Indian equity remains firm; Nifty above 5,800 mark

Indian equity markets continued to trade firm in the late afternoon session on account of buying in frontline counters and were also taking cues from European counterparts, which have made a positive start. The sentiments on the street were optimistic on buzz that the Reserve Bank of India (RBI) is likely to cut interest rates next week for a third time this year, drawing comfort from a fall in inflation as it seeks to help lift the economy from its lowest growth in a decade. Traders were seen piling position in Consumer Durables, Capital Goods and Banking stocks, while selling was witnessed in IT and TECK sector stock. The market may remain volatile this week as traders may roll over positions in the futures & options (F&O) segment from the near month April 2013 series to next series. The April 2013 F&O contracts will expire on Thursday i.e. April 25, 2013. The stock market will remain shut on Wednesday April 24, 2013, on account of Mahavir Jayanti.

In scrip specific development, Mahanagar Telephone Nigam (MTNL) was trading in green after the government formed a panel to look into the revival of BSNL and MTNL. HMT too was trading firm as the Cabinet Committee on Economic Affairs (CCEA) has approved Rs 1,083 crore revival package for the company. Wipro was trading under pressure as the company has reported lower-than-expected results on revenue as well as on margin front.

On the global front, the Asian markets were trading on a mixed, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,800 and 19,100 levels respectively. The market breadth on BSE was positive in the ratio of 1217:984, while 131 scrips remained unchanged.

The BSE Sensex is currently trading at 19,122.80, up by 106.34 points or 0.56% after trading in a range of 19,144.47 and 18,989.78. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading up by 0.90% and 0.57% respectively.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 4.12%, Capital Goods up by 2.28%, Bankex up by 2.04%, Power up by 1.60% and Metal up by 1.38% while, IT down by 2.43% and TECK down by 1.52% were the only losers on the BSE.

The top gainers on the Sensex were Coal India up by 4.04%, HDFC Bank up by 3.96%, L&T up by 2.60%, BHEL up by 2.50% and NTPC up by 1.78%.

On the flip side, Wipro down by 8.76%, Infosys was down by 2.35%, Bajaj Auto down by 2.12%, Dr. Reddy’s Lab down by 1.92% and Mahindra & Mahindra down by 1.74% were the top losers on the Sensex.

Meanwhile, the government is likely to take a final decision on coal price pooling on April 22 by which the prices of domestic and imported coal are averaged to get a uniform price for the fuel in the country. Various thermal power plants in the country have been stranded due to scarcity of coal and the decision on coal price pooling will help these plants.  However, the decision has been pending for a long time because of the conflict between the coal and power ministries on how the impact of higher imported coal prices will be shared between state miner Coal India (CIL) and power companies.

Earlier, in February, CCEA had given its in-principle approval for coal price pooling and had asked coal and power ministries to work out a formula. The power ministry after consultation with the Central Electricity Authority (CEA) has suggested the Coal Ministry that the difference in cost of imported and domestic coal should be added to the cost of indigenous fuel at the time of finalising proposal for pooling coal prices.

While, coal India had said that price pooling was a mechanism to implement fuel supply agreement (FSA) and if price pooling is approved then 15 percent supply of imported coal ‘will be not in the cost plus method, but in pooling mechanism’.

Coal India board had earlier approved the modified FSA without price-pooling with 65 percent domestic coal and 15 percent imported coal at cost plus basis. So far, around 50 companies have entered into fuel supply pacts with Coal India for receiving the fuel. As per the FSA, Coal India has to provide an assured supply of minimum 80 percent of the total quantity, if failing to which would be penalized.

The CNX Nifty is currently trading at 5,819.45, up by 36.35 points or 0.63% after trading in a range of 5,833.45 and 5,789.80. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were HDFC Bank up by 3.86%, Coal India up by 3.79%, IndusInd Bank up by 3.46%, Reliance Infrastructure up by 3.14% and Power Grid Corporation of India up by 3.08%.

On the flip side, Ultratech Cement down by 2.63%, Infosys down by 2.43%, Bajaj Auto down by 2.29%, Dr. Reddy’s Lab was down by 2.23% and HCL Technologies was down by 2.17% were the major losers on the index.

Asian equity indices were trading on a mixed bag; Nikkei 225 surged 1.89%, Straits Times jumped 0.35%, KOSPI Composite spiked up 1.03%, Hang Seng added 0.14% and Taiwan Weighted was up by 0.50%.

On the flip side, Shanghai Composite declined 0.11%, KLSE Composite was down by 0.07%, and Jakarta Composite decreased 0.41%.

The European markets were trading in green; France’s CAC 40 added 0.51%, Germany’s DAX ascended 0.60% and United Kingdom’s FTSE 100 edged higher by 0.61%.