Firm trade prevails; Sensex above 19,000 mark

Indian equity markets added gains to continue firm trade hovering near the highest point of the day in late afternoon session on account of buying in frontline counters and taking cues from European counterparts. Traders were seen piling some position in Capital Goods, Oil & Gas and Health Care sector stocks while selling was witnessed in Auto sector stock. In scrip specific development, Ambuja Cements was trading in green after CLSA upgraded the stock to buy from outperform, citing reasonable valuations following recent correction. Sugar stocks, Bajaj Hindustan, Shree Renuka Sugars, Balrampur Chini Mills and Dhampur Sugar Mills, continue to hog limelight on hopes that the government may soon remove some curbs on the tightly controlled sector. On the global front, most of the Asian markets were trading in green while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,700 and 19,000 levels respectively. The market breadth on BSE was positive in the ratio of 1737:845 while 95 scrips remain unchanged.

The BSE Sensex is currently trading at 19,022.17, up by 157.42 points or 0.83% after trading in a range of 19,029.81 and 18,826.53. There were 22 stocks advancing against 8 declines on the index. 

The broader indices too added some more ground; the BSE Mid cap and Small cap index were trading up by 1.21% and 1.77% respectively.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.77%, Oil & Gas up by 1.76%, Health Care up by 1.70%, Metal up by 1.56% and PSU up by 1.40%, while Auto down by 0.18% was the sole loser on the BSE. 

The top gainers on the Sensex were Sun Pharma up by 4.09%, Sterlite Industries up by 3.51%, Wipro up by 3.30%, ONGC up by 2.56% and Cipla up by 2.26%. On the flip side, Bajaj Auto was down by 2.06%, Tata Motors down by 0.94%, ICICI Bank was down by 0.40%, Tata Power was down by 0.37% and HDFC was down by 0.36% were the top losers on the Sensex.

Meanwhile, with the start of new fiscal year 2013-14, the financial re-structuring programme for the sick State Electricity Distribution Companies (DISCOMS) have started and eight States with around Rs 1.60 lakh crore of bad loans are on board. The States include Uttar Pradesh, Haryana, Jharkhand, Tamil Nadu, Rajasthan, Kerala, Andhra Pradesh and Bihar. 

As per the Centre’s package, losses will be equally split between the state government and the DISCOMS. Half of these losses would be taken up by the respective States, which will issue long-term bonds in phases. For the remaining 50 per cent of losses, the distribution companies would get a three-year moratorium on principal payment.

In the first three-year phase, the States would issue bonds based on their targets under the Fiscal Responsibility and Budget Management (FRBM) Act, all bonds would not be issued in the first year. Further, after facilitating the stimulus successfully over three years, 25% of benefit would go to respective States as incentives. In the second phase, the government expects the distribution utilities to become cash-surplus and the remaining debt be restructured for seven years.

Moreover, the DISCOMS will have to take steps to cut down distribution losses and increase the electricity tariff based on power purchase fluctuations, which will be monitored by the Power Ministry. The overall annual loss of the utilities before subsidy has increased at 33% annually.

Apart from growing electricity scarcity, the poor financial health of the State electricity distribution companies is also stopping them from buying enough power to meet the demand. During the 11th Five Year Plan (2007-12), India witnessed a peak power shortage of 9%, when over 50,000 MW new generation capacity was created during the same period. The rising burden of fuel prices, low tariff hikes, and non-receipt and delayed subsidy payment from the government are the major reasons for power scarcity. 

The CNX Nifty is currently trading at 5,744.60, up by 40.20 points or 0.70% after trading in a range of 5,747.95 and 5,687.15. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 4.28%, Sesa Goa up by 3.40%, IDFC up by 2.78%, ONGC up by 2.38% and Cipla up by 2.22%.

On the flip side, Bajaj-Auto down by 2.02%, UltraTech Cement down by 1.06%, Axis Bank down by 0.98%, Asian Paints down by 0.96% and Tata Motors down by 0.94% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng gained 0.31%, Jakarta Composite up by 0.34%, Straits Times inched up 0.06%, KLSE Composite up by 0.89% and Taiwan Weighted was up by 0.18%.

On the flip side, Shanghai Composite decreased 0.30%, Nikkei 225 dropped 1.08% and KOSPI Composite was down by 0.49%.

The European markets were trading in green; France’s CAC 40 added 0.50%, Germany’s DAX ascended 0.62% and United Kingdom’s FTSE 100 jumped 0.69%.