Indian equities trim gains; Nifty above 5,650 mark

Indian equities trim gains but continue to trade firm in the late afternoon session on back of buying in frontline counters and taking cues from subdued European counterparts. The hopes that central bank will respond with a 25 bps rate cut or a cash reserve ratio cut to complement the government’s reform moves has given a shot of adrenaline to the stocks of rate sensitive’s counters. Traders were seen piling position in Realty, Bankex and Capital Goods sector while selling was witnessed in Health Care sector. Telecom stocks were under pressure after the Telecom Commission recommended mobile phone carriers to give up their entire airwave holding in the 900 mega hertz band at the time of their permit renewals. Several media shares were seen trading firm on renewed buying ahead of the October 31, 2012 deadline for cable TV digitization in four metro cities of Delhi, Mumbai, Kolkata and Chennai.

In the scrip specific development, TTK Prestige is trading under pressure after the rating agency CRISIL lowered the fair value to Rs 2,800. United Breweries, part of liquor baron Vijay Mallya-led UB Group, was trading in red after the foreign research firm UBS downgraded the stock to sell. Kingfisher Airline is locked in lower circuit limit after the company’s meeting with the striking employees failed to resolve the deadlock over unpaid salaries. On the global front, Asian markets were trading in green while the European markets were trading on a mixed note. German Chancellor Angela Merkel reiterated that Greece must remain part of the euro zone. However, German economy ministry lowered Germany’s outlook for growth next year to 1% from 1.6%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,650 and 18,700 levels respectively. The market breadth on BSE was positive in the ratio of 1594:1092 while 134 scrips remain unchanged.

The BSE Sensex is currently trading at 18,722.71, up by 111.94 points or 0.60% after trading in a range of 18,760.81 and 18,576.41. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.89% and 0.61% respectively.

The top gainers on the BSE sectoral space were, Realty up by 1.58%, Bankex up by 1.49%, Capital Goods up by 1.07%, Power up by 1.03% and Auto up by 1.01% while Health Care down by 0.36% was the sole loser on the index.

The major gainers on the Sensex were Tata Power up by 2.70%, SBI up by 1.88%, Tata Motors up by 1.87%, Hero MotoCorp up by 1.63%, and L&T up by 1.43%. On the other hand, Sun Pharma down by 1.67%, Bharti Airtel down by 1.54%, Wipro down by 0.93%, Gail India down by 0.46% and ONGC down by 0.36% were the major losers on the Sensex.   

Meanwhile, with the alarming position of current account deficit, Finance Minister P Chidambaram has indicated for a rational and transparent energy pricing mechanism and correction of distortion in petrol and diesel prices caused due to unequal taxation, so as to protect the interest of poor and vulnerable sections of the society. He pointed out that the current level of subsidy on petroleum products is not conducive for economic policy decisions, as the rising subsidy bill has hiked the Government’s fiscal deficit.

He blamed the tighter global product market, peaking commodity prices, growing demand and slowing global financial growth, for the tough situation concerning welfare of citizens and acting as a major challenge for the policy makers. He also urged that the oil producing countries must exploit and sell at reasonable price to those who do not have less or resource for easing the stringent situation. He affirmed that the burgeoning subsidy bill is experienced not only in India but all developing countries are facing the situation.

The oil companies which had recorded loss in the first quarter are preparing to announce financial results for the second quarter, June-September without any compensation from the Government on account of selling diesel, domestic LPG and PDS kerosene below the cost price. India imports about 75% of its crude oil requirement.

The S&P CNX Nifty is currently trading at 5,698.40, up by 38.15 points or 0.67% after trading in a range of 5,708.30 and 5,650.55. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were JP Associates up by 4.56%, Axis Bank up by 3.67%, Bank of Baroda up by 2.80%, Tata Power up by 2.60% and Reliance Infrastructure up by 2.12%. While, Bharti Airtel down by 1.63%, Sun Pharma down by 1.62%, Ranbaxy down by 0.84%, Grasim down by 0.74%  and Wipro down by 0.62% were top losers on the index

Asian equity indices continued to trade in fine fettle; Kospi Composite gained 0.20%, Shanghai Composite surged 1.24%, Hang Seng added 0.48%, Jakarta Composite advanced 0.36%, KLSE Composite rose 0.20%, Nikkei 225 soared by 2.00%, Taiwan Weighted inched higher by 0.01% and Straits Times accumulated 0.42%.

The European markets were trading on a mixed note, France’s CAC 40 dropped 0.17%, Germany’s DAX ascended 0.10% and the United Kingdom’s FTSE 100 jumped 0.13%.