Benchmark equity indices, trimming losses, have dipped near intra-day’s low level however, trade at 30 share barometer index, Sensex, continues to remain in positive terrain thanks to sustained buying in rate sensitive, Auto, Realty and defensive Health Care counters. Auto stocks have put a tough face of resistance even amidst reports which highlight Car sales likely to post their weakest growth in nine years this financial year, compounding the country's gloomy economic outlook, as the automotive industry battles with high interest rates and slowing economic expansion. Prominent gainers amongst the space were Tata Motors, which spurted over 3%, closely followed by Hero MotoCorp and Maruti Suzuki. Further, much of the support also was rendered by Public Oil marketing Companies (PSUs), namely BPCL, HPCL and IOC, which spurted on the reports of government plans to hike the price of subsidised LPG cylinders by Rs 130 during January-March 2013, besides the plans of raising diesel prices by Rs 1.5 a litre every month.
Additionally, even positive global developments have restricted the downside chances of the bourses. Though languishing at intra-day’s low level, 30 share index, Sensex, is holding 19750 bastion. However, 50 share index, Nifty, slipping a tad below its previous closing level, is trading below the crucial 6000 mark. Meanwhile, broader indices too have pared some of their gains.
On the global front, Asian pacific shares are trading in green on Wednesday as investors have resumed buying after taking profits from a sharp rally at the start of the year while warily bracing for corporate earnings season to kick off in full force. While, European shares were seen following Asia's lead with a modest rise.
Closer home, besides Auto, Realty sector is also keeping the sentiment upbeat at D-street. Realty stocks have firmed up partly on reports of Government relaxing norms for construction of additional floors and also partially on bargain buying ahead of the Reserve Bank of India's next rate-setting meeting scheduled for January 29, 2013. Delhi government has relaxed norms for construction of additional floors in residential flats having multiple ownership with an aim to weed out corruption, according to the reports. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1436:1197, while 121 shares remained unchanged on the index.
The BSE Sensex is currently trading at 19756.27, up by 13.75 points or 0.07% after trading in a range of 19824.06 and 19739.21. There were 15 stocks advancing against 15 declines on the index.
The broader indices too trimmed some gains; the BSE Mid cap and Small cap index were trading higher by 0.11% and 0.21% respectively.
The top gaining sectoral indices on the BSE were, Auto up by 1.43%, Health Care up by 0.58%, Realty up by 0.49%, Oil & Gas up by 0.31% and PSU up by 0.29% while, FMCG down by 0.74%, CD down by 0.46%, Metal down by 0.35%, Information Technology down by 0.27% and Power down by 0.22% were the losers on the index.
The top gainers on the Sensex were Tata Motors up by 4.57%, Coal India up by 1.99%, Bharti Airtel up by 1.12%, Gail India up by 1.02% and M&M up by 0.98%.
On the flip side, Tata Steel was down by 1.57%, BHEL down by 1.35%, ITC down by 1.24%, Wipro down by 0.89% and Hero MotoCorp was down by 0.86% were the top losers on the Sensex.
Meanwhile, the government is reportedly planning to up the prices of subsidized LPG cylinders, currently capped at six a year, by Rs 130 during January-March 2013, besides its plans to hike diesel prices by Rs 1.5 a litre every month, which will take the hike to Rs 4.5 a litre during the period.
Further, on kerosene, the proposal is that the prices be either increased by 35 paise a litre per month or Re 1 a litre per quarter till March 2015. The proposal, which is currently under consideration of government, may be tabled at the cabinet for a final decision by Prime Minister (PM) Manmohan Singh and other senior UPA ministers.
For subsidised LPG, the government has proposed that either the three oil marketing companies, namely IOC, BPCL and HPCL, be allowed to increase the price of each subsidised cylinder by Rs 130, plus VAT as applicable or consumer price of subsidised LPG cylinders be immediately increased by Rs 65 a cylinder and the balance by another Rs 65 a cylinder before March 31, 2013. The proposal further calls for a Rs 50 per cylinder hike to be passed on to the consumer every quarter starting 2013-14 (or after April 1, 2013) till the under-recovery of oil companies for selling fuels below cost price, on LPG diminish to zero.
Meanwhile, for diesel, where the oil companies are currently losing around Rs 9.50 on a litre sale, the proposal calls for an immediate hike in the retail sales price by Rs 4.50 (at Rs 1.50 a month from January 2013 to March 2013) and a Re 1 per litre increase every month thereafter till the under-recovery on diesel totally diminish. Other proposal for diesel includes the prices be increased by 60 paisa a month till the under-recovery on diesel is eliminated and diesel prices are deregulated.
Additionally, it remains important to be highlighted that, all these proposals comes amidst ratings agency’s Fitch maintaining its 'negative' outlook on India's sovereign rating, citing concerns over slowing economic growth, inflationary pressures and an uncertain fiscal outlook. However, government is appearing confident of taking economy in the right track with a slew of its big-ticket reforms and believes that fiscal deficit target is achievable.
Earlier, Prime Minister hinting at Diesel, LPG price hike in a phased manner, said that, “Diesel, kerosene and cooking gas LPG prices may be hiked soon as the government considers Vijay Kelkar Committee recommendations on cutting fiscal deficit”. The Kelkar Committee, which was appointed by Finance Ministry to suggest a roadmap for fiscal consolidation, suggested immediate hike in fuel prices and complete deregulation of diesel prices by start of 2014-15 fiscal. It also suggested raising kerosene and LPG rates.
The S&P CNX Nifty is currently trading at 5,997.00, down by 4.70 points or 0.08% after trading in a range of 6,020.10 and 5,993.75. There were 22 stocks advancing against 28 declines on the index.
The top gainers of the Nifty were Tata Motors up by 4.49%, Coal India up by 2.11%, Bhari Airtel up by 1.09%, Gail India up by 0.95%, M&M up by 0.92%.
On the flip side, Tata Steel down by 1.72%, BHEL down by 1.58%, ITC down by 1.44%, Ultra Tech Cement down by 1.43% and IDFC down by 1.30% were the major losers on the index.
Most of the Asian equity indices were trading in the green; Hang Seng increased 0.29%, KLSE Composite jumped 0.08%, Nikkei 225 surged 0.67%, Straits Times soared 0.23% and Taiwan Weighted was up by 0.22%.
On the flip side, Shanghai Composite down 0.49%, Jakarta Composite slipped 0.29% and KOSPI Composite was down by 0.31%.
