Benchmarks trade higher snapping five days losing streak

Snapping five days of continuous fall, Indian equity benchmarks made a positive start and are trading with a gain of over half a percent, tracking firm global cues. The US markets ended higher amid expectations that Federal Reserve will keep policy loose even after deciding to taper its asset purchases in its upcoming monetary policy scheduled on Dec17-18. Moreover, most of the Asian equity markets were trading in the green at this point of time tailing US cues and the Japanese market has taken the lead as yen weakened against dollar.

Back home, sentiments also remained up-beat after India Inc has raised hopes that spurt in inflation to a 14-month high of 7.52 percent in November should not come in the way of the Reserve Bank's formulating an accommodative monetary policy and has said that high interest rates at this stage may only worsen the industrial slowdown and not help ease inflation. However, gains remained capped as investors remained little cautious ahead of Reserve Bank of India’s (RBI) mid-quarter review of monetary policy for 2013-14, slated to be released on December 18, 2013.

All the sectoral indices on the BSE were trading in the green with Auto and Healthcare segments gaining the most. Realty, capital goods, technology, software and power too were trading with significant gains. The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 823 shares on the gaining side against 334 shares on the losing side while 56 shares remain unchanged.

The BSE Sensex opened at 20732.44; about 72 points higher compared to its previous closing of 20659.52, and has touched a high and a low of 20784.03 and 20732.44 respectively. The index is currently trading at 20767.37, up by 107.85 points or 0.52%. There were 23 stocks advancing against just 6 declines and one stock remains unchanged on the index.

The overall market breadth has made a strong start with 67.94% stocks advancing against 27.41% declines. The broader indices too were trading in green; the BSE Mid cap index up by 0.70% and Small cap index up 0.60%. 

The top gaining sectoral indices on the BSE were, Auto up by 1.1%, Healthcare up by 1%, Realty up by 0.90%, Capital Goods up by 0.75% and Teck up by 0.71%, while there were no losers on the sectoral index.

The top gainers on the Sensex were Cipla up by 2.69%, Tata Power up by 1.97%, Jindal Steel up by 1.84%, BHEL up by 1.77% and ICICI Bank up by 1.75%. On the flip side, HDFC Bank was down by 1.88%, Coal India was down by 1.22%, NTPC was down by 0.83%, Gail India was down by 0.46% and Tata Steel was down by 0.18% were the top losers on the Sensex.

Meanwhile, concerned over acute liquidity crunch faced by the Indian fertiliser sector, the Fertiliser Ministry has sought an additional Rs 10,000 crore from the government as the Department of Fertiliser (DoF) did not get funds under the first supplementary grants and second supplementary grants would be made available only in December. So far this fiscal, the government has allocated Rs 70,586 crore funds to Department of Fertiliser (DoF) as against the total demand of Rs 1,05,497 crore for the 2013-14 fiscal. Commodity wise, a subsidy of Rs 41,158.85 crore was allocated for urea and Rs 29,426.88 crore for P&K fertilisers. The DoF has been able to pay subsidy dues till May to fertiliser firms manufacturing urea locally, while for non-urea fertilizers, it can pay subsidy only till this month.

Non-allocation of subsidy fund to fertilizer industry on time has left it with no money to pay subsidy bills for the third and fourth quarters of the financial year ending in March 2014. IFFCO, country's largest producer of urea, may witness decline in its profitability by 50 per cent in the current financial year due to a pending subsidy payment of about Rs 4,500 crore, while, state-run National Fertilisers Ltd (NFL) and Madras Fertilisers Ltd (MFL) could face closure by the end of this month due to liquidity crisis.

Earlier in September, the Finance ministry had agreed to pay only Rs 5,500 crore subsidy under a special banking arrangement (SBA) as against Rs 12,000 crore sought by the Department of Fertilisers (DoF). Meanwhile, in order to boost the fertilizer sector, the government has taken measures. The government agreed to bear interest of 8 per cent per annum with 2.7 per cent interest to be borne by the industry. Furthermore, it is also considering an additional Rs 10,000 crore more under the special banking arrangement against the subsidy due for the current year. Regarding the gas availability to fertilizer sector, the government has recently stated that the gas allocation policy will be revised to remove the cap imposed on the supply of domestic gas to fertiliser sector and accorded priority for gas utilisation policy 2008 in order to make new investments in the sector.

The CNX Nifty opened at 6,178.20; about 23 point higher as compared to its previous closing of 6,154.70, and has touched a high and a low of 6,190.55 and 6,176.50 respectively.

The index is currently trading at 6,185.30, up by 30.60 points or 0.50%. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were Cipla up by 3.03%, Ranbaxy up by 2.45%, Jindal Steel up by 2.09%, JP Associate up by 2.05% and BHEL up by 1.87%. On the flip side, HDFC Bank down by 2.18%, Coal India down by 1.31%, Power Grid down by 0.96%, NTPC down by 0.72% and BPCL down by 0.69% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 69.90 points or 0.30% to 23,184.56, Jakarta Composite jumped 52.85 points or 1.28% to 4,178.81, KLSE Composite strengthened 9.04 points or 0.49% to 1,846.92, Nikkei 225 surged 101.21 points or 0.67% to 15,254.12, Straits Times increased 17.21 points or 0.56% to 3,070.98, Seoul Composite added 5.04 points or 0.26% to 1,966.19 and Taiwan Weighted was up by 55.03 points or 0.66% to 8,368.90.

On the flip side, Shanghai Composite was down by 12.80 points or 0.59% to 2,148.06.