Markets sustain their positive tempo after breaking through in green

After breaking past in green terrain in the early noon deals, benchmark equity indices have sustained their positive tempo in light of sluggish global set-up, seen ahead of a ruling by Germany's constitutional court on Wednesday. Hopes of fuel price hike to rein in the burgeoning subsidy bill, has mainly kept the markets going. However, markets approaching the fag end of the trade may lose some of its sheen as the meeting of cabinet committee on political affairs (CCPA) to be held later in the evening, speculated to discuss fuel price hike among other matters, has been deferred to an undecided date. At this point of time, 30 share barometer index of Bombay Stock Exchange (BSE), Sensex, is holding above the 17,800 mental mark, with modest gains of quarter percentage. Similarly, the widely followed index of National Stock Exchange (NSE), Nifty, too sustaining the traction, is trading comfortably above the 5,250 crucial mark. Additionally, broader indices too have sustained their positive momentum.

Meanwhile, safe-haven assets are back in demand on Tuesday as investors are playing a waiting game ahead of a German ruling on the euro zone's new bailout fund, elections in the Netherlands and potential new stimulus from the US Federal Reserve, which besides casting a shadow on European equities have also led to a downtrend in Asian pacific markets.

Closer home, the BSE Sensex is currently trading at 17,818.10, up by 51.32 points or 0.29% after touching a high and low of 17,841.51 and 17,677.38 respectively. There were 16 stocks advancing against 14 declines on the index.

The broader indices too have added gains; the BSE Mid cap and Small cap indices were trading higher by 0.25% and 0.53% respectively.

The top gainers on the BSE sectoral space were, Information Technology up by 0.68%, Realty up by 0.56%, Technology up by 0.55%, Power up by 0.46% and Fast Moving Consumer Goods up by 0.36%. On the other hand, Metal down by 1.56%, Auto down by 0.18% and Capital Goods down by 0.01% were the only losers on the sectoral space.

The top gainers of the Sensex were HDFC up by 2.24%, Gail India up by 1.95%, TCS up by 1.26%, NTPC up by 1.22% and BHEL up by 1.09%. On the flip side, Sterlite Industries down by 4.48%, Jindal Steel down by 2.99%, Hero Moto Corp down by 1.50%, Mahindra & Mahindra down by 0.57% and Tata Steel down by 0.55% were the top losers on the Sensex.  

Meanwhile, after ruling out the case of immediate fuel price hike, Oil minister Jaipal Reddy on Tuesday, said that “The Government will have to hike the price of heavily subsidized fuels such as diesel in the short term”, a decision that needs to be taken to rein in burgeoning subsidy bill. Further, the Oil Minister was quick to add that the hike may not be decided by the cabinet committee on political affairs (CCPA) at its meeting later in the evening. However, Reddy added that if the CCPA does not discuss the fuel price issue on Tuesday, it would be taken up at the next meeting of the cabinet committee which takes decision that has wider political ramifications.

The Oil Ministry circulated a note to the members of the CCPA, which is headed by the Prime Minister Manmohan Singh, detailing the crisis created by rise in crude oil prices and fall in value of rupee against the US dollar. Furthermore, although no suggestions have been made on quantum of increase by the Oil Minister, much of the media reports suggest that oil companies will be permitted to hike the price of petrol by as much as Rs 5, and those prices of diesel and kerosene, which are regulated, will also be increased in a week’s time.

Public State Undertaking (PSU) oil firms are losing a record Rs 560 crore per day on the sale of regulated diesel and cooking fuels, and another Rs 16 crore a day on petrol. These firms are losing about Rs 6 per litre on sale of petrol, a commodity which was deregulated from government in June 2010 but rates haven't moved in tandem with the cost.

The S&P CNX Nifty is currently trading at 5,376.75, up by 13.30 points or 0.25% after trading in a range of 5384.55 and 5,332.10. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Siemens up by 2.85%, BPCL up by 2.51%, HDFC up by 1.90%, IDFC up by 1.84% and Bank of Baroda up by 1.78%. On the other hand, Sesa Goa down by 6.22%, Sterlite Industries down by 4.92%, Jindal Steel down by 3.01%, Hero MotoCorp down by 1.58% and DLF down by 1.29% were the top losers on the index.

Most of the Asian indices were trading in red; Shanghai Composite declined 0.67%, Jakarta Composite lost 0.13%, KLSE Composite surrendered 0.42%, Nikkei 225 slid 0.70% and Kospi Composite Index slipped by 0.24%.

On the other hand, Hang Seng was up by 0.15%, Straits Times added 0.29% and Taiwan Weighted rose marginally by 0.03%.

The European markets were trading in negative terrain ahead of a ruling by Germany's constitutional court on Wednesday. CAC 40 was trading lower by 0.44%, DAX slid 0.16% and FTSE 100 declined by 0.25%.