Benchmarks bounce off from day’s low; Nifty trades above 6100

Bouncing off day’s lows, benchmark equity indices have recouped some lost ground on account of buying in Information Technology (IT), Fast Moving Consumer Goods (FMCG) and Health Care (HC) counters. Further, recovery in Banking and Power counters, too have aided markets in gaining some ground. Benchmark 30 share index Sensex, gaining over 50 points, has crept past psychological 20150 level, while 50 share index, Nifty too adding close to 15 points, is comfortably cruising past 6100 level. Meanwhile, broader indices have capitulated to selling pressure and are trading with loss at this point of time. However, a cautious start of European markets could limit the gains of bourses going further in the day. European counterparts have got off to a flat start ahead of European Union leaders meet and US data that may show sales of existing homes climbed to a three-year high in April.

Closer home, Oil & Gas, Realty and Public Sector Undertaking (PSU) counters continued to bleed in red. Oil Marketing Companies stocks have come under pressure as the Competition Commission of India (CCI) has started investigation into alleged cartelisation by oil marketing companies in fixing petrol prices. Meanwhile, the stocks are also trading downbeat on reports which suggest of new pricing for petrol and diesel to reduce the fuel prices by anywhere between Rs. 1- 2 a litre each. Nevertheless, Information Technology continues to underpin bourses on weaker rupee. The overall market breadth on BSE is in the favour of declines which have outpaced advances in the ratio of 1105:998; while 127 shares remained unchanged.

The BSE Sensex is currently trading at 20164.86, up by 53.25 points or 0.26% after trading in a range of 20,220.35 and 20124.98. There were 20 stocks advancing against 10 declines on the index.

The broader indices have capitulated to selling pressure; the BSE Mid cap and Small cap index were trading down by 0.07% and 0.03% respectively.

The top gaining sectoral indices on the BSE were, TECk and IT were up by 0.87%, FMCG up by 0.85%, Health Care up by 0.80% and Consumer Durable up by 0.77%, while Oil & Gas down 1.63%, Realty down by 1.30%, PSU down by 0.45%, were the top losers on the BSE.

The top gainers on the Sensex were Sun Pharma up by 3.03%, Dr Reddys Lab up by 2.28%, Coal India up by 1.84%, Bharti Airtel up by 1.64% and Tata Motors up by 1.26%.

On the flip side, ONGC down by 2.09%, RIL down by 1.06%, Gail India down by 0.92%, HDFC Bank was down by 0.85 and Sterlite Industries down by 0.73% were the top losers on the Sensex.

Meanwhile, Finance Minister P Chidambaram has said that competition regulation must not become another bureaucracy, stifling growth. Chidambaram has said that ‘Competition Commission of India (CCI) must be a lean organization, picking the issues it can weigh on carefully and making a difference when it does’. The ruling of the CCI must be transparent and afford clarity rather than obscurity.

The Finance Minister was of opinion that the CCI can play important role to boost sectors’ growth by keeping an eye on the benefits of competition coming from new technologies, entrants or new sectors and will ensure that the public is well served. Also, the CCI should also regulate the sectors in these matters, which is very difficult and fraught with legal difficulties. 

By adding further, finance minister said that a key issue for any competition authority is to prevent predatory behavior, which is sometime hard to distinguish from pro-consumer behavior and therefore require careful research based on the Indian experience and economic thought and experience elsewhere. The Competition Commission must develop a body of work that allows it to address these issues. The Competition Commission will play an important part in defining the role of the government as a regulator of competition and as a participant in the competitive process.

The CNX Nifty is currently trading at 6,125.60, up by 11.50 points or 0.19% after trading in a range of 6,147.60 and 6,113.75. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 3.17%, Dr Reddy up by 2.18%, Bharti Airtel up by 1.82% Coal India up by 1.76% and Jindal Steel up by 1.47%.

On the flip side, BPCL down by 5.21%, DLF down by 3.13%, ONGC down by 2.80%, JP Associate down by 2.60% and Cairn India down by 1.40% were the major losers on the index.

Most of the Asian equity indices were trading in green; Jakarta Composite increased 0.55%, KLSE Composite surged 0.34%, Nikkei 225 soared 1.60%, Straits Times jumped 0.36%, KOSPI Composite added 0.64% and Taiwan Weighted was up by 0.19%.  On the flip side Shanghai Composite was down by 0.12% and Hang Seng declined by 0.55%.

European markets got off to a negative start; with CAC 40 declining by 0.10%. DAX shedding 0.14%  and FTSE 100 trimming 0.14%.