Firm trade prevails; Nifty above 5,550 mark

Indian equities added gains to continue its firm trade in green in the late afternoon session celebrating Federal Reserve’s decision of third round of quantitative easing. The optimism in the market is so strong that investors paid no heed towards the release of shockingly higher August month’s WPI data. Also, a steep hike of Rs 5 per liter on heavily subsidized diesel by the Cabinet Committee on Political Affairs yesterday in an attempt to bring down the burgeoning fiscal deficit added sanguinity in the market. Meanwhile, the advance tax data for the second installment, which is due tomorrow i.e. September 15, 2012, could provide cues on the likely corporate earnings for Q2 September 2012, which may provide further direction for the market. Traders were seen piling up position in Realty, Metal and Bankex sector while selling was witnessed in Health Care and FMCG sector. Moreover, Aviation stocks like Jet airways, Kingfisher Airlines and SpiceJet were seen buzzing ahead of cabinet meet for deciding on FDI in the sector. In the scrip specific development, Orissa Minerals Development Company (OMDC) was trading in lower circuit limit after the board rejected bonus share issue.

On the global front, the Asian markets were trading in green while the European markets were trading on optimistic note. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,550 and 18,400 levels respectively. The market breadth on BSE was positive in the ratio of 1498:1303 while 131 scrips remain unchanged.

The BSE Sensex is currently trading at 18,431.11 up by 409.95 points or 2.27% after touching a high of 18,456.33 and low of 18,284.75. There were 25 stocks on advancing side, while 5 stocks on declining side of 30 share index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.03% and Small cap index was up by 0.80%.

The top gaining sectoral indices on the BSE were, Realty up by 4.71%, Metal up by 4.09%, Bankex up by 3.79%, Capital Goods up by 3.41% and Oil & Gas up by 2.72%. While, Health Care down by 0.85% and FMCG down by 0.48% were the only losers on the index.

The top gainers on the Sensex were Jindal Steel up by 7.66%, Hindalco Industries up by 7.45%, Sterlite Industries up by 5.25%, ICICI Bank up by 5.13% and SBI up by 5.01%. While ITC down by 0.63%, TCS down by 0.41%, Dr. Reddy’s Lab down by 0.23%, Sun Pharmaceuticals down by 0.13% and NTPC down by 0.03% remained the only losers on the Sensex.

Meanwhile, supporting government’s inevitable move of raising the fuel prices amid hefty fiscal deficit, Prime Minister's Economic Advisory Council Chairman (PMEAC) C Rangarajan has pointed out that hike in diesel price will compel the Reserve Bank to ease monetary policy to give thrust on growth, as inflation is likely to go up at least 0.4 percent in the near future.

The government has raised the diesel prices by about Rs 5 a liter and also limited the number of subsidized cooking gas cylinder to six per household a year. This move will garner an additional Rs 20,300 crore to the oil companies, who had claimed a loss of over Rs 560 crore per day on the sale of regulated diesel and cooking fuels.

CRISIL Chief Economist D K Joshi also supported government’s move, pointing out that the decision was highly necessary to reduce the financial burden of the nation, though will ignite inflation, there will be good impact on the economy of the country. Department of Economic Affairs Secretary (DEA) Arvind Mayaram and Yes Bank’s Chief Economist Shubhada Rao also echoed similar views.

The S&P CNX Nifty is currently trading at 5,562.85, up by 127.50 points or 2.35% after trading in a range of 5,568.85 and 5,526.95. There were 41 stocks advancing against 9 declining ones on the index.

The top gainers of the Nifty were Jindal Steel up by 7.78%, Hindalco Industries up by 7.44%, DLF up by 6.46%, Axis Bank up by 6.05% and JP Associates up by 5.86%.

On the flip side, BPCL down by 1.92%, Ranbaxy Laboratories down by 1.27%, HCL Tech down by 1.21%, Power Grid down by 0.87% and ITC down by 0.78% remained the top losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite rose 0.64%, Hang Seng index spurted 2.90%, Jakarta Composite surged 1.75%, KLSE Composite advanced 0.67%, Nikkei 225 rose 1.83%, Strait Times added 1.33%, Kospi Composite Index soared higher by 2.92% and Taiwan Weighted too amassed gains of 2.10%.

The European markets were trading in green with, France’s CAC 40 ascended 1.76%, Germany’s DAX added 1.31% and the United Kingdom’s FTSE 100 jumped 1.36%.