Firm trade persists; Nifty above 6,000 mark

Indian equities continued their firm trade in the late afternoon session on account of buying in frontline counters. At the start of the trading session, Sensex touched its highest level in almost 21 months and the 50-unit S&P CNX Nifty hit its highest level in almost two years. An Empowered Group of Ministers on telecom would be meeting again on January 07 as they had deliberated upon several issues today regarding spectrum auction due this fiscal but did not reach a final decision. Traders were seen piling some position in Oil & Gas, TECk and IT sectors while selling was witnessed in Consumer Durables, FMCG and Capital Goods sectors.

In the scrip specific movement, United Breweries was trading in red after Kotak Institutional Equities initiated coverage on the company with a sell call adding that valuations are too high. Nouveau Global Ventures is trading in green ahead of board meeting which is scheduled on January 07, 2012, where the board of directors will discuss ways and means for raising fund up to Rs 100 crore in equity or debt for the business expansion. JSW Steel is trading firm as the company has hiked all steel product prices from January 01. Shares of gold loan firms Manappuram Finance and Muthoot Finance edged higher which was triggered by the Rao Committee recommendations that non-banking finance companies be allowed to lend 75% against the value of the gold pledged, as against 60% at present. Infosys is trading in green as the foreign research firm Bank of America Merrill Lynch recommended a buy rating on the stock.

On the global front, Asian markets were trading in green barring KOSPI Composite, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,000 and 19,700 levels respectively. The market breadth on BSE was positive in the ratio of 1641:1210 while 109 scrips remain unchanged.

The BSE Sensex is currently trading at 19,748.82 up by 34.58 points or 0.18% after trading in a range of 19,786.30 and 19,693.29. There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.74% and Small cap index was up by 0.87%.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 0.97%, TECk up by 0.89%, IT up by 0.74%, PSU up by 0.34% and Realty up by 0.29%. While, Consumer Durables down by 0.42%, FMCG down by 0.41%, Capital Goods down by 0.31% and Power down by 0.09% were the only losers on the index.

The top gainers on the Sensex were Dr Reddy’s Lab up by 2.51%, RIL up by 1.27%, SBI up by 1.14%, Bharti Airtel up by 1.14% and Sterlite Industries up by 0.91%.

On the flip side, Tata Power was down by 1.21%, Sun Pharma was down by 1.06%, Hindalco Industries was down by 0.93%, Maruti Suzuki was down by 0.87% and L&T was down by 0.81% were the top losers on the Sensex.

Meanwhile, in order to trim down food and fertilizer subsidies, which could rise to Rs 200,000 crore next fiscal, the government's advisory body on farm prices Commission for Agriculture Costs and Prices (CACP) in its pre-budget consultations with Finance Minister P Chidambaram, has recommended direct cash transfer to beneficiaries in order to rationalize food and fertilizer subsidies. It has also asked for stable export policy for farm commodities and promotion of palm oil to cut vegetable oil imports, which was at a record 10 million tonnes (worth Rs 60,000 crore) in 2011-12.

The advisory body also demanded deregulation of urea sector to attract more investment and improve balanced use of fertilizers. Moreover, CACP added that higher farm exports and reduction in edible oil imports would help centre to curb current account deficit.

After the pre-budget meeting, CACP Chairman Ashok Gulati said 'rising current account deficit is the biggest problem that the government currently facing. So, we have pitched for rationalization of food and fertiliser subsidies in the forthcoming Budget'.By adding further he said, the government can save Rs 50,000 crore by plugging the leakages through conditional cash transfer (CCT) and also save additional Rs 10,000-15,000 crore from storage cost of grains. He also pointed that 40 per cent of food distributed through shops get diverted.

Further, CCT can be implemented initially in 33 cities of more than one million population and then expand to cereal surplus states and finally to cereal deficit states. On fertilizers, CACP chief said that the government can save Rs 20,000 crore if it immediately starts direct cash transfer of subsidy to farmers. For the 2012-13 fiscal, the Budget allocation for food and fertiliser subsidies was 136,000 crore, which is expected to rise in the revised Budget estimate.

The S&P CNX Nifty is currently trading at 6,002.45 up by 9.20 points or 0.15% after trading in a range of 6,017.00 and 5,986.55. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were Dr Reddy’s Lab up by 2.57%, Cairn India up by 2.00%, Ambuja Cements up by 1.27%, Bharti Airtel up by 1.26% and Reliance Industries up 1.21%.

On the flip side, Tata Power down by 1.61%, Sun Pharma down by 1.23%, Lupin down by 0.96%, Hindalco Industries down by 0.93% and Punjab National Bank down by 0.91% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Jakarta Composite surged 0.95%, KLSE Composite increased 0.88%, Straits Times added 0.55%, Hang Seng up by 0.37% and Taiwan Weighted was up by 0.74%. On the flip side, KOSPI Composite was down by 0.58%.

Markets in Japan and China remained shut for public holidays and will reopen on Friday.

The European markets were trading in red with, France’s CAC 40 lost 0.40%, Germany’s DAX descended 0.19% while the United Kingdom’s FTSE 100 lost 0.09%.