Benchmarks make gap-up start on supportive global cues

Buoyed by firm global cues, Indian equity markets have made a gap-up start with both the frontline gauges inching towards their crucial 5,700 (Nifty) and 18,900 (Sensex) levels. Most of the Asian equity indices were trading in the fine fettle at this point of time as investors got confidence from report that Cyprus and its international creditors had reached a deal that will qualify the island for a bailout. The US markets rebounded in late trade to finish higher on Friday on hopes that Cyprus will find a solution to avert the default, there were some good earnings announcements too that helped the markets move higher.

Back home, snapping their six-day long losing streak, key domestic indices were trading in green terrain supported by buying in Oil and Gas counter after Petroleum Minister M Veerappa Moily said that the Prime Minister-headed Cabinet Committee on Investments would take up 31 oil and gas blocks stuck for clearances in ‘two-weeks’. He also said that the government plans to strengthen India’s energy security by taking policy initiatives for exploration of shale gas and coal bed methane. Some strength also came in after public sector oil marketing companies viz. BPCL, HPCL and IOC edged higher on report that the government will give an additional cash subsidy of Rs 25,000 crore to make up for the losses suffered by them on selling fuel at subsidised rates.

On the sectoral front, all opened higher with the realty, public sector undertaking and power leading the opening gains with over one and a half percent. Oil and gas, consumer durables, banking, capital goods and metal indices were the other notable index movers in the opening trades while, there were no losers on the BSE sectoral space. The broader indices were going neck-to-neck with benchmarks while, the market breadth on the BSE was positive  there were 1,128 shares on the gaining side against 742 shares on the losing side while 82 shares remain unchanged.

The BSE Sensex opened at 18,894.13; about 158 points higher compared to its previous closing of 18,735.60, and has touched a high and a low of 18,950.22 and 18,851.37 respectively.

The index is currently trading at 18,894.42, up by 158.82 points or 0.85%. There were 22 stocks advancing against 8 declines on the index.

The overall market breadth has made a strong start with 57.44% stocks advancing against 38.21% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices rose by 0.95% and 0.85% respectively. 

The top gaining sectoral indices on the BSE were, Realty up by 2.38%, PSU up by 1.55%, Power up by 1.52%, Oil & Gas up by 1.42% and Consumer Durables up by 1.42% while, there were no losers on the sectoral index.

The top gainers on the Sensex were ONGC up by 3.21%, HDFC up by 2.69%, NTPC up by 2.47%, Sterlite Industries up by 1.62% and SBI up by 1.48%.

On the flip side, Bajaj Auto was down by 1.08%, Bharti Airtel was down by 0.75%, Coal India was down by 0.71%, Hero MotoCorp was down by 0.56% and Mahindra & Mahindra was down by 0.43% were the top losers on the Sensex.

Meanwhile, National Food Security Bill, which got Cabinet’s approval earlier this week, will be presented in the Parliament on March 22, with a hope that the revised bill will see the light of the day before the current session draws to an end on May 10. Under the revised Food Security Bill, 67% of India’s population will have the right to get a monthly quota of 5 kg of food-grains at highly subsidized rates of Rs 1-3 per kg, which means atleast 5 kg of food grains would be guaranteed to one person per month under the bill, with the poorest of the poor continuing to get 35 kg per month.

Earlier, it was reported that Cabinet would try to bring ‘amendments to the Food Bill in Parliament before Friday'. Uptill now, 55-56 amendment bills have been made in-line with the suggestions made by the Parliamentary Standing Committee, which submitted its report in January this year.

With the hope that this decision to supply cheap wheat and  rice will fetch government with rich dividends in the next general election, the price of Rice to be sold through ration shops has been fixed at Rs 3 per kg, wheat at Rs 2 and millets at Re 1 in the first three years of the implementation of the Act, which is way lower than the market price of over Rs 20/kg for rice and Rs 16/kg for wheat. However, the right to decide on the beneficiaries would be in the hands of state government, while the rights to exclude 33% of population will be of Planning Commissions.

In the previous bill that was introduced in the Lok Sabha in December 2011, the Centre had proposed 7 kg of rice or wheat or millet a month for priority category at Rs 3, Rs 2 and Re 1 per kg respectively, while at least 3 kg per person per month for general households at 50 percent of support price. However, this time around the bill proposes only one category of beneficiary with uniform entitlement at uniform price.

Further, laying more burden on state government, the bill envisages liability of the central government under the Right to Food Security to be limited uptill providing grains to the state food depots, with the former being charged penalty if it fails to provide these gains to the intended beneficiaries.

The CNX Nifty opened at 5,707.30; about 55 points higher as compared to its previous closing of 5,651.35, and has touched a high and a low of 5,718.40 and 5,687.20 respectively.

The index is currently trading at 5,698.10, up by 46.75 points or 0.83%. There were 39 stocks advancing against 11 declines on the index.

The top gainers of the Nifty were DLF up by 3.88%, ONGC up by 3.30%, NTPC up by 2.73%, HDFC up by 2.69% and JP Associate up by 2.52%.

On the flip side, Bajaj-Auto down by 1.13%, Ranbaxy down by 0.98%, Hero MotoCorp down by 0.76%, Bharti Airtel down by 0.70% and Coal India down by 0.46%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng surged 146.47 points or 0.66% to 22,261.77, Jakarta Composite rose 29.61 points or 0.63% to 4,752.77, KLSE Composite jumped 7.74 points or 0.48% to 1,634.63, Nikkei 225 soared 218.89 points or 1.77% to 12,557.42, Straits Times increased 17.16 points or 0.53% to 3,275.73, KOSPI Composite added 25.16 points or 1.29% to 1,973.87 and Taiwan Weighted was up by 65.88 points or 0.85% to 7,862.10.

On the flip side, Shanghai Composite was down by 3.81 points or 0.16% to 2,324.47.