Sensex edges up on better than expected January inflation numbers

Following a positive opening and a subsequent retreat, Indian equity markets gave up early losses in the late morning session on Thursday. Benchmarks recovered in a pleasant surprise when the wholesale price index (WPI), India's main inflation gauge, unexpectedly eased to 6.62% for the month of January as compared to 7.23% during the corresponding month of the previous year. With this moderation in inflation numbers, there is likelihood that the RBI may cut interest rates by another 25 basis points in the mid-quarter policy review in March 2013. In currency markets, rupee extended losses against dollar amid fresh demand for the American currency from banks and importers. On sectoral front, metal, IT, oil and banking stocks were trading in green, while auto, consumer durables and healthcare sectors were trading in red. In global markets, Asian markets were trading higher on improving risk sentiment while the yen steadied ahead of the weekend meeting of G20 finance and central bank officials, as investors will scrutinize their views on global growth and differences over currencies. Back home, the market breadth favoring negative trend; there were 1,563 shares on the losing side against 778 shares on the gaining side while 121 shares remain unchanged.

The BSE Sensex is currently trading at 19,621.13 up by 13.05 points or 0.07% after trading in a range of 19,639.83 and 19,557.65. There were 17 stocks advancing against 12 declines on the index and one remains unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.76% and Small cap index was down by 0.85%.

The top gaining sectoral indices on the BSE were, Metal up by 0.88%, IT up by 0.50%, Oil & Gas up by 0.50%, FMCG up by 0.44% and Realty up by 0.34%. While, Auto down by 1.19%, Consumer Durables down by 0.92%, Health Care down by 0.82%, Capital Goods down by 0.81% and Power down by 0.62% were the top losers on the index.

The top gainers on the Sensex were Sterlite Inds up by 2.12%, ONGC up by 1.36%, Hindustan Unilever up by 1.30%, NTPC up by 1.28% and GAIL up by 1.25%

On the flip side, Bharti Airtel down by 3.21%, Wipro was down by 2.84%, Maruti Suzuki was down by 2.22%, Tata Motors was down by 1.97% and Dr Reddys Lab was down by 1.71% were the top losers on the Sensex.

Meanwhile, buoyant by the response of foreign investors to public sector units (PSU) stake sale, the government is expected to raise the disinvestment target to Rs 40,000 crore in the next fiscal by selling equity shares of 20 PSU companies. The Department of Disinvestment (DoD), the nodal department for stake sales in PSUs, has identified 20 PSU companies for minority stake sale in the 2013-14 fiscal.

Further, it is reported that disinvestment plan for next fiscal is already in progress for lining up companies for minority stake sale in the next fiscal and DoD officials are meeting the administrative ministries and company officials for executing it on time. The companies which have been identified for disinvestment next fiscal include Coal India, Indian Oil, PGCIL, NHPC, Hindustan Copper (HCL), National Electric Power Company (NEPCO) and THDC among others. Apart from this, Cabinet approval has already been accorded for disinvestment in Neyveli Lignite, BHEL and Hindustan Aeronautics.

Moreover, the government expects that an early start to divestment process in next fiscal would help in garnering higher funds. So far this fiscal, the government has raised only  Rs 21,500 crore as against the target of Rs 30,000 crore and is expected to raise Rs 27,000 crore by the end of this fiscal.

The S&P CNX Nifty is currently trading at 5,931.10 down by 1.85 points or 0.03% after trading in a range of 5,940.20 and 5,911.05. There were 28 stocks advancing against 21 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were ONGC up by 1.33%, NTPC up by 1.25%, GAIL up by 1.20%, Ambuja Cement up by 1.11% and Jindal Steel up by 1.09%.

On the flip side, Bharti Airtel down by 3.36%, Wipro down by 2.94%, PowerGrid down by 2.87%, Siemens down by 2.51% and Maruti Suzuki down by 2.04% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng surged 0.95%, Jakarta Composite rose 0.63%, KLSE Composite added 0.16%, KOSPI Composite was up by 0.18% and Nikkei 225 increased 0.50%. On the flip side, Straits Times was down by 0.19%.

China and Taiwan markets remained closed for the trade today.