Benchmarks hold early gains; Oil & Gas, HC lead

Indian equities continued to trade in fine fettle on back of strong buying in frontline counters in the late morning session .While, most of the Asian equity indices were trading in the red at this point of time due to corporate earnings concerns. Back home, traders were seen piling up position in, Oil & Gas, HC and Metal sector while selling was witnessed in IT, TECk and Bankex sector.RIL, ONGC, Cairn India and Indian Oil Corporation from Oil & Gas pack were seen trading in green. Sun Pharma, Dr Reddys Lab, Cipla, Lupin and Ranbaxy Lab from HC pack were seen trading firm in green. IT majors - Infosys, Oracle Financial Services Software, Mphasis, and Hexaware Technologies were capping the markets’ gains. Banking majors Kotak Mahindra Bank, Bank of Baroda, Bank of India and IDBI Bank too were pressurizing the markets.

In the scrip specific development, Escorts edged higher on launching upgraded version of Powertrac. Unichem laboratories surged on getting US FDA approval for Memantine Hydrochloride Tablets.  JSW Steel gained on reporting over 6-fold rise in Q2 net profit. PGCIL rose on getting nod for investment proposal worth Rs 100.55 crore. JSW ISPAT Steel soared on reporting stellar Q2 numbers. India Infoline jumped on reporting stellar Q2 numbers. The NSE Nifty and BSE Sensex were managing to hold their psychological 5,650 and 18600 levels. The market breadth on BSE was positive, in the ratio of 1143:834.

The BSE Sensex is currently trading at 18681.80 up by 56.46 points or 0.30% after trading in a range of 18743.41 and 18651.35. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17% and Small cap index was up by 0.35%.

On the BSE sectoral space, Oil & Gas up by 0.69%, HC up by 0.66%, Metal up by 0.64%, Auto up by 0.60%, and Power up by 0.34% were the top gainers. While, IT down by 0.22%, TECk down by 0.14% and Bankex down by 0.09% were the top losers.

The top gainers on the Sensex were Jindal Steel up by 2.04%, Mahindra & Mahindra up by 1.69%, Hindalco Industries up by 1.55%, Hero MotoCorp up by 1.41% and Dr Reddys Lab up by 1.38%. On the other hand, Sterlite Industries down by 1.09%, Infosys down by 0.62%, ICICI Bank down by 0.58%, Hindustan Unilever down by 0.54% and Tata Motors down by 0.29% were the top losers on the Sensex.   

 Meanwhile, justifying the stance of diesel price hike along with introduction of other reforms, Prime Minister’s Economic Advisory panel said that reining fiscal deficit is a key to sustain high growth in the medium term. PMEAC’s Chairman C Rangarajan underscored that the process of fiscal consolidation was important from the point of view of sustaining high growth over the medium term and that there was immense need of clear programme for containing subsidies. Additionally, he recommended that the government should rationalize the subsidies with a view of preventing wastage and helping needy.

Further, explaining the roadmap for doing so, the chairman said that, “Priorities would have to be laid down by the government in terms of the type of subsidy which is considered to be most important and then accordingly the less important one’s should be trimmed in order to ensure that overall subsidy is within the limits of what is considered to be prudent”.

Moreover, the chairman highlighted the need of loan term plan to bring down the subsidies in proportion of GDP, besides, pointing the requirement of ensuring higher tax-GDP ratio. C Rangarajan, further added that the process of fiscal consolidation should be such as to ensure that over the next 2-3 years, the Indian economy could get back to the fiscal deficit of 3 percent of GDP.

Indian economy, which has been battling worries of high fiscal deficit and declining growth momentum, has the budgeted fiscal deficit for the current fiscal at 5.1 percent of GDP. However, the qualms are that that higher subsidy outgo and lower buoyancy in revenue realization could push the figure higher than 6 percent. Yet, the Finance Ministry believes that the recent reforms initiatives would help limit the fiscal deficit at 5.3 percent in the current fiscal.

Chidambaram, after taking charge of the Finance Ministry in August, has undertaken a aggressive reform drive boost investment flow. Besides, diesel prices hike by over Rs 5 a litre, foreign investment norms were relaxed for retail, insurance, pension, information and broadcasting sectors.

The S&P CNX Nifty is currently trading at 5,681.50, up by 17.20 points or 0.30% after trading in a range of 5,698.30 and 5,663.65. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were Jindal Steel up by 2.46%, M&M up by 1.62%, Hindalco up by 1.60%, Hero Moto Co up by 1.52% and DLF was up by 1.26%. While, Bank Baroda down by 1.11%, Infosys down by 0.70%, BPCL down by 0.68%,HUL  down by 0.67% and ICICI Bank down by 0.61% were the losers on the index

Asian equity indices were trading mostly in the red; Taiwan Weighted down by 0.32%, Kospi Composite was down by 0.05%, Shanghai Composite was down by 0.05%, Jakarta Composite down by 0.10%, Straits Times was down by 0.55%, Nikkei 225 was down by 0.03% and Hang Seng was down by 0.30% while KLSE Composite up by 0.20% was the lone gainer.