Benchmarks trade in fine fettle ahead of RBI policy review

After witnessing sharp fall in last two sessions, Indian equity benchmarks are trading in fine fettle in early deals on Tuesday, ahead the Reserve Bank of India’s (RBI) third quarter monetary policy review later in the day. Some support also came in after the government allaying investors worry over declining value of the rupee and falling stock markets said that country’s economic fundamentals are ‘very strong’ and there is no cause for concern. Though, gains on the up-side remained capped on report that foreign institutional investors (FIIs) sold shares worth a net Rs 1334.21 crore on January 27, 2014.

On the global front, Asian shares recovered to turn marginally positive after slipping to near five-month lows in early trades, as turmoil in emerging markets and concerns about an economic slowdown in China took their toll. However, the US markets continued their weakness and ended modestly lower in last session on lingering concerns about emerging markets as well as the likelihood of further tapering by the Federal Reserve.

Back home, on the sectoral front, realty witnessed the maximum gain in trade followed by capital goods and banking, while fast moving consumer goods, technology and software remained the top losers on the BSE sectoral space. The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 927 shares on the gaining side against 476 shares on the losing side while 80 shares remain unchanged.

The BSE Sensex opened at 20721.17; about 14 points higher compared to its previous closing of 20707.45, and touched a high and a low of 20775.74 and 20714.22 respectively.

The index is currently trading at 20770.40, up by 62.95 points or 0.30%. There were 23 stocks advancing against 7 declines on the index.

The overall market breadth has made a strong start with 62.51% stocks advancing against 32.10% declines. The broader indices too were trading mixed; the BSE Mid cap index down was by 0.71% and Small cap gained 0.73%. 

The top gaining sectoral indices on the BSE were, Realty up by 1.73%, Capital Goods up by 1.09%, Bankex up by 1.07%, PSU up by 0.93% and Oil & Gas up by 0.87%, while FMCG down by 0.81%, Teck down by 0.46% and IT down by 0.44% were the top losers on the sectoral index.

The top gainers on the Sensex were Coal India up by 1.45%, SBI up by 1.28%, Tata Motors up by 1.27%, Axis Bank up by 1.25% and Cipla up by 1.14%. On the flip side, Hindustan Unilever was down by 2.27%, ITC was down by 1.09%, Infosys was down by 0.90%, Hindalco Inds was down by 0.72% and  Tata Power was down by 0.69% were the top losers on the Sensex.

Meanwhile, India's crude oil production rose by 1.6 percent to 3.25 million tonnes (MT) in December 2013 from 3.20 MT in the same month of last year, on the back of higher output from Cairn India's Rajasthan oilfields helping to offset the drop in production from state-owned Oil and Natural Gas Corp (ONGC) fields. ONGC’s crude oil production declined by around 3 percent to 1.88 MT in December from 1.94 MT recorded in same month of previous year. On the other hand, Cairn India's oil output soared by around 16 percent to 0.83 MT.

Indian natural gas production dipped by 9.9 percent to 3,001 million cubic meters in the month as Reliance Industries' KG-D6 field reported 35.8 percent drop in offshore natural gas output to 672 million cubic meters. RIL's domestic refinery at Jamnagar recorded 11.9 percent drop in fuel output in December due to a planned maintenance shutdown. Country’s overall fuel production from 22 domestic refineries declined by 1.7 percent 18.63 MT in December’ 2013 from 18.95 MT petroleum products produced in December’ 2012.

As India’s oil and gas demand has been increasing at robust pace, it has become imperative to enhance the country’s oil and gas production. Oil ministry has formulated a roadmap for cutting India's dependence on imports to meet its oil and gas needs. India currently imports around 80 percent of its oil needs and the Ministry wants this to be cut to 50 percent by 2020 and by 25 percent in 2025 through intensive exploration and exploitation of untapped reserves.

Oil Minister M V Moily has also announced setting up of a Multi-Organisational Team (MOT) to re-examine India’s hydrocarbon resources in all 26 sedimentary basins in the country. India will offer at least 46 oil and gas blocks soon under the 10th round of NELP auction under completely revamped terms. Tenth round of NELP auction will be the second highest offering of blocks since the advent of NELP in 1997, a common platform for public and private sector companies to bid for the blocks.

The CNX Nifty opened at 6,131.85; about 4 point lower as compared to its previous closing of 6,135.85, and has touched a high and a low of 6,157.65 and 6,130.90 respectively. The index is currently trading at 6,150.75, up by 14.90 points or 0.24%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 2.93%, Bank of Baroda up by 2.58%, DLF up by 2.33%, PNB up by 2.20% and JP Associate up by 1.87%. On the flip side, Hindustan Unilever down by 2.25%, ITC down by 1.11%, Infosys down by 0.92%, Hindalco down by 0.81% and Tata Power down by 0.69% were the top losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 1.56 points or 0.08% to 2,034.86, Hang Seng increased 20.05 points or 0.09% to 21,996.15, Jakarta Composite jumped 18.50 points or 0.43% to 4,341.28, Nikkei 225 surged 31.39 points or 0.21% to 15,037.12, Straits Times added 7.05 points or 0.23% to 3,049.48 and Seoul Composite was up by 5.14 points or 0.27% to 1,915.48.