Indian markets trade flat in morning deals

Indian equity benchmarks made a flat-to-positive opening with 50-share Nifty index holding key 6,000 levels in morning trades after positive US economic data fueled hopes of global growth recovery; however, gains were capped on caution ahead of third quarter earnings starting this week. Global risk appetite remained firm as US markets ended higher on January 4, 2013 supported by some good economic news from the jobs front gave investors confidence that the economy was back on track. Moreover, most of the Asian equity indices were trading in the green at this point of time; however, Japanese market was showing some profit booking after the biggest first day gain of the year.

Back home, the frontline gauges were trading cautiously as traders eyeing important events like IIP numbers and result announcements starting with IT bellwether Infosys later in the week. Though, there are not much expectations from the December quarter but some companies may surprise with better topline. Some support also came in from PSU oil marketing companies as the oil ministry moved two separate cabinet notes - one to raise cap on supply of subsidised cooking gas cylinders and the other to increase fuel prices, particularly diesel, by less than a rupee per month to pair it with market rates and eventually deregulate it in next 15 months.

On the sectoral front, auto witnessed the maximum gain in trade followed by oil and gas and PSU while, capital goods, realty and software remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 1,243 shares on the gaining side against 546 shares on the losing side while 94 shares remain unchanged.

The BSE Sensex opened at 19,820.56; about 36 points higher compared to its previous closing of 19,784.08, and has touched a high and a low of 19,856.43 and 19,782.91 respectively.

The index is currently trading at 19,795.37, up by 11.29 points or 0.06%. There were 18 stocks advancing against 11 declines and one remains unchanged on the index.

The overall market breadth has made a positive start with 66.01% stocks advancing against 29.00% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.55% and 0.69% respectively.

The top gaining sectoral indices on the BSE were, Auto up by 0.77%, Oil & Gas up by 0.75%, PSU up by 0.51%, Health Care up by 0.50% and FMCG up by 0.39% while, Capital Goods down by 0.50%, Realty down by 0.39%, IT down by 0.10%, Bankex down by 0.06% and Consumer Durables down by 0.03% were the top losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 2.33%, Mahindra & Mahindra up by 1.23%, Hero Moto Corp up by 0.90%, Wipro up by 0.87% and ITC up by 0.85%.

On the flip side, L&T was down by 0.90%, HDFC was down by 0.78%, HDFC Bank was down by 0.63%, Hindustan Unilever was down by 0.58% and BHEL was down by 0.33% were the top losers on the Sensex.

Meanwhile, the Centre has extended the ambitious debt-restructuring scheme for power distribution utilities till March-end due to the failure of the state governments to commit sovereign guarantees for bonds to be issued to lenders in lieu of loans. The deadline for availing the Rs 1.9 lakh crore bailout scheme has been deferred by three months from the original December 2012. No state has so far given in writing to the power ministry that it is interested in the scheme, neither have the state cabinets approved it, though officials of a few states such as Tamil Nadu and Jharkhand have been regularly meeting the power ministry officials and communicated their consent informally. Uttar Pradesh, among other states, has sought time for conveying its consent to the scheme.

Under the package, the state governments are required to take over half of the short-term debt of their distribution companies, which will issue long term-bonds backed by the state governments'' guarantee to the lenders. The states are supposed to buy the bonds over two-five years and service the interest payment till the takeover. The scheme envisages giving distribution companies a moratorium of three years for repaying principal of the balance 50% of the short-term loans. The precarious financial health of the power distribution companies has affected banks and financial institutions, payment to generating companies, lending electricity supply to consumers and technology upgradation of distribution network.

The bailout package mandates state governments to release subsidy to distribution companies and set up committees to monitor execution of the plan, besides taking over the bonds. The Centre might recommend that the state governments allow distribution utilities to raise funds through options such as sale of surplus land or carbon credits for meeting short-term requirements. The central government will reimburse of 25% of principal repayment made by the state governments. The power ministry has also planned to work on an arrangement for funding operational losses and interest for three years for states with huge accumulated losses such as Rajasthan, Tamil Nadu and Uttar Pradesh after due consultations with the finance ministry and state government officials.

The S&P CNX Nifty opened at 6,042.15; about 26 points higher as compared to its previous closing of 6,016.15, and has touched a high and a low of 6,042.15 and 6,012.50respectively. The index is currently trading at 6,016.50, higher by 0.35 points or 0.01%. There were 24 stocks advancing against 25 declines and one remains unchanged on the index.

The top gainers of the Nifty were Maruti Suzuki up by 2.30%, BPCL up by 2.27%, Cairn up by 1.74%, Mahindra & Mahindra up by 1.04% and Wipro up by 0.85%.

On the flip side, L&T down by 1.04%, UltraTech Cement down by 0.88%, HDFC down by 0.87%, Hindustan Unilever down by 0.79% and DLF down by 0.76%, were the major losers on the index.

Most of the Asian equity indices were trading in the Green; Shanghai Composite rose 3.93 points or 0.17% to 2,280.92, Hang Seng added 13.18 points or 0.06% to 23,344.27, KLSE Composite increased 2.12 points or 0.13% to 1,694.70, Straits Times jumped 5.06 points or 0.16% to 3,230.28 and Jakarta Composite was up by 2.83 points or 0.06% to 4,412.85.

On the flip side, Nikkei 225 declined 40.94 points or 0.38% to 10,647.17, KOSPI Composite slipped 4.58 points or 0.23% to 2,007.36 and Taiwan Weighted was down by 48.36 points or 0.62% to 7,757.63.