Benchmarks lose out their zing as profit-booking takes centre-stage

Benchmarks equity indices have almost lost their zing as profit-booking has spun into action, after early deals run-up rally of the bourses, which took them soaring near a two year high level. Much of the pressure is being exerted from Oil & Gas, PSU and Bankex counters, which appearing exhausted after previous session’s smart up-move, have lured profit-takers.

Although, paring significant portion of their gains, 30 share index, Sensex, is currently holding in green, above its 19,900 psychological level. Similarly, widely followed index, Nifty, too holding the fort in positive terrain, is oscillating above its 600 bastion. Additionally, profit-booking too has taken its toll from broader indices.

On the global front, Asian pacific shares were trading on mixed note, barring Japanese shares which surged to 32-month highs on the back of the yen's slide the previous day after the expectations grew that strong political pressure will prompt the Bank of Japan to deliver bold monetary easing measures. On the other hand, South Korean shares were staging dejected moves hit by losses in Apple Inc's suppliers after media reports said the iPhone maker had slashed orders of screens and other components on weaker-than-expected demand.

Closer home, besides Realty, Auto and Capital Goods space, cement pocket was looking bright. Ambuja Cement, ACC and UltraTech Cement, all were quoting above 1% gains. HOLCIM controlled ACC and Ambuja Cements have decided to seek shareholders approval to pay technology and knowledge fee to Holcim Technology. Additionally, stocks from Sugar space, namely, Shree Renuka Sugars, Bajaj Hindusthan, Balrampur Chini and EID Parry, continue to trade sweet after the government liberalized the procedure for exports of pharmaceutical grade and specialty sugar. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1324:1271, while 118 shares remained unchanged.

The BSE Sensex is currently trading at 19915.65, up by 9.24 points or 0.05% after trading in a range of 20007.09 and 19915.65. There were 14 stocks advancing against 16 declines on the index.

The broader indices too trimmed early gains; the BSE Mid cap and Small cap index were trading higher by 0.32% and 0.24% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.09%, Auto up by 0.52%, Capital Goods up by 0.43%, FMCG up by 0.42% and TECk up by 0.39%. While, Metal down by 0.48%, Oil & Gas down by 0.16%, PSU and Bankex were down by 0.15% and Power down by 0.09% were the losers on the index.

The top gainers on the Sensex were TCS up by 1.84%, ITC up by 1.48%, Bharti Airtel up by 1.43%, Gail India up by 1.28% and Maruti Suzuki up by 1.24%.

On the flip side, Hero MotoCorp down by 1.86%, Sterlite Industries down by 0.1.52%, Jindal Steel down by 1.27%, Coal India down by 1.19% and Hindustan Unilever down by 0.92% were the top losers on the Sensex.

Meanwhile, in an effort to boost country’s exports, Reserve Bank of India (RBI) has extended the 2 per cent interest subsidy scheme for exporters in segments like handicrafts, carpets, SMEs and certain engineering goods, by one year till March 2014. Other sectors which will be benefited from the extension of Rupee Export Credit Interest Rate Subvention Scheme are, handlooms, readymade garments, processed agriculture products, sports goods, toys and 134 engineering good items (or tariff lines).

Under the scheme, banks would reduce the interest rate chargeable to the exporters as per Base Rate system in the select sectors eligible for export credit subvention by the amount of subvention available subject to a floor rate of 7%. Banks may ensure to pass on the benefit of 2% interest subvention completely to the eligible exporters.

Earlier also, the interest subvention scheme was extended till March 31, 2013 on pre and post shipment rupee export credit for certain employment orientated export sectors. However, this time around the government decided to widen the scheme to include certain goods from the engineering sector. A list of as much of 134 tariff lines of Engineering products was approved for inclusion in Interest Subvention for the period January 1, 2013 to March 31, 2013.

Country’s exports have been on declining spree past last eight months. Exports fell 1.9% year-on-year to $24.88 billion in December, whereas improved when compared to $22.3 billion recorded in November 2012.

The S&P CNX Nifty is currently trading at 6,033.40, up by 9.35 points or 0.16% after trading in a range of 6,044.60 and 6,023.20. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Ambuja Cement up by 3.24%, Ultra Cement up by 1.84%, DLF up by 1.82%, TCS up by 1.81% and ACC up by 1.74%.

On the flip side, Hero MotoCorp down by 1.67%, Sesa Goa down by 1.45%, jindal Steel down by 1.22%, Sun Pharma down by 0.98% and Hindustan Unilever down by 0.90% were the major losers on the index.

The Asian equity indices were trading on mixed; Hang Seng declined 0.27%, Straits Times dropped 0.42%, KOSPI Composite decreased 1.16%, Taiwan Weighted was down by 0.75% and KLSE Composite too was trading flat with negative bias. On the flip side, Shanghai Composite surged 0.76%, Nikkei 225 soared 0.72%, Jakarta Composite gained 0.04%.