Benchmarks pare some gains; Nifty slips below 5900 level

Benchmark equity indices pared some gains after escalating near intra-day’s high level, which encouraged wary investors for squaring off their position on the last trading session of the week. However, the overall trend at D-street remains sanguine amidst positive global set-up, which is mainly buoyed by the better-than-expected US data that boosted the outlook for growth, with focus now shifting to US non-farm payrolls data due on Friday, seen as a key labour market indicator for the world's largest economy. Back home, paring off its gains a bit, Sensex is trading above 19500 level, however, widely followed index, Nifty is off its 5900 bastion. Meanwhile, broader indices too have shed some gains. Amongst sectoral indices, Oil & Gas, Fast Moving Consumer Goods and Public Sector Undertaking counters have turned out to be the best performers for the session, so far, while stocks from Information Technology and Technology counters are the dark dots in the trade. Meanwhile, expectation that the RBI will cut rates later this month boosted banks. Hinging with optimism are stocks of HDFC Bank, ICICI Bank, etc. On the flip side, Technology stocks which gained sufficient traction in the previous trading session on expectations of improving sector earnings this year, especially in the United States, remained downbeat today on account of profit-booking. The overall market breadth on BSE continued to stay in the favour of advances which outnumbered declines in the ratio of 1454:1025, while 115 shares remained unchanged.

The BSE Sensex is currently trading at 19515.66, up by 102.12 points or 0.53% after trading in a range of 19581.95 and 19477.61. There were 22 stocks advancing against 8 declines on the index.

The broader indices too pared some gains; the BSE Mid cap and Small cap indices were trading higher by 0.40% and 0.59% respectively.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.15%, FMCG up by 1.11%, PSU up by 1.04%, Metal up by 0.78% and Power up by 0.75%. While, IT down by 0.86% and Teck down by 0.55% were the top losers on the BSE.

The top gainers on the Sensex were Jindal Steel up by 2.92%, Hero MotoCorp up by 2.50%, HDFC up by 2.16%, Gail India up by 1.84% and Coal India up by 1.76%.

On the flip side, Infosys down by 1.39%, Dr Reddys Lab down by 1.03%, Tata Motors down by 0.98% TCS down by 0.85% , TCS down by 0.85% and Hindalco down by 0.84% were the top losers on the Sensex.

Meanwhile, the Government is planning to reduce outgo on subsides from 2.6 percent of GDP in 2011-12 to 1.5 percent by the end of 12th Five Year Plan (2012-17) through various reforms. Further, pre-determined limits would be set for subsidies for this. The expenditures on subsidies during the 11th Plan (2007-12) increased by 207 percent from around Rs 70,926 crore to Rs 2,17,941 crore in 2011-12.

Government is of the view that high outgo on subsidies hurts the inclusive growth and it should be contained within pre-determined limits. With this move, the government will also achieve its fiscal deficit targets. The Finance Ministry has pegged the overall fiscal deficit in 2013-14 at 4.8 percent lower than the estimated 5.2 percent of GDP in current financial year.

Further, as per government, reducing subsidies will not hurt the poor as some subsidies under the proposed Food Security Act will be pre-determined and others such as on fertilisers can be redesigned to serve their purpose at less cost. Subsidies on petroleum products which are untargeted and do not benefit the poor would need to be reduced. The government has made a provision of Rs 2, 31,084 crore on account of subsidy outgo in the Budget for 2013-14.

The CNX Nifty is currently trading at 5,897.95, up by 34.65 points or 0.59% after trading in a range of 5,914.15 and 5,883.00. There were 38 stocks advancing against 11 declines on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were BPCL up by 3.67%, Jindal Steel & Power up by 2.91%, Hero MotoCorp up by 2.52%, HDFC up by 2.30% and GAIL up by 2.07%.

On the flip side, DLF down by 1.41%, Infosys down by 1.33%, Dr Reddy's Laboratories down by 0.98%, Tata Motors down by 0.93% and Hindalco Industries down by 0.84% were the major losers on the index.

Most Asian equity indices were trading in the green; Shanghai Composite up by 0.05%, Hang Seng surged 1.62%, Jakarta Composite strengthened 1.41%, KLSE Composite 0.03%, Nikkei 225 soared 2.64% , KOSPI Composite was up by 0.08% and Taiwan Weighted was up by 0.69%.

On the flip side, Straits Times slipped 0.20% was the only loser.