Domestic bourses trade slightly in positive on Wednesday

Indian benchmarks have made a flat-to-positive start on Wednesday tracking recovery in Asian markets. Most of the regional peers were trading with some traction on hopes of policy easing by Bank of Japan to boost growth in world’s third-biggest economy while, the US markets extended their weak trend overnight as uncertainty about the upcoming earnings season kept the investors cautious. Though, economic news was good as US consumer credit rose by more than expected in November.

Back home, domestic bourses were trading above their crucial 6,000 (Nifty) and 19,750 (Sensex) levels. Some support came in from reports that the government is planning to hike the price of subsidised LPG cylinders by Rs 130 during January-March 2013. It also plans to hike diesel prices by Rs 1.5 a litre every month. All the PSU oil marketing companies viz. BPCL, HPCL and IOC were trading higher in the morning deals. Telecom stocks like Idea Cellular and Bharti Airtel too were trading with traction after the telecom department (DoT) approached the Supreme Court seeking extension of its January 18 deadline for shutting down mobile networks till the next round of airwaves auctions. However, traders remained on sidelines ahead of the Oct-Dec earnings starting this Friday. Infosys, the bellwether stock of Information Technology index, will unveil its third quarter performance amid fear that software maker may cut its revenue guidance for the next quarter.

On the sectoral front, auto witnessed the maximum gain in trade followed by realty and oil and gas while, consumer durables, fast moving consumer goods and metal remained the top losers on the BSE sectoral space. The broader indices were going neck-to-neck with benchmarks while, the market breadth on the BSE was positive; there were 1,257 shares on the gaining side against 635 shares on the losing side while 86 shares remain unchanged.

The BSE Sensex opened at 19,770.21; about 27 points higher compared to its previous closing of 19,742.52, and has touched a high and a low of 19,808.06 and 19,765.66 respectively.

The index is currently trading at 19,784.72, up by 42.20 points or 0.21%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a strong start with 63.55% stocks advancing against 32.10% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices rose 0.44% and 0.38% respectively.

The top gaining sectoral indices on the BSE were, Auto up by 0.98%, Realty up by 0.97%, Oil & Gas up by 0.59%, CG up by 0.52% and TECk up by 0.43% while, CD down by 0.17%, FMCG down by 0.09%, Metal down by 0.08% and Power down by 0.02% were the only losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.33%, Bharti Airtel up by 1.07%, Sun Pharma up by 1.00%, L&T up by 0.67% and RIL up by 0.61%.

On the flip side, ITC was down by 0.81%, HDFC was down by 0.66%, Bajaj Auto was down by 0.56%, Jindal Steel was down by 0.54% and Tata Steel was down by 0.35% were the top losers on the Sensex.

Meanwhile, in a move towards deepening the bond markets, the Reserve Bank of India (RBI) has eased the norms for trading in corporate repo markets thereby allowing short-term debt securities also qualified for it, and by widening the credit default swaps basket. The apex bank said short-term corporate debt could be traded in the repo market, where holders of securities pledge them to borrow funds with a promise to buy them back at a future date.

The central bank notified that repo in corporate debt shall also be permitted on commercial papers, certificates of deposit and non-convertible debentures of less than one year of original maturity. In short-term securities like commercial paper and certificate of deposit, the liquidity is higher, so the price discovery will be better. The Indian bond market has been shallow because of tight regulations. However, for this move to improve trading volumes, SEBI has to permit mutual funds to borrow against their assets to meet at least their temporary payment needs.

The RBI also allowed credit default swaps (CDS), an insurance against default, on unlisted corporate debt securities and those with less than one year maturity. Further RBI said ‘in addition to listed corporate bonds, CDS shall also be permitted on unlisted but rated corporate bonds even for issues other than infrastructure companies and CDS shall also be permitted on securities with original maturity up to one year like commercial papers, certificates of deposit and non-convertible debentures with original maturity less than one year as reference/deliverable obligations’.

Central bank also reduced the minimum discount that lenders have to withhold, while lending against a security. For AAA Securities, it is 7.5% now from 10%, and for AA+ bonds, it is 8.5% from 12%.

The S&P CNX Nifty opened at 6,006.20; about 4 points higher as compared to its previous closing of 6,001.70, and has touched a high and a low of 6,015.55 and 6,005.20 respectively.

The index is currently trading at 6,009.10, up by 7.40 points or 0.12%. There were 27 stocks advancing against 22 declines and one remains unchanged on the index.

The top gainers of the Nifty were Tata Motors up by 3.34%, BPCL up by 1.35%, Bharti Airtel up by 1.14%, Sun Pharma up by 0.76% and L&T up by 0.70%.

On the flip side, ITC down by 0.89%, Reliance Infrastructure down by 0.81%, Ultra Tech Cement down by 0.77%, HDFC down by 0.74% and Jindal Steel down by 0.71%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite rose 1.64 points or 0.07% to 2,277.71, Hang Seng increased 85.54 points or 0.37% to 23,196.73, KLSE Composite jumped 2.22 points or 0.13% to 1,691.13, Nikkei 225 surged 47.75 points or 0.45% to 10,555.81, Straits Times soared 8.80 points or 0.27% to 3,214.32 and Taiwan Weighted was up by 7.35 points or 0.10% to 7,729.01.

On the flip side, Jakarta Composite slipped 1.78 points or 0.04% to 4,395.77 and KOSPI Composite was down by 3.76 points or 0.19% to 1,994.18.