Jubilant trade continues on the street; Nifty above 5,250 mark

Indian equities continued its firm trade in green hovering near the highest point of the day in the late afternoon session. The market participants remained in cheerful mood hoping that the government would soften its stand on contentious taxation issues and bring in more clarity in the controversial General Anti Avoidance Rules (GAAR) provisions. Traders were seen piling up position in Capital goods, Power and Metal sector. The next major trigger for the market is Q1 June 2012 corporate earnings, which will start trickling from the second week of July 2012. On the global front, the Asian markets were trading in green while the European markets were too trading in green on optimistic note. Concerns over the Euro-zone’s onerous debt trouble got allayed after reports indicated that the leaders in Euro-zone decided to create a single supervisory body for euro zone banks and to allow them to be recapitalized directly by the currency area's rescue fund without adding to government debt. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,250 and 17,300 levels respectively. The market breadth on BSE was positive in the ratio of 1779:880 while 135 scrips remained unchanged.

The BSE Sensex is currently trading at 17,363.18 up by 372.42 points or 2.19% after trading as high as 17,380.47 and as low as 17,134.61. All the 30 stocks on Sensex were advancing, leaving no declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index surged 1.27% while Small cap index soared 1.19%.

On the BSE sectoral space, Capital Goods up 3.45%, Power up 3.00%, Metal up 2.73%, Bankex up 2.64% and Consumer Durables up 2.62% were the major gainers, while there were no laggards in the space.

Jindal Steel up 4.54%, BHEL up 4.25%, L&T up 4.15%, Maruti Suzuki up 4.14% and Tata Power up 3.94% were the major gainers on the Sensex, while there were no losers in the index.

Meanwhile, the state owned oil marketing companies have slashed petrol price by 2.46 liters for the second time in a month, giving relief to the common man from the surging inflation. As a result, petrol prices in Delhi will cost Rs 67.78 per litre with effect from June 28 midnight as compared to Rs 70.24 a litre. This is the second reduction in rate following an Rs 2.02 cut in price per litre from June 3. The two price cut in petrol have wiped out more than half of the massive Rs 7.54 per litre increase in rates which was effected last month.

Even after the recent price cut there are still chances that there will be further cut of Rs 1 per litre as current revision was done at average International oil rate in the first fortnight of June, as global oil prices have fallen worldwide since June. Pursuant to which, in Mumbai, petrol price has been cut by Rs 3.10 to Rs 73.35 per litre, while in Kolkata it will cost Rs 72.74 a litre as compared to Rs 75.81 per litre currently. In Chennai it will be cut by Rs 3.07 per litre to Rs 72.74.

Earlier state-owned oil firms abandoned the practice of revising rates of petrol on 1st and 16th of every month and from now on will now do so on a random date, so as to prevent petrol pump dealers building positions. The current revision in price is done keeping in mind an average of $106.93 per barrel in international rate for gasoline, against which domestic petrol prices are benchmarked. Although Gasoline rates have fallen to about $97-98 a barrel, however rupee has devalued to Rs 57 against the US dollar from Rs 54.96 thus making imports costlier.

In response to the changes in petrol price, IOC had lost Rs 1,053 crore during the current fiscal as it is unable to raise petrol rates in line with the cost in the first two months of current fiscal. The three oil giants, which comprises of IOC, BPCL and HP, the total loss rises to Rs 2,323 crore on a commodity whose price was freed by the government in June 2010. Apart from this, the oil marketing companies are suffering high level of revenue losses on the three sensitive petroleum products, namely diesel, kerosene and cooking gas.

As a result of the last price revision in June last year, loss of revenue in diesel has gone up from Rs 6.13 per litre to Rs 10.20 per litre, for kerosene from Rs 24.16 per litre to Rs 30.53 per litre and for LPG from Rs 331.13 per cylinder to Rs 396.00 per cylinder. At this constant rate, it is estimated that revenue loss on sale of sensitive products during 2012-13 shall be around Rs 83,000 crore for IOC and Rs 151,000 crore for the entire industry.  Oil companies are continuously monitoring international oil prices and change in rupee-dollar exchange rates to assess their potential impact on selling prices in future. So price differential of crude and petrol shall also be under scanner in the coming days.

The S&P CNX Nifty is currently trading at 5,258.40, higher by 109.25 points or 2.12% after trading as high as 5,264.30 and as low as 5,189.00. There were 47 stocks advancing against 3 declines on the index.

The top gainers on the Nifty were Sterlite Industries up 4.56%, Jindal Steel up 4.43%, BHEL up 4.39%, Tata Power up 4.04% and L&T up 3.97%.

Cairn India down 5.45%, BPCL down 0.94% and Bharti Airtel down 0.03% were the only losers on the index.

In the Asian space, Shanghai Composite surged 1.35%, Hang Seng shot up 2.19%, Jakarta Composite soared 1.93%, KLSE Composite advanced 0.40%, Nikkei 225 jumped 1.50%, Straits Times Index climbed 1.46%, KOSPI Composite Index garnered 1.91% and Taiwan Weighted accumulated 1.77%.

The European markets were trading on a firm note with France’s CAC 40 shot up 2.26%, Germany’s DAX got soared by 2.42% and the United Kingdom’s FTSE 100 got ascended by 1.15%.