Benchmarks pare initial gains in late morning

Benchmarks have pared initial gains in late morning. Sentiments got dampened as RBI Governor Raghuram Rajan warned of a breakdown in global policy coordination after the Federal Reserve cut stimulus, further weakening the emerging-market currencies. The investors also remained on sidelines ahead of fiscal deficit data for the April-December period and first revised GDP data for the fiscal year that ended in March 2013, scheduled to be announced later in the day. On the global front, the US markets rebounded in last session and the major indices recovered on getting report that despite slowing, US economic growth matched estimates. Also there were lots of good earnings supporting the markets. With most of the markets in the region close for Lunar New Year holiday, the mood is quite cautious in the Asian region. Japanese Nikkei, reversing all its gains, was trading in the red despite reporting some strong earnings. 

Back home, traders were buying, Realty, IT and Metal while, selling was seen in Auto, Power and FMCG on the BSE. Bank stocks remained on buyers’ radar after the Reserve Bank of India (RBI) on January 30, 2014 laid out a road map to deal with a surge in bad loans in the banking system. The market breadth on BSE remains positive with advances to declines in the ratio of 1215: 518. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,500 and 6,000 levels respectively.

The BSE Sensex is currently trading at 20530.31 up by 32.06 points or 0.16% after trading in a range of 20572.32 and 20478.54. There were 19 stocks advancing against 11 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 1.03% and Small cap index gained 1.19%.

The top gaining sectoral indices on the BSE were Realty up by 1.72%, IT up by 1.18%, Metal up by 1.15%, Capital Goods up by 0.88% and Healthcare up by 0.40%. While, Auto down by 0.37%, Power down by 0.33%, and FMCG down by 0.05% were the only losers on the BSE. 

The top gainers on the Sensex were Mahindra & Mahindra up by 2.90%, TCS up by 2.04%, Tata Steel up by 1.99%, SSLT up by 1.26% and L&T up by 1.17%. On the flip side, NTPC was down by 2.89%, Tata Motors was down by 2.81%, Hero MotoCorp was down by 1.16%, HDFC was down by 1.09% and Bajaj Auto was down by 0.91% were the top losers on the Sensex.

Meanwhile, giving some respite to Indian households, the government has raised the quota of subsidised cooking gas to 12 cylinders from 9 per household in a year. The move will cost Rs 5,000 crore   annually for the government as an additional subsidy. Further, the government cleared that domestic households can get one extra cylinder on top of currently implemented scheme for 9  subsidised cylinders for the months February and March. Consumers will be entitled for 12  subsidised cylinders scheme from the next fiscal year beginning April.

At present, 89.2 percent of the 15 crore Indian LPG consumers use up to 9 cylinders in a year and only 10 per cent have to buy the additional requirement at the market price. With the implementation of 12 subsidised cylinders scheme, about 97 percent of the LPG consumers would be covered by this scheme.

However, the government suspended its ambitious direct benefit transfer for LPG (DBTL) to pay LPG subsidy in cash to consumers directly amid rising complains of not getting the benefit of this scheme in absence of either an Aadhaar card or a bank account linked Aadhaar. Earlier, the scheme was touted by the government as game-changer as it plugged distractions and helped subsidy to reach the intended beneficiaries. So far, the DBTL scheme has been implemented in country’s 289 districts in 18 states and provides cash of Rs 435 to consumers in their bank accounts so that they could buy cooking gas at market rate. Meanwhile, the government has decided to set up a committee which will review only the implementation of DBTL. After the suspension of DBTL scheme, the government will pay subsidy to oil companies as was practice earlier and consumer will get subsidised cooking gas from these companies.

The CNX Nifty is currently trading at 6,085.50 up by 11.80 points or 0.19% after trading in a range of 6,097.30 and 6,068.35. There were 36 stocks advancing against 14 stock declines on the index.

The top gainers of the Nifty were M&M up by 2.89%, TCS up by 2.09%, Tata Steel up by 2.05%, DLF up by 1.82% and NMDC up by 1.62%. On the flip side, NTPC down by 3.04%, Tata Motors down by 2.96%, Asian Paint down by 1.31%, HDFC down by 1.19%, and Hero Moto Company down by 1.01% were the top losers on the index.

In Asia, Nikkei 225 was down by 125.84 points or 0.84% to 14,881.22. Markets in Hong Kong, Shanghai, Taiwan, Singapore, Malaysia, South Korea and Indonesia are all closed for Lunar New Year holiday.