Benchmarks hold early gains; Oil & Gas, Power lead

Indian benchmarks- Sensex, Nifty were trading over 0.5% higher in the late morning session on fresh buying and a firm trend in the Asian region. On the global front, all the Asian counters were trading in the green at this point of time Japanese market once again taking the lead as yen continued its slide against the US dollar and weak economic data triggered hopes of some stimulus from central bank. Back home, the traders were seen piling up position in Oil & Gas, Power and PSU sector. Shares of public sector oil marketing companies such as BPCL, HPCL and Indian Oil Corporation were trading in green on report that the petroleum ministry has proposed a gradual rise in diesel prices, by Rs 1 a litre every month over a 10-month period. Union Bank of India gained after the board has approved raising equity capital of bank through preferential allotment/qualified institutional placements/rights issue of shares . L&T soared after the company stated it has secured an offshore contract worth Rs 781 crore from ONGC for 3 wellhead platforms. Cholamandalam Investment and Finance Company surged after the company has that stated its board approved fund raising upto Rs 300 crore through private placement and qualified institutional placement of shares.

The NSE Nifty and BSE Sensex were managing to hold their psychological 5,900 and 19400 levels respectively. The market breadth on BSE was positive, in the ratio of 1472:647.

The BSE Sensex is currently trading at 19430.07 up by 106.27 points or 0.55% after trading in a range of 19445.04 and 19346.07. There were 22 stocks advancing against 8 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.70% and Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.41%, Power up by 1.03%, PSU up by 0.93%, IT up by 0.88% and Metal up by 0.87% while, there were no losers in the space.

The top gainers on the Sensex were ONGC up by 2.29%, Hindalco Industries up by 2.22%, Maruti Suzuki up by 1.83%, Hero MotoCorp up by 1.67%, and Sterlite Industries up by 1.40%.

On the flip side, Bharti Airtel was down by 0.69%, SBI was down by 0.32%, Coal India was down by 0.21%, Sun Pharma was down by 0.14%, ITC was down by 0.10% and were the top losers on the Sensex.

Meanwhile, inaugurating the 57th meeting of National Development Council (NDC), Prime Minister Manmohan Singh hinted at tough decisions such as raising energy prices and cut in subsidies to achieve the 8 per cent growth target in the 12th Five-Year Plan. The NDC, which comprises Cabinet Ministers and state Chief Ministers, meeting was held to approve the 12th Plan (2012-17) document.

The Planning Commission for the second time proposed reduction in the average annual growth target for the 12th Plan from 9 per cent to 8.2 per cent and now to 8 per cent. According to Singh, “Coal, petroleum products and natural gas are all priced below international prices and also electricity is effectively underpriced, especially for some consumers; immediate adjustment of prices to close the gap is not feasible, but some phased price adjustment is necessary. Further, PM added that Central Government and the States must work together to create awareness in the public that we must limit the extent of energy subsidies.

Talking about overall subsidies, the Prime Minister said that some subsidies are a normal part of any socially just system, but subsidies should be well designed and effectively targeted and the total volume must be kept within limit of fiscal sustainability. However, limiting subsidies is one of the efforts to make available resources for more productive usages. Explaining this, Singh focused on generating revenues to finance programmes of inclusiveness.

Singh added that there is also a need to bring down the demand of petroleum products as country is a net importer of this critical energy resource. India imports over 75 per cent of its crude oil requirement.

The S&P CNX Nifty is currently trading at 5,904.50 up by 34.40 points or 0.59% after trading in a range of 5,909.75 and 5,881.80. There were 43 stocks advancing against 6 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were BPCL up by 4.35%, ONGC up by 2.43%, Hindalco Industries up by 2.34%, Ambuja Cement up by 1.85% and Maruti up by 1.84%.

On the flip side, Bharti Airtel down by 0.58%, Axis Bank down by 0.36%,SBI down by 0.29%, HDFC Bank down by 0.18%, Dr Reddy’s down by 0.12% and were the major losers on the index.

All Asian equity indices were trading in the green; Shanghai Composite rose 7.24 points or 0.33% to 2,213.13, Hang Seng added 21.95 points or 0.10% to 22,641.73, Jakarta Composite surged 29.76 points or 0.70% to 4,31162, KLSE Composite jumped 5.74 points or 0.34% to 1,679.90, Nikkei 225 soared 80.83 points or 0.79% to 10,396.88, Straits Times moved up 0.22 points or 0.01% to 3,184.35, KOSPI Composite increased 11.76 points or 0.59% to 1,997.74 and Taiwan Weighted was up by 34.42 points or 0.45% to 7,682.29.