Benchmarks soar to day’s high on short covering ahead of F&O expiry

Indian equity markets, building on early gains are trading near day’s high point, largely on the back of covering-up of pending position by participants on the final session of F&O expiry. Adding gains of quarter of a percent, both Sensex and Nifty are increasingly inching closer to 21,100 and 6,300 psychological levels respectively. However, broader indices are outdoing their larger peers, with both Midcap and Smallcap indices trading higher with gains of close to a percent.

Some support has also been rendered to the markets by firm Asian counterparts. In the global market, taking seasonal cheer from US market, Asian pacific shares are mostly trading upbeat, with Nikkei 225 speeding to six years peak, after Wall Street rang up more records and upbeat US spending data burnished the outlook for the global economy, even as benign inflation left gold on course for its worst year in over two decades.

Closer home, amidst across the board-buying activities, none of the sectoral indices were losers, however stocks from Consumer Durable, Public Sectoral Undertaking (PSU) and Power counters outperformed. All PSU Oil Marketing Companies’ (OMC) were trading cheerful on hopes of higher hike in diesel prices than the current 50 paise per litre per month. According to reports, the oil & gas ministry is chalking out a new subsidy-sharing mechanism in line with Kirit Parikh recommendation and will move a Cabinet note for the same. The market breadth on BSE was positive, out of 1871 stocks traded, 1316 stocks advanced, while 463 stocks declined on the BSE. 

The BSE Sensex is currently trading at 21084.63 up by 51.92 points or 0.25% after trading in a range of 21095.87 and 21051.00. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.00%, while Small cap index up by 1.30%.

The gaining sectoral indices on the BSE were Consumer Durable up by 1.46%, PSU up by 1.21%, Power up by 1.12%, Capital Goods up by 0.74% and Healthcare up by 0.63%. while there were no losers on the sectoral space.

The top gainers on the Sensex were ONGC up by 2.42%, Tata Power up by 2.32%, Sun Pharma up by 1.12%, Bharti Airtel up by 1.08% and BHEL up by 0.96%. On the flip side, Hero MotoCorp down by 0.63%, HDFC down by 0.50%, RIL down by 0.30%, ICICI Bank down by 0.29% and Hindalco Industries down by 0.08%.

Meanwhile, amid rising concerns over the slowing down of India’s exports' growth to 6 percent in November from double digit growth witnessed in the past few months, Commerce and Industry Minister Anand Sharma has asserted that ban on mining by the Supreme Court has been impacting country’s exports particularly iron ore, besides, has also increased India's dependence on imported coal. The Supreme Court had banned iron ore mining in Goa in October 2012 and in Karnataka in July-August 2011.

Highlighting that India could substantially earn by exporting around 100 million tonnes of iron ore, Minister added that the country has been deprived of foreign exchange which it would have earned by ore exports. Furthermore, owing to the mining ban, shipments of iron ore plunged to 18 million tonnes in 2012-13 from nearly 168 million tonnes in 2010-11. On the other hand, coal imports bill has increased to $22 billion, reflecting need for serious assessment, he added. Despite the world's fifth largest in terms of reserves and third-largest producer of coal, India's domestic output has failed to keep pace with demand over the past few years. Coal production with weightage of 4.38% in IIP index declined by 3.9% in October, 2013 over the same period of corresponding period. Presently, Coal India is the only producer of domestic coal, which is also struggling to meet domestic requirement. Acute coal shortages in the country have become primary reason for power deficit in the country as coal-fired plants account for 57% of India's installed electricity capacity.

The mining sector, having around 14 percent weight in Index of Industrial Production (IIP), witnessed a contraction of 2.7 percent during April-October’2013 as against a dip of 1 percent in the same period last fiscal. In coming future, mining sector is likely to remain under pressure because of various mining restrictions.

The CNX Nifty is currently trading at 6,285.95 up by 17.55 points or 0.28% after trading in a range of 6,289.45 and 6,270.05. There were 39 stocks advancing against 11 declining on the index.

The top gainers of the Nifty were BPCL up by 3.02%, Tata Power up by 2.32%, ONGC up by 2.12%, JP Associates up by 1.29% and Bharti Airtel up by 1.23%. On the flip side, Power Grid down by 0.71%, Reliance Industries down by 0.53%, Hero MotoCorp down by 0.41%, HDFC down by 0.37% and NMDC down by 0.36% were the major losers on the index.

Most of the Asian equity indices were trading in green; KLSE Composite rose 0.24%, Nikkei 225 strengthened 0.92%, Straits Times increased 0.25%, and Taiwan Weighted was up by 0.22%. On the flip side, Seoul Composite down by 0.04% and Shanghai Composite was down by 1.34%. Hong Kong and Indonesian markets remained shut for the trade today for Christmas Holidays.