Benchmarks retreat from day’s high; continue to trade with gains of over half a percent

Benchmark equity indices, after rising to three years’ high level in early deals and retreating thereon, continue to trade on a pleasant note on persistent buying and retail investors tailing a positive start of European markets and strong appreciation of Indian currency against dollar. On the global front, receiving positive hand-over from Asian pacific shares, European market has bounced back towards five-year highs in early trading on Thursday, with a survey showing a pick-up in manufacturing activity in China cheering investors. Closer home, while, Sensex is trading below the psychological 20,900 level, Nifty is holding above the crucial 6,200 mark, with gains of over half a percent.  Meanwhile, broader indices too are trading neck and neck to larger peers. Decline of stocks from Information Technology and Technology counters on account of Rupee’s depreciation, is mainly tempering with bourses’ gains. Additionally, losses of Healthcare sector also seem to be weighing on the sentiment. However, stocks from Consumer Durable, Banking and Capital Goods counters are the major pillars of strength for markets.  The overall market breadth on BSE is in the favour of advances which have thumped advances in the ratio of 1212:995; while 149 shares remained unchanged.

The BSE Sensex is currently trading at 20893.40, up by 125.52 points or 0.60% after trading in a range of 21039.42 and 20750.98. There were 22 stocks advancing against 8 declines on the index.

The broader indices were trading neck-and-neck to the benchmarks; the BSE Mid cap index was up by 0.76%, while Small cap index gained 0.46%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.42%, Bankex up by 1.23%, Capital Goods up by 1.21%, Auto up by 0.92% and Oil& Gas was up by 0.79%. On the other hand IT down by 0.72% , Teck down by 0.45% and Healthcare down by 0.14%, were the only losing indices on BSE.

The top gainers on the Sensex were M&M up by 2.27%, Bharti Airtel up by 2.06%, ONGC up by 1.6%, ICICI Bank up by 1.61%, and Tata Motors up by 1.60%. On the flip side, Wipro down by 1.95%, Coal India down by 1.40%, TCS down by 1.07%, Dr Reddy’s down by 0.78% and Hindalco Industries down by 0.78% were the major losers on the Sensex.

Meanwhile, in a major development, Petroleum Ministry has allowed private upstream companies like Reliance Industries and Cairn India to start producing oil and gas from discoveries even before securing approval for field investment plans. To enable monetization of the finds contained with an already producing area, Oil Minister M Veerappa Moily approved 5-page guidelines for production and development of oil and gas discoveries.

As per the guidelines approved, each company will be allowed the option to submit an integrated development plan (IDP) encompassing multiple new discoveries. Presently, every discovery is treated as a separate factory and operators are required to first get approval for commercial viability and then seek approval for an investment plan, called a field development plan (FDP).

However, now the Ministry has permitted submission of declaration of commerciality (DOC) and FDP/IDP together by subsuming DOC within the FDP/IDP. Further while, the cases with single discovery will be termed as FDP and cases of multiple discoveries will be termed as IDP.

Thus, with these new guidelines, the contractor, for early monetisation of new discoveries in a mining lease (or producing) areas, may be allowed by the Management Committee (MC) to produce hydrocarbons from the notified new discoveries, pending approval of FDP/IDP. However, this will be subjected to condition that the contract has taken approval of the MC for the annual work programme, budget and program quantity for such new discoveries. Additionally, recovery of all costs associated with new recoveries pending approval of FDP/IDP, despite their inclusion in the annual work program and budget, will not be permitted.

The CNX Nifty is currently trading at 6,217.20, up by 38.85 points or 0.63% after trading in a range of 6,252.45 and 6,162.60. There were 39 stocks advancing against 11 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 3.12%, Bank of Baroda up by 3.02%, NMDC up by 2.53%, M&M up by 2.40% and PNB up by 2.29%. On the flip side, HCL Tech down by 2.83%, Wipro down by 2.02%, Coal India down by 1.93%, Ambuja Cement up by 1.35% and TCS down by 1.11% were the major losers on the index

The Asian markets are mostly in green; Jakarta Composite rose by 0.67%, Nikkei 225 was up by 0.24%, KLSE Composite was up by 0.28%, Straits Times gained 0.06%, Seoul Composite added 0.54% and Taiwan Weighted was up by 0.24%.  On the flip side, Shanghai Composite was down by 1.05% and the Hang Seng lost 0.84%.

European markets have got off to positive start; with CAC 40 trading higher by 0.29%, DAX rising by 0.56% and FTSE 100 gaining 0.23%.