Domestic bourses trade with traction; Sensex re-conquers 18,700 mark

Indian benchmarks have made a decent start with Sensex recapturing its crucial 18,700 level in early trade as the Government continues to take measures aimed at restoring business confidence in a slowing economy. Market-men cheered the government’s approval for a bailout of cash-strapped power distributors.  Power stocks remained on the buyers radar after the Cabinet Committee on Economic Affairs (CCEA) approved the package, which would restructure the debt of distribution companies by asking state governments to take over half of their short-term debt, with the remaining to be rescheduled by lenders. The Rs 1.9-lakh crore debt restructuring for power distribution companies, is the second such move in less than a decade. The move is also likely to benefit private power producers, who in the absence of payments, were operating below capacity and were facing difficulties in paying their installments to lenders.

Market also got some support from Prime Minister’s Economic Advisory Council Chairman C. Rangarajan’s statement that Indian economy’s growth rate would pick up in the second half of this fiscal and will touch 6.7 per cent for 2012-13. On the sectoral front, capital goods witnessed the maximum gain in trade followed by power, PSU, FMCG and realty while, technology and software remained the only losers on the BSE sectoral space. Moreover, the broader indices were out performing benchmarks. The market breadth on the BSE was positive; there were 1,066 shares on the gaining side against 497 shares on the losing side while 55 shares remain unchanged.

However, global cues remained unsupportive as the US stocks edged lower overnight as a disappointing forecast from Caterpillar and weak German data increased concerns that global growth may remain sluggish. An index of German business sentiment declined for a fifth consecutive month in September, showing Europe's strongest economy was moving closer towards recession as the euro zone’s debt crisis remains unresolved while, Asian counters were trading mixed at this point of time.

The BSE Sensex opened at 18,708.01; about 35 points higher compared to its previous closing of 18,673.34, and has touched a high of 18,790.01 while low remain its opening.

The index is currently trading at 18,731.64, up by 58.30 points or 0.31%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a positive start with 65.88% stocks advancing against 30.72% declines. The broader indices too were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.42% and 0.65% respectively.

The top gaining sectoral indices on the BSE were CG up by 1.54%, Power up by 1.50%, PSU up by 0.67%, FMCG up by 0.54% and Realty up by 0.51%. While, TECk down by 0.24% and IT down by 0.19% remained the only losers on the index.

The top gainers on the Sensex were BHEL up by 2.35%, Cipla up by 1.77%, HDFC up by 1.67%, Tata Power up by 1.60% and NTPC up by 1.53%.

On the flip side, Jindal Steel was down by 2.13%, Bharti Airtel was down by 1.53%, HDFC Bank was down by 0.73%, ONGC was down by 0.71% and Tata Steel was down by 0.45% were the top losers on the Sensex.

Meanwhile, with an aim to meet the gap between high demand and peak deficit, the Planning Commission of India has targeted a power generation capacity of 88,425 MW during the 12th five year plan, 2012-17, while the commission had previously projected additional power generation capacity of 75,785 MW in the next five years.

The panel has estimated that the private sector has to share about 52% in the extra capacity, compared to the 19% in the 11th five year plan. It also affirmed the importance of developing a policy framework to trigger more investments in private sector. The 11th Plan had set a target addition of 78,577 MW capacity, but achieved about 52,000 MW capacity in the period. However, the renewable power share is declining, and this has to be enhanced to ensure low carbon growth strategy.

The commission has projected capacity addition in the non-fossil fuel plants including hydro capacity addition of 11,897 MW and nuclear capacity addition of 5,300 MW. It has considered importing of about 1,200 MW of hydro power from Bhutan. 30,000 MW grid interactive renewable capacity additions is also under consideration, constituting 15,000 MW wind, 10,000 MW solar, 2,100 small hydro and remaining from bio mass.

The S&P CNX Nifty opened at 5,674.90; about 5 points higher compared to its previous closing of 5,669.60, and has touched a high and a low of 5,702.70 and 5,674.30 respectively.

The index is currently trading at 5,689.55, down by 19.95 points or 0.35%. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were BHEL up by 2.64%, PNB up by 2.59%, Cipla up by 1.77%, Tata Power up by 1.65% and HDFC up by 1.61%.

On the flip side, Cairn down by 2.43%, Jindal Steel down by 1.71%, Bharti Airtel down by 1.56%, Reliance Infra down by 1.18% and ONGC down by 0.71% were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite was down by 8.63 points or 0.42% to 2,024.56, Hang Seng lost 26.96 points or 0.13% to 20,667.74, Kospi Composite lost 9.20 points or 0.42% to 1,994.08 and Taiwan Weighted declined by 28.82 points or 0.37% to 7,739.20.

On the other hand, Jakarta Composite was up by 9.01 points or 0.21% to 4,208.07, KLSE Composite gained 4.24 points or 0.26% to 1,617.00, Nikkei 225 added 25.99 points or 0.29% to 9,095.28, Straits Times was up by 5.80 points or 0.20% to 3,073.96.