Indian equities continue firm trade; Nifty above 5,700 mark

Indian equities added gains to continue firm trade in the late afternoon session on the back of buying in frontline counters and taking cues from European counterparts. Investors have started eyeing Reserve Bank of India's (RBI) Second Quarter Review of Monetary Policy - 2012-13 which is scheduled on October 30, 2012, and will provide further direction to the market. The market may remain volatile today i.e. October 25, 2012, as traders may roll over positions in the F&O segment from the near month October 2012 series to next month November 2012 series. The near-month October 2012 derivatives contract expires today i.e. October 25, 2012. Traders were seen piling some position in Oil & Gas, Capital Goods and Bankex sector while selling was witnessed in Realty, Consumer Durable and FMCG sector. In the scrip specific development, IRB Infrastructure Developers was trading in red for the fourth consecutive session due to the alleged business linkages and cases of financial impropriety with BJP President Nitin Gadkari. Kingfisher Airlines was locked in upper circuit limit on hopes that striking workers will return to work after the debt-ridden carrier offered this week to pay three months of wages by November 13.

On the global front, Asian markets were trading mixed, while the European markets were trading on optimistic note. The European authorities are pushing Bankia (BKIA) group to impose losses on junior debt holders as part of Spain’s bank bailout by swapping their securities for stock in the nationalized lender. Separately, the euro zone downturn deepened at start of fourth quarter as PMI hit 40-month low, a survey by Markit Economics showed. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,700 and 18,700 levels respectively. The market breadth on BSE was negative in the ratio of 1191:1502 while 124 scrips remain unchanged.

The BSE Sensex is currently trading at 18,763.70, up by 53.68 points or 0.29%. The index touched a high and low of 18,783.46 and 18,699.07 respectively. There were 17 stocks advancing against 13 declines on the index.

The broader indices continued to trade in red; the BSE Mid cap index was down by 0.07%, while the Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Oil and Gas up by 0.51%, Capital Goods up by 0.25%, Bankex up by 0.24%, IT up by 0.16% and Auto up by 0.15%. On the other hand, Realty down by 2.05%, Consumer Durable down by 0.20%, FMCG down by 0.14%, Health Care down by 0.07% and TECk down by 0.05% were the top losers on the BSE sectoral space.

The top gainers on the Sensex were HDFC up by 1.81%, Hero MotoCorp up by 1.67%, Sterlite Industries up by 1.63%, M&M up by 1.15% and NTPC up by 1.15%. On the flip side, Jindal Steel down by 1.59%, Dr. Reddy’s Lab down by 1.19%, Maruti Suzuki down by 1.18%, Tata Motors down by 1.06% and HUL down by 0.95% were the top losers on the Sensex.

Meanwhile, with the continued efforts for the ceiling of Maximum Retail Price (MRP) for 348 essential medicines, the Department of Pharmaceuticals (DoP) has approached the legal affairs department under the Ministry of Law and Justice for taking legal opinion on interim order of the Supreme Court, which urged the government not to alter the current price mechanism for essential medicines.

DoP has sought the law ministry’s opinion about the legal provisions on apex court issuing directives to the government for following a particular methodology for pricing mechanism of essential medicines. The Supreme Court, with a view to avoid possibility of sharp rise in drug prices had recommended the centre to stick with the old pricing formula, which determines the price of the medicine by adding profit margin with the manufacturing cost.

The court’s directive came after the Group of Ministers, chaired by the Agriculture Minister Sharad Pawar approved the new pharmaceutical pricing policy to fix the retail price of 348 essential drugs  in the National List of Essential Medicines (NLEM) by calculating weighted average price of all brands in a segment that has more than 1 percent market share.

The S&P CNX Nifty, after trading in range of 5,712.20 and 5,685.70, is currently trading at 5,705.95, up by 14.55 points or 0.26%. There were 26 stocks advancing against 23 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Lupin up by 2.50%, HDFC up by 1.91%, Hero MotoCorp up by 1.72%, HCL Tech up by 1.57% and Axis Bank up by 1.57%.

On the flip side, Bank of Baroda down by 1.81%, PNB down by 1.72%, Jindal Steel down by 1.52%, DLF down by 1.29% and Dr Reddy down by 1.26% were the major losers on the index.

Most of the Asian equity indices continued to trade in positive terrain; Hang Seng ascended 0.21%, KLSE Composite added 0.13%, Nikkei 225 surged by 1.13%, Straits Times was higher by 0.40% and Kospi gained by 0.55%. On the other hand, Taiwan Weighted was down by 0.72%, Shanghai Composite edged lower by 0.68% and Jakarta Composite lost 0.21%.

The European markets were trading in green with, France’s CAC 40 added 0.69%, Germany’s DAX ascended 0.65% and the United Kingdom’s FTSE 100 jumped 0.48%.