Benchmarks make gap up start tracking firm global cues

The Indian equity markets have made a gap up start tracking strong cues from global indices. The US markets went for a huge rally overnight after Germany and France pledged to unveil new measures within a month to resolve the euro zone debt crisis while, all the Asian equity indices were trading in the positive terrain at this point of time indicating strong investors’ sentiments. Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to regain their crucial 16,700 and 5,000 mark respectively. Consumer durables witnessed the maximum gain in trade followed by banking and realty while, software remained the lone loser on the BSE sectoral space. Meanwhile, the telecom companies like, Bharti Airtel, Idea Cellular, Reliance Communication and MTNL all were trading with a gain of 2-4 percent after the unveiling of draft telecom policy. Under a draft telecoms policy, the government will let cellular carriers share airwaves, while second-generation mobile spectrum that now comes bundled with a telecoms licence will be separated and priced on a market basis, that will led to operators paying for additional network capacity, driving up their costs. The broader indices were going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 1,279 shares on the gaining side against 372 shares on the losing side while 52 shares remained unchanged.

The BSE Sensex opened at 16,668.15; about 111 points higher compared to its previous closing of 16,557.23, and has touched a high and a low of 16,774.12 and 16,668.15 respectively.

The index is currently trading at 16,728.84, up by 171.61 points or 1.04%. There were 26 stocks advancing against just 4 declines on the index.

The overall market breadth has made a strong start with 75.10% stocks advancing against 21.84% declines. The broader indices too were trading in line with benchmarks; the BSE Mid cap and Small cap indices surged 1.31% and 1.01% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.71%, Bankex up by 1.69%, Realty up by 1.69%, CG up by 1.63% and Metal was up by 1.60%. While, IT down by 0.55% remained the lone loser on the index.

The top gainers on the Sensex were Bharti Airtel up by 4.21%, Hindalco up by 2.75%, Sun Pharma up by 2.60%, Sterlite Industries up by 2.09% and SBI was up by 1.96%.

On the flip side, Infosys was down by 1.40%, ONGC was down by 1.33%, HUL was down by 0.60% and Maruti Suzuki was down by 0.39% were the only losers on the Sensex.

Meanwhile, Power ministry is mulling to amend the bidding documents of the upcoming Ultra Mega Power Projects (UMPP). Rising coal prices and changes in coal export policy by Indonesian government has coerced power ministry for this move.

Indonesia, one of the largest exporter of coal for Indian companies, have made it mandatory that effective September 23 coal exports are to be benchmarked at international prices. Earlier, coal supplies were based on negotiation between the companies and Indonesian government, which was a cheaper transaction.

Private companies such as Tata power (executing UMPP in Gujrat) and Reliance (developing UMPP in AP) who operate projects on imported coal from Indonesia had sought ministry’s permission to increase the tariffs due to rise in coal prices. However, power ministry turned down the request advising companies to sort out the issue bilaterally with procurers of power from these projects.

In order to protect other UMPP projects, power ministry is likely to amend the bidding documents, as the current documents do not have any such provision. 'The Power Ministry has sought response over amendments in the bidding documents of the UMPP from the law and coal ministries... It would accommodate changes in international coal prices,' a Power Ministry official said.

This will be a crucial amendment as shortfall of coal in country is rising and power producers have to be dependent on coal imports to a large extent. The world’s largest coal miner Coal India has missed the production targets in Q1 this fiscal. However, it gave the reason of heavy rains and delays in securing green clearances that it missed the target of 98.7 million tonnes.

The S&P CNX Nifty opened at 5,019.90; about 40 points higher compared to its previous closing of 4,979.60, and has touched a high and a low of 5,045.10 and 5,016.35 respectively.

The index is currently trading at 5,033.55, higher by 53.95 points or 1.08%. There were 45 stocks advancing against just 5 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 4.08%, Hindalco up by 3.11%, RCom up by 2.90%, Sun Pharma up by 2.58% and Axis Bank up by 2.40%.

On the flip side, ONGC down by 1.66%, Infosys down by 1.41%, HUL down by 0.35%, Maruti Suzuki down by 0.19% and Ambuja Cement down by 0.03%, were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up 16.80 points or 0.72% to 2,361.58, Hang Seng was up 576.88 points or 3.26% to 18,287.94, Jakarta Composite was up 110.03 points or 3.19% to 3,561.12, KLSE Composite was up 13.65 points or 0.98% to 1,410.69, Nikkei 225 was up 177.96 points or 2.07% to 8,783.58, Straits Times was up 58.91 points or 2.21% to 2,727.21, Seoul Composite was up 34.92 points or 1.98% to 1,801.36 and Taiwan Weighted was up by 165.93 points or 2.30% to 7,377.89.