Benchmarks continue to trade in fine fettle; broader indices succumb to selling pressure

UPA’s diesel hike move continues to buoy spirit at D-street, although benchmark equity indices have not gained additional traction, they continue to trade in fine-fettle. Facing stiff resistance at higher level, benchmark 30 share index, Sensex, is oscillating around 20,000 mark. Similarly, widely followed index, Nifty, too is comfortably sailing past 6050 bastion. However, broader indices counters facing bout of profit-booking, have trimmed substantial gains.

Strength of Oil & Gas, PSU and Capital Goods space, has mainly shored up the trend at D-street, besides positive global cues. Asian shares advanced on Friday as encouraging Chinese data confirmed a recovery was on track in the world's second largest economy, cementing positive sentiment after global equities rose overnight on firm U.S. labour and housing market reports. China's economy grew 7.9 percent in the fourth quarter of 2012 from a year earlier, official data showed, strengthening from 7.4 percent in the third quarter -- the lowest since the depths of the global financial crisis.

Back home, profit-booking in Information Technology (IT), Auto and Health Care (HC) space, were prevented the further up-tick of the bourses. Appreciation of Indian currency to two and half month high, was working against IT counter. Nevertheless the positive momentum of the bourses was also rendered by banking stocks, which beefed up gains on rate cut hopes. Hopes were that government’s decision of partially deregulating diesel prices, a move towards fiscal consolidation, may help ease the apparent hawkish stance of RBI, which puts fiscal consolidation as a pre-condition for rate cuts. The market breadth on BSE is in the favor of declines which have thumped advances in the ratio of 1306:1292, while 141 shares remained unchanged.

The BSE Sensex is currently trading at 20067.69, up by 103.66 points or 0.52% after trading in a range of 20126.55 and 20037.23. There were 17 stocks advancing against 12 declines on the index and one remained unchanged.

The broader indices have trimmed some early gains; the BSE Mid cap and Small cap index were trading higher by 0.27% and 0.05% respectively.

The top gaining sectoral indices on the BSE were Oil & Gas up by 3.09%, PSU up by 3.00%, Capital Goods up by 0.76%, Bankex up by 0.66% and Realty up by 0.46%. While, TECk down by 0.87%, IT down by 0.67%, Auto down by 0.50%, Health Care down by 0.50% and Consumer Durables down by 0.24% were the top losers on the index.

The top gainers on the Sensex were ONGC up by 7.71%, Maruti Suzuki up by 3.99%, Gail India up by 1.89%, SBI up by 1.43% and ICICI Bank up by 1.38%.

On the flip side, Wipro down by 4.80%, Hero Moto Corp was down by 3.60%, Jindal Steel down by 1.87%, Hindustan Unilever was down by 1.85% and Bharti Airtel  down by 1.81% were the top losers on the Sensex.

Meanwhile, Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Manmohan Singh has decided to align the National Investment Fund (NIF) operation to enhance the disinvestment policy and  has approved that income from disinvestment can be used for recapitalization of public sector banks and for subscribing to rights issues of Central Public Sector Undertakings (CPSUs).

The NIF will be used for recapitalisation of public sector banks and insurance companies and for preferential allotment of shares of CPSE to promoters so that government holding does not go below 51 per cent, in all cases where CPSE is going to raise fresh equity to meet its capital expenditure programme.

According to the government, with effect from FY14, the disinvestment proceeds will be credited to the public account under the head NIF, and they would remain there until withdrawn or invested for the approved purposes. So far, NIF money was used to meet the capital expenditure needs of selected social sector schemes. Further, the fund managers presently managing the NIF will stand discharged of their responsibility from the date the funds and the interest income are transferred to the fund.

The S&P CNX Nifty is currently trading at 6,069.25, up by 30.05 points or 0.50% after trading in a range of 6,083.40 and 6,059.20. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were BPCL up by 9.93%, ONGC up by 7.81%, Maruti Suzuki up by 4.28%, Bank of Baroda up by 2.95%, and Gail India up by 2.01%.On the flip side, Wipro down by 5.10%, Hero Moto Corp down by 3.74%, Bharti Airtel down by 2.31%, Hindustan Unilever down by 1.60% and Jindal Steel down by 1.60%.

Most of the Asian equity indices were trading in green; Shanghai Composite up by 1.326%, Hang Seng up by 0.99%, Nikkei 225 up by 2.86%, Straits Times up by 0.33%, Jakarta Composite was up by 0.97%, KOSPI Composite up by 0.69% and Taiwan Weighted was up by 1.53%. On the flip side, KLSE Composite down by 0.21%.