on the issue, mean while appealed to them to allow Parliament to function.

The centre has taken this stand to avoid sending the wrong signal internationally, as it would scare away investors who would perceive India as an unreliable destination. At the same time it would open the government to litigation since many of the genuine allottees would be well within their rights to go to courts for relief in the event if the cancellations were made without proper review and investigation.

The Inter-Ministerial Group (IMG) has already been in touch with many of the allottees and had sent them show cause notices in April itself when the Comptroller and Auditor General draft report was ready and government knew that the trouble was brewing. All the coal blocks given from 2004 to 2009 were reviewed and 58 were given show cause notices and they are being reviewed now. However, 26 blocks were de-allocated in 2010 itself.

The S&P CNX Nifty is currently trading at 5268.60, up by 14.85 points or 0.28% after trading in a range of 5,269.75 and 5,233.20. There were 31 stocks advancing against 16 declines on the index, while 3 stocks remained unchanged.

The top gainers of the Nifty were JP Associates up by 2.18%, Power Grid up by 2.02% Gail India up by 2.02%, DLF up by 1.88% and Tata Steel up by 1.82%. On the flip side, IDFC down by 2.05%, HDFC down by 1.52%, Tata Power down by 1.49%, Ambuja Cement down by 1.48% and Cipla down by 1.25% were the major losers on the index.

Most of the Asian indices were mostly trading in red; Nikkei 225 declined 0.10%, Hang Seng index slid 0.66%, Shanghai Composite descended 0.75%, Kospi Composite Index shed 0.29%, KLSE Composite lost 0.02%, Straits Times inched down by 0.05% and Jakarta Composite surrendered 0.21%, while Taiwan Weighted inched up by 0.01% was the sole gainers.

The European markets were trading in red with, France’s CAC 40 descending 0.26%, Germany’s DAX dropped 0.15% and the United Kingdom’s FTSE 100 lost 0.51%.