Markets off intraday highs; continue to trade in green

Indian equity benchmarks pared some of their gains in the late afternoon session as profit booking emerged at higher levels. Selling in reality, power and tech stocks too weighed down on sentiments. However, the benchmarks continued to trade above their crucial 5,850 (Nifty) and 19,500 (Sensex) level amid buying in Oil and Gas, FMCG and banking stocks as investors hoped that government's recent moves like gas and diesel price hike will benefit the domestic economy in the long term. Further, sentiments also remained upbeat after the European Central Bank and the Bank of England assured to keep interest rates low for an extended period to support growth. Market sentiments were also buoyed as foreign institutional investors (FIIs) bought shares worth a net Rs 164.56 crore on July 4, 2013. Firm trade in Asian markets also added to the optimistic sentiments.

The BSE Sensex is currently trading at 19510.17, up by 99.33 points or 0.51% after trading in a range of 19640.27 and 19491.69. There were 17 stocks advancing against 13 declines on the index. The market breadth on BSE was positive in the ratio of 1155: 1070, while 125 scrips remain unchanged. 

The broader indices were too trading mixed; the BSE Mid cap index was down by 0.01% while the Small cap index was up by 0.22%. The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.10%, FMCG up by 0.93%, Bankex up by 0.31%, IT up by 0.19% and Capital Goods up by 0.18%, while Realty down by 0.51%, Power down by 0.31%, Consumer Durables down by 0.25%, Teck down by 0.22% and Metal down by 0.09% were the only losers on the BSE.

In scrip specific movement, Jindal steel, ONGC, HDFC bank and reliance were trading over 1.5 percent higher, while Bharti airtel, Gail India and Mahindra and Mahindra were trading lower.

The top gainers on the Sensex were Jindal Steel up by 2.29%, ONGC up by 2.07%, HDFC Bank up by 1.72%, RIL up by 1.56% and Hindustan Unilever up by 1.25%. On the flip side, Bharti Airtel down by 2.14%, Gail India down by 1.80%, Mahindra & Mahindra down by 1.21%, Hindalco Industries was down by 1.20% and Sterlite Industries down by 0.54% were the top losers on the Sensex.

Meanwhile, Finance Minister P Chidambaram has said that concerns of power and fertiliser sector will be addressed before the implementation of decision of natural gas price hike in April 2014. Chidambaram has already stated that only the price payable to producers has been fixed now and input rates for power and fertiliser have not been decided. He further stated that gas-based power plants represented a very small fraction of the total power capacity and oil ministry has asked power and fertilizer ministries to indicate the affordable gas price.

These two sectors have expressed their concern over the recent, government decision of doubling natural gas prices from the present $4.2 per million British thermal unit (mbtu) to $8.4 per mbtu from April 1, 2014. While, the Power Ministry wanted price to be maintained at the existing $4.2 per mBtu, the Fertiliser Ministry was ready to accept $6.7 per mBtu mooted by the Ministry of Petroleum and Natural Gas (MPNG). The new price which will be applicable to all public and private sector producers alike, will likely result in rise in power tariffs and fertilizer cost.

Hike in gas price is likely to increase production cost of urea by around Rs 6,300 per ton, the Government controls MRP of urea at a low level and has been absorbing the increase in form of subsidy. Fertiliser subsidy has surged to Rs 1,02,207 crore in 2012-13. Similarly, the impact on power sector too would be incredible with state electricity boards already having a cumulative loss of over Rs 200,000 crore.

However, the move to raise gas prices is expected to benefit the government by around $2.2 billion incremental revenue by way of higher taxes. Further, the government can use high profit share to subsidize gas supply to the core sector. Oil minister M V Moily has said that the move will help bring gas production over 3 Trillion cubic feet of gas reserves that had been declared economically unviable at current rates of $ 4.2 per mbtu. 

The CNX Nifty is currently trading at 5,860.85, up by 23.90 points or 0.41% after trading in a range of 5,900.45 and 5,858.45. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were IDFC was up by 3.79%, ONGC up by 2.02%, Jindal Steel up by 1.91%, JP Associate up 1.81% and HDFC Bank up by 1.72%. On the flip side, GAIL down by 2.13%, Bharti Airtel down by 2.04%, DLF down by 1.62%, Hindalco down by 1.40% and BPCL down by 1.28% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.05%, Hang Seng surged 1.89%, Jakarta Composite jumped 0.46%, KLSE Composite increased 0.05%, Nikkei 225 soared 2.08%, Straits Times added 0.83% and Taiwan Weighted was up by 1.37%. On the flip side, KOSPI Composite was down by 0.32%.

Most of the European markets were trading in red with, Germany’s DAX down by 0.07% and France’s CAC 40 down by 0.14%, while the United Kingdom’s FTSE 100 up by 0.12%,