Indian equity markets steal some more gain amidst thin trade

Indian equity markets, gyrating in thin band, have clinched some additional ground in comparison to its early deals on continued buying by funds and retail investors. Barometer 30 share index-Sensex-on BSE, climbed above the 17300 psychological level, while the widely followed 50 share index of National Stock Exchange (NSE) - Nifty- was at striking distance of 5250 mark.

All groups of stocks traded higher on the BSE. High beta realty (1.95%), Information Technology (1.62%) led the gains, while technology stocks (1.40%) also saw strong buying interest. However, the brunt of profit booking was borne by Auto index, which emerging as the sole loser on the index was showing a downtick of over 0.50%.

Maruti Suzuki shares, by trading lower over a percentage and half points, were dragging the index pivotal lower. India's leading car maker Maruti Suzuki India reported a decline of 29% in its consolidated net profit after taxes, minority interest and share of profit of associates for the year ended March 31, 2012 at Rs 1680.97 crore as compared to Rs 2382.36 crore for the year ended March 31, 2011.

On the global front, Asian stock markets also managed to lend some support to Indian equity markets as Asian pacific stocks rose Monday in holiday-thinned trade as sluggish U.S. growth figures boosted hopes for more measures from the Federal Reserve to help the world's No. 1 economy. Meanwhile, the US future indices showed an uptick in the screen trade.

Back on the home turf, the BSE Sensex is currently trading at 17,302.77, up by 115.43 points or 0.67%. The index has touched a high and low of 17,324.13 and 17,195.51 respectively.  There were 24 stocks advancing against 6 declines on the index. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1347:792, while 79 shares remained unchanged.

The broader indices continued to trade in fine fettle; the BSE Mid cap and Small cap indices were up by 0.52% and 0.65% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.95%, Information Technology (IT) up by 1.62%, TECK up by 1.40%, Public Sector Undertaking (PSU) up by 1.06% and Bankex was up by 1.00%. While, Auto down by 0.56% remained the lone loser on the index.

The top gainers on the Sensex were DLF up by 3.24%, TCS up by 2.34%, Infosys up by 1.99%, Tata Power up by 1.54% and Hindalco Industries up by 1.46%.

On the flip side, BHEL down by 2.20%, Maruti Suzuki down by 2.08%, Mahindra & Mahindra down by 1.12%, Bajaj Auto down by 0.76% and Wipro down by 0.18% remained the top losers on the Sensex.

Meanwhile, Prime Minister, Manmohan Singh has hinted at an impending fuel price hike and accepted that there is a need to rationalise fuel prices on the same time he is of the opinion that the poor need to be protected from severe hikes. Whether this is an indication of a possible price increase after the ongoing Budget session, only time will tell but certainly confirms the fact that the issue is playing on the government’s mind.

The PM has observed that India, with its rapidly increasing economy needs adequate amount of energy supplied at reasonable prices. However, India is dependent on crude oil imports to the extent of 80% to fulfill its needs and any rise in global prices hits the economy. He further stated that the government has tried to shield the common man from the price hikes by providing subsidies on kerosene, LPG and diesel.  

Prices of kerosene, diesel and LPG are subsidized by the government in the country. Oil companies sell diesel at a discount of Rs 16.16 a litre, while they lose Rs 32.59 on sale of every litre of kerosene. A 14.2-kg domestic LPG cylinder costs Rs 570.50 less than its actual cost.

Petrol prices though deregulated in theory are still under the government’s control. The last petrol price revision was effected on December 1, 2011, when the oil companies reduced the price by Rs 0.65 per litre on top of an earlier price reduction of Rs 1.85 per litre effected on November 16, 2011. These two price reductions were effected as a result of soothing down of the international petrol prices which fell from $120.83 per barrel to $115.03 per barrel and further to $ 109.03 per barrel in the relevant pricing periods.

However since then the prices of petrol have shot up but the government has allowed oil companies to hike prices. As a result the companies are facing huge losses and have gone to the extent of threatening the government of a price hike if subsidies are not paid out to them.

The rising crude oil prices are also impacting the government’s finances to the extent that India’s fiscal deficit is one of the largest amongst the emerging economies. There is no doubt about the fact that the hike in international prices will have to be passed on to the consumers but is being delayed due to concerns of inflation and the political backlash.

The S&P CNX Nifty is currently trading at 5,243.25, higher by 34.25 points or 0.66%. The index has touched a high and low of 5,251.25 and 5,201.45 respectively. There were 40 stocks advancing against 10 declines on the index.

The top gainers of the Nifty were DLF up by 3.16%, Reliance Infra up by 2.58%, TCS up by 2.45%, Punjab National Bank up by 2.18% and Infosys up by 1.99%.

On the flip side, BHEL and Maruti Suzuki were down by 2.33%, M&M down by 1.15%, Asian Paints down by 0.84% and Dr Reddy’s Lab down by 0.73% remained the top losers on the index.

Asian markets were exhibiting mixed trade; Hang Seng up by 1.19%, KLSE Composite rose 0.26% and Taiwan Weighted added 0.10%.

On the flip side, Straits Times declined 0.17% and Jakarta Composite shed 0.36%.

Meanwhile, stock markets in Japan remained closed on Monday on account of Bridge Public Holiday while the Chinese bourses were shut owing to May Day holidays and will re-open directly on Wednesday.