Indian equity benchmarks extended their early gains and were trading near their intra-day high level amid firm global cues and buying witnessed in IT, consumer durables and teck stocks. Investors were also seen piling up positions in frontline blue chip stocks such as Tata Motors, Tata Steel and TCS among others. However, power and realty stocks were witnessing selling as traders also remained cautious as the latest emerging market consumer survey by Credit Suisse has ranked India at fifth position in terms of consumer confidence and highlighted that optimism level in India slipped four percentage points over last year. On stock specific movement, Tata Motors, Tata Steel and TCS were trading up by over 1.20%, while, Bharti Airtel, Hindalco Inds and Hero Moto Corp were trading down by over 1.50% on BSE.
Bharat Forge was up by around 5% at Rs 365 as the company has announced plans to merge two of its subsidiaries. Manappuram Finance has surged at around 8.47% to nearly Rs 23 after rating outlook on the company's debt exposure was revised upwards by CRISIL. Deepak Nitrite, extending its 6.5% rally in past two trading sessions, has surged around 8% to Rs 352, after reporting a strong operational performance for Q3FY14.
On global front, Asian equity indices were trading in green with Seoul Composite up by 0.46%, and Jakarta Composite up by 0.31%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,050 and 20,400 levels respectively. The market breadth on BSE was positive, out of 2,154 stocks traded, 1,085 stocks advanced, while 956 stocks declined on the BSE.
The BSE Sensex is currently trading at 20,410.02 up by 75.75 points or 0.37% after trading in a range of 20,443.35 and 20,353.41. There were 17 stocks advancing against 13 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.31%.
The gaining sectoral indices on the BSE were IT up by 1.27%, Consumer Durables up by 0.99%, Teck up by 0.96%, Auto up by 0.70% and Bankex up by 0.58%. While, Power down by 0.51%, Realty down by 0.31%, Oil and Gas down by 0.18% and Healthcare down by 0.11% were the losing indices on BSE.
The top gainers on the Sensex were Tata Motors up by 2.93%, Tata Steel up by 1.74%, TCS up by 1.23%, ICICI Bank up by 1.05% and Infosys up by 1.03%. On the flip side, Bharti Airtel down by 1.92%, Hindalco Inds down by 1.64%, Hero Moto Corp down by 1.50%, Cipla down by 1.26% and NTPC down by 1.22%.
Meanwhile, Amid concerns over rising natural gas prices and scarcity of gas for power plants, Power Ministry has sought a subsidy of Rs 5,000 crore over the next two years to support state distribution companies, as they will have to pay double for natural gas prices from April 1.
Earlier, in June’13, the government had approved Rangarajan Committee formula for pricing of all domestically produced gas at an average of international hub rates and cost of imported LNG. Such averaging pricing will raise the effective gas price to $11.43 per million British thermal unit (mmBtu) from $4.2 per mmBtu, leading to cost of electricity generation of around Rs 10.47 per unit. The power ministry has then said that gas based power stations would need to be supported by the government through an appropriate subsidy mechanism. As per ministry proposal, subsidy to state discoms should be the difference in actual tariff and Rs 5/unit for Rs 2014-15 and Rs 5.50 for 2015-16. The subsidy to be borne by government would be about Rs 3,621 crore in 2014-15 and Rs 2,056 crore in 2015-16 in order to support administered price mechanism for gas-based power plants.
India’s total installed power generation capacity is 225,793 MW, of which 20,000 MW or nearly 8 percent, is gas-based. With the hike in the natural gas price as per the approved formula, the cost of gas-based power will shoot around Rs 10 per unit, making it unattractive for state discoms as such a high cost of electricity cannot be absorbed by consumers. Meanwhile, the present cost of power produced with blended imported coal comes to about Rs 3.45 per unit.
Furthermore, Power Ministry also asked for three years moratorium and waiver of penal interest for projects that are operating on low plant load factor on account of less availability of natural gas in the country. Presently, around 6,000 MW of the total 20,000 MW installed gas based capacity in the country is stranded because of unavailability of natural gas.
The CNX Nifty is currently trading at 6,073.50 up by 20.05 points or 0.33% after trading in a range of 6,081.85 and 6,053.25. There were only 29 stocks advancing against 21 declining on the index.
The top gainers of the Nifty were Tata Motors up by 2.98%, HCL Tech up by 2.68%, Tata Steel up by 1.75%, BPCL up by 1.23% and Ranbaxy up by 1.20%. On the flip side, Hindalco down by 1.64%, Ultratech Cement down by 1.63%, Bharti Airtel down by 1.63%, Heromoto Corp down by 1.59% and Cipla down by 1.56% were the major losers on the index.
The Asian equity indices were trading in green; Seoul Composite up by 0.46%, Jakarta Composite up by 0.31%, KLSE Composite up by 0.27%, Taiwan Weighted up by 0.46%, Shanghai Composite up by 0.87%, Straits Times up by 0.58% and Hang Seng up by 1.85%.
