Benchmarks trade in green on firm global cues

Buoyed by firm global cues, Indian equity indices have made a positive start on Monday. Although, the market-men trimmed most of their initial gains soon as sentiments remained cautious after global credit rating agency Standard & Poor's ruled out rating upgrade for India at the current juncture, however also said that India could maintain a sustainable 7-8% growth rate if it is able to bring down its fiscal and current account deficits (CAD) to 3% of GDP level. Sentiments also remained choppy after selling witnessed in banking space as Cobrapost, the website that launched a sting operation hurting a few banks said that it will release fresh set of secret recordings later in the day. It apparently covers the who’s who of the Indian banking and financial sector and some politicians. Investors will also watch out for Services PMI and composite PMI for April, by HSBC which will be released later this week.

However, market managed to keep their head above water supported by firm global cues as the US markets rallied on Friday on getting better than expected jobs data, unemployment rate too fell to its lowest in more than four years. Asian markets too traded higher in the early deals tailing firm cues from US markets. Meanwhile, South Korean shares were trading in green after refiners shares rebounded from their recent sharp declines.

Back home, on the sectoral front, software witnessed the maximum gain in trade followed by metal and technology while, banking, fast moving consumer goods and consumer durables remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 768 shares on the gaining side against 449 shares on the losing side while 51 shares remain unchanged.

The BSE Sensex opened at 19,571.66; about 4 points lower compared to its previous closing of 19,575.64, and has touched a high and a low of 19,635.82 and 19,554.31 respectively.

The index is currently trading at 19,593.07, up by 17.43 points or 0.09%. There were 24 stocks advancing against 6 declines on the index.

The overall market breadth has made a strong start with 60.57% stocks advancing against 35.41% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices up by 0.39% and 0.69% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 1.52%, Metal up by 1.47%, Teck up by 1.23%, Consumer Durables up by 0.99% and Oil & Gas up by 0.72% while, Bankex down by 1.29%, FMCG down by 0.35%, Capital Goods down by 0.34% and Realty down by 0.21% were the only losers on the sectoral index.

The top gainers on the Sensex were Sterlite Industries up by 2.38%, Hindalco Industries up by 2.19%, Tata Steel up by 2.09%, TCS up by 1.95% and Hero MotoCorp up by 1.39%.

On the flip side, ICICI Bank was down by 1.30%, HDFC Bank was down by 1.19%, SBI was down by 0.97%, L&T was down by 0.96% and ITC was down by 0.62% were the top losers on the Sensex.

Meanwhile, after turning down the proposal of coal price pooling of domestic and imported coal, which would have made the fuel reasonably priced to new power plants, the government is now planning to pool coal supplies and pass higher import costs on to tariff. As per the Planning Commission Deputy Chairman Montek Singh Ahluwalia, the imported coal is more expensive than domestic coal, so the higher cost of imported coal will passed on in the tariff.

By adding further, Ahluwalia said that it would be some kind of average price as the available domestic coal, which is priced lower, will be distributed among different people and the balance (shortfall) will have to be made up through imports.  Last month, the Cabinet Committee on Economic Affairs (CCEA) had turned down the proposal of coal pricing pooling owing to sharp opposition to the scheme. The proposal was being opposed for various reasons by older power plants and domestic coal producers as the proposal will remove the advantage that old power projects enjoyed as compared to newer ones.

As per the CCEA meeting, the power projects commissioned before 2009 will continue to get coal at pre-fixed (below market) rates. While, the new projects, commissioned after 2009 largely have a cost-plus mechanism for calculation of electricity tariff and so any higher imported cost of coal will be passed through to the consumers. This may lead to increase in electricity tariffs if the generation companies pass the rise in cost to the consumers. 

The CNX Nifty opened at 5,944.90; flat as compared to its previous closing of 5,944.00, and has touched a high and a low of 5,957.55 and 5,928.45 respectively.

The index is currently trading at 5,946.05, up by 2.05 points or 0.03%. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 2.24%, Tata Steel up by 2.12%, Hindalco Industries up by 2.09%, NMDC up by 2.09% and TCS up by 1.94%.

On the flip side, IndusInd Bank down by 1.51%, JP Associate down by 1.46%, PNB down by 1.43%, IDFC down by 1.32% and Axis Bank down by 1.27%, were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 19.46 points or 0.88% to 2,224.96, Hang Seng surged 219.60 points or 0.97% to 22,909.56, Jakarta Composite soared 50.05 points or 1.02% to 4,975.53, KLSE Composite zoomed 53.35 points or 3.15% to 1,748.12, Straits Times increased 14.77 points or 0.44% to 3,384.67, KOSPI Composite added 3.09 points or 0.16% to 1,968.80 and Taiwan Weighted was up by 30.32 points or 0.37% to 8,165.35.

Japanese market is shut for the trade today on account of Children’s Day.