Markets show sign of strengthening; Oil& Gas takes the lead

Markets have recovered and are trying to move higher in the late morning session, though lacking any major thrust the movement is still range bound. There was some recovery in the regional peers but the mood remained cautious in the local markets ahead of the October F&O series expiry. There was some buzz in the PSU stocks after Prime Minister Manmohan Singh in its meeting with the top 25 PSU heads, urged them to invest and grow, and set the pace for India's growth in the process. Most of the PSU companies are trading with good gain. However, there is somberness in the realty stocks, which are the laggards of the trade, as the rate cut by the Reserve Bank of India seems unlikely in its upcoming policy review next week.

The BSE Sensex is currently trading at 18765.55, up by 55.53 points or 0.30%. There were 21 stocks advancing against 9 declines on the index.

The broader indices have given up their gains and were trading mixed; the BSE Mid cap index was down by 0.02%, while the Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Oil and Gas up by 0.66%, Metal up by 0.60%, Auto up by 0.32%, Bankex up by 0.22% and PSU up by 0.14%, on the other hand Realty down by 0.33%, CD down by 0.28%, CG down by 0.11%, HC down by 0.08% and TECk was down by 0.07% on the BSE.

The top gainers on the Sensex were Sterlite Industries up by 3.00%, ONGC up by 1.12, M&M up by 1.11%, HDFC up by 1.02%, Hero MotoCorp up by 0.99%. On the flip side, Dr Reddy’s down by 0.99%, Sun Pharma down by 0.85%, Maruti Suzuki down by 0.77%, Infosys down by 0.61% and SBI down by 0.44% were the top losers on the Sensex.

Meanwhile, in the backdrop of Sahara like cases hitting the headlines, the stock market regulator SEBI has asked government to chalk out a strong central legislation to take on companies garnering lump sum from the public without basic regulatory approvals and for doubtful investment projects.

“People make all sorts of excuses - in some cases they claim they are under the state government, some cases they are saying they are registered with the Ministry of Corporate Affairs, some cases they are saying they are housing companies and in some cases they claim to be NBFCs. And in most cases, they say that we are not under the Sebi jurisdiction,” said U K Sinha, SEBI Chairman. The existing legal provisions are faulty and easily permit such companies to gain from certain loopholes in the regulatory structure.

Sebi (Securities and Exchange Board of India) is entrusted with the responsibility to protect the interest of investors in securities market and also regulate and promote various investment products in the capital markets, including the public listed companies. Also, raising of funds from 50 or more public investors by any unlisted entity comes under Sebi’s jurisdiction - a regulatory position which recently came to light in the high-profile case involving Sahara group.

The S&P CNX Nifty is currently trading at 5,705.00, up by 13.60 points or 0.24%. There were 28 stocks advancing against 21 declines, while one stock remained unchanged on the index.

The top gainers of the Nifty were Lupin up by 2.16%, Sesa Goa up by 1.77%, UltraTech Cement up by 1.16%, HDFC up by 1.13%, and Axis Bank was up by 1.10%. On the flip side, PNB down by 1.33%, Dr Reddy’s down by 0.85%, ACC down by 0.80%, Asian Paints down by 0.79% and Reliance Infra down by 0.74% were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite was down by 0.35% and Taiwan Weighted was down by 0.72%.

On the other hand, Hang Seng was up by 0.01%, KLSE Composite was up by 0.08%, Jakarta Composite gained 0.01%, Nikkei 225 surged by 0.97%, Straits Times was higher by 0.32% and Kospi gained by 0.31%.