Markets repeat last session’s trend; reverses gain after a positive start

Indian markets extending their upmove of last session made a positive start, though they lost their gains soon ahead of the vote in Rajya Sabha on FDI in multi brand retail, which is scheduled in the evening. Initially there was all calm on the street with the government garnering the numbers with the help of Bahujan Samaj Party votes. The global cues too remained supportive as the US markets ended in green overnight ahead of the monthly jobs data, while most of the Asian peers were trading in green. The rate sensitive's are not much encouraged with Reserve Bank of India Governor D Subbarao, hinting at easy monetary regime in the coming days, citing steep moderation in growth and expressing optimism that inflation would cool off from the next quarter. The IT sector still remains in somber mood despite the IT industry body NASSCOM saying that the fall in tech stocks was no reflection of the industry’s future. On the other hand, auto sector is seeing some demand improvement on the bourses after they threatened to go for annual price hike.

The BSE Sensex opened at 19,514.88; about 30 points higher compared to its previous closing of 19,486.80 and has touched a high and a low of 19,561.87 and 19,458.08 respectively. The index is currently trading at 19,483.17, down by 3.63 points or 0.02%. There were 15 stocks advancing against 15 declines on the index.

The market breadth on the BSE was in favour of advances; there were 1,141 shares on the gaining side against 739 shares on the losing side while 88 shares remain unchanged. The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 0.43%, while Small cap index gained 0.53%.

The top gaining sectoral indices on the BSE were Auto up by 1.24%, Consumer Durables up by 0.42%, Capital Goods up 0.41%, Power was up by 0.32% and PSU was up by 0.26%, while IT down by 0.55%, FMCG down by 0.41%, TECk down by 0.27%, Healthcare down by 0.17% and Bankex down by 0.07% were the major losers on the BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.81%, BHEL up by 2.05%, 1.89%, M&M up by 1.08% and Tata Power was up by 0.83%.

On the flip side, HUL down by 0.83%, Infosys down by 0.68%, Sterlite Inds down by 0.65%, Dr Reddy’s down by 0.59% and ITC down by 0.56% were the top losers on the Sensex.

Meanwhile, in a move to improve the financial health of power distribution companies (Discoms), the Power Ministry is working on the State Electricity Distribution Responsibility Bill that would prescribe guidelines to make states responsible for introducing new power sector reforms.

Power Secretary P Uma Shankar while addressing an industry seminar organized by ASSOCHAM said, the proposed Bill is part of the distribution utilities’ restructuring package, which the government has floated for re-structuring the sick distributing power companies to improve their financial health and would be sent to the states for enactment. By adding further he said to mandate compliance of the provisions of the financial restructuring package the States would enact the legislation within 12 months from the date of circulation of model legislation.

On the mandatory conditions of the package, Shankar said 50% of the short term outstanding liabilities up to March 31, 2012 would be taken over by the state governments, which will be first converted into bonds to be issued by distributing companies to participating lenders, duly backed by the state government's guarantee. The scheme will be effective as soon as notified and will remain open up to December 31, 2012 unless extended by the government. The state governments will also take over the liability from power distributing companies in the next 2-5 years by way of special securities and repayment and interest payment.

By adding further, he expressed his views on widening gap between demand and supply of domestic coal, forcing power companies to import coal. He added that, coal-based power generation capacity has increased by 52%, while domestic coal production has seen 17% growth between 2009 and 2012. 

The S&P CNX Nifty opened at 5,934.00; about 3 points higher from its previous closing of 5,930.90, and has touched a high and a low of 5,949.85 and 5,918.10 respectively. The index is currently trading at 5,924.45, down by 6.45 points or 0.11%. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 2.70%, BHEL up by 1.74%, Tata Motors up by 1.57%, M&M up by 1.18% and BoB was up by 8.70%.

On the flip side, Grasim down by 1.12%, HUL down by 1.00%, Power Grid down by 0.96%, Sesa Goa down by 0.91% and Infosys down by 0.90% were the top losers on the Nifty.

Asian markets were still mostly in green, Shanghai Composite was up by 1.21%, Hang Seng gained 0.20%, Nikkei 225 was marginally up by 0.02%, Straits Times was up 0.88%, Seoul Composite was up by 0.31% and Taiwan Weighted was trading higher by 0.14%.

On the other hand, Jakarta Composite was down by 0.25% and KLSE Composite was tad lower by 0.03%.