Benchmarks maintain positive trend ahead of inflation data

Benchmarks continue to maintain the positive trend on emergence of buying by funds and retail investors tracking positive cues from other Asian bourses following overnight gains at the US market on strong retail data mainly influenced the trading sentiments here. Traders were eyeing December wholesale price inflation to be announced today which is seen at 7% and considered to be key ahead of the Reserve Bank of India (RBI)'s rate review on January 28. Retail prices rose an annual 9.87% last month, slower than expected, as vegetable prices fell, giving some relief to policymakers struggling to contain price pressures as growth hovers at a decade low.

On the global front, most of the Asian equity benchmarks were trading in the green at this point of time with the Nikkei bouncing by over one and a half percent after suffering its sharpest daily drop in five months on Tuesday. Back home, traders were buying, Metal, Bankex and Capital Goods while, selling was seen in FMCG on the BSE. The market breadth on BSE remains positive with advances to declines in the ratio of 1145:648. BSE Sensex and NSE Nifty were comfortably trading near their psychological 21,200 and 6,250 levels respectively. The BSE Sensex is currently trading at 21211.41 up by 178.53 points or 0.85% after trading in a range of 21221.91 and 21091.46. There were 28 stocks advancing against 2 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.33% and Small cap index gained 0.68%.

The top gaining sectoral indices on the BSE were, Metal up by 1.65%, Bankex up by 0.97%, Capital Goods up by 0.96%, Teck up by 0.90% and  IT up by 0.90% and while FMCG down by 0.18% was the only loser on the sectoral index.

The top gainers on the Sensex were Hindalco Industries up by 2.74%, Coal India up by 1.98%, Cipla up by 1.87%, SSLT up by 1.79% and Hero MotoCorp up by 1.60%. On the flip side, Axis Bank was down by 0.46% and ITC was down by 0.09% were the only losers on the Sensex.

Meanwhile, Concerned over the rising coal imports in the country, Economic Affairs Secretary Arvind Mayaram underscored that the government is taking steps in order to improve domestic supplies for reducing coal imports, which account for a substantial amount of the country’s current account deficit (CAD). 

Despite being 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 the internal demand over the past few years. At present, Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Australia, Indonesia and South Africa. In the previous fiscal, India imported $16 billion worth of coal.

During the first six months of current fiscal, the import of coal, coke and briquette, among others touched $7.8 billion mark. Therefore, it has become important for the country to enhance domestic coal supplies. Meanwhile, the domestic demand for imported coal is expected to rise further as the government is approving many thermal power projects. Acute coal shortages in the country has become primary reason for power deficit in the country as coal-fired plants account for 57% of India's installed electricity capacity.

Currently, Coal India is the only producer of domestic coal, which is also struggling to meet domestic requirement. Meanwhile, in order to meet India’s growing coal demand, the government has planned to invite bids from private players to start coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India. The government is expected to auction 10 coal blocks in the month of March next year.

The CNX Nifty is currently trading at 6,294.75 up by 52.90 points or 0.85% after trading in a range of 6,298.85 and 6,265.30. There were 45 stocks advancing against 5 stock declines on the index.

The top gainers of the Nifty were Hindalco up by 3.06%, Coal India up by 2.56%, NMDC up by 2.17%, SSLT up by 1.69% and ICICI Bank up by 1.61%. On the flip side, Cairn down by 0.77%, Ranbaxy down by 0.69%, Lupin down by 0.48%, ITC down by 0.46%, and Axis Bank down by 0.27% were the only losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 71.38 points or 0.31% to 22,862.66, Jakarta Composite surged 41.18 points or 0.94% to 4,431.96, Nikkei 225 soared 344.84 points or 2.24% to 15,767.24, Straits Times increased 18.99 points or 0.61% to 3,142.74, Seoul Composite added 5.20 points or 0.27% to 1,951.27 and Taiwan Weighted was up by 67.07 points or 0.78% to 8,615.21. On the flip side, Shanghai Composite declined 12.74 points or 0.63% to 2,014.10 and KLSE Composite was down by 5.89 points or 0.32% to 1,829.08.