Benchmarks open higher tracking supportive global cues; Nifty crosses 5,400 mark

Extending gains for the sixth session in a row, Indian equity markets have made a decent opening tracking supportive global cues. Overnight, the Dow industrials closed at the highest level in nearly five years on Tuesday in a lightly traded session before key decisions in Germany and the United States that could give markets a further boost. Moreover, most of the Asian equity indices edged higher on Wednesday as investors remained cautiously optimistic that a German court would approve the legality of the euro zone's bailout fund later in the day.

Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to regain their crucial 17,900 and 5,400 mark respectively. Meanwhile, traders are awaiting the IIP data to be announced later in the day. After contracting 0.1 per cent in the April-June quarter and coming at (-)1.8 per cent in June, July numbers hold importance as they would give an indication of where the economy is headed in the second quarter.

The sentiments in the domestic market also remained jubilant after Reserve Bank of India relaxed guidelines for Indian companies to raise money overseas through external commercial borrowings (ECB). The maximum limit of ECB has been raised to 75% of the average foreign exchange earnings in the past three fiscal years, or 50% of the highest export earnings in any of the three years, or whichever is higher. Banking witnessed the maximum gain in trade followed by realty and metal while; there were no losers on the BSE sectoral space. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,130 shares on the gaining side against 434 shares on the losing side while 59 shares remain unchanged. 

The BSE Sensex opened at 17,916.13; about 64 points higher compared to its previous closing of 17,852.95, and has touched a high and a low of 17,939.37 and 17,904.04 respectively. The index is currently trading at 17,930.48, up by 77.53 points or 0.43%. There were 24 stocks advancing against 6 declines on the index.

The overall market breadth has made a strong start with 69.62% stocks advancing against 26.74% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.67% and 0.65% respectively.

The top gaining sectoral indices on the BSE were, Bankex up by 0.85%, Realty up by 0.82%, Metal up by 0.80%, Auto up by 0.70% and PSU up by 0.60%. While, there were no losers on the index.

The top gainers on the Sensex were Tata Motors up by 2.16%, Coal India up by 1.30%, Tata Steel up by 1.30%, Sterlite Industries up by 1.28% and ICICI Bank up by 1.24%.

On the flip side, Jindal Steel was down by 2.25%, Cipla was down by 0.63%, HDFC was down by 0.51%, BHEL was down by 0.40% and Hero MotoCorp was down by 0.28% 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 opened at 5,404.45; about 14 points higher compared to its previous closing of 5,390.00, and has touched a high and a low of 5,414.95 and 5,403.05 respectively.

The index is currently trading at 5,413.00, higher by 23.00 points or 0.43%. There were 40 stocks advancing against 10 declines on the index.

The top gainers of the Nifty were Tata Motors up by 2.16%, Ambuja Cement up by 1.68%, Axis Bank up by 1.37%, ACC up by 1.35% and ICICI Bank up by 1.28%.

On the flip side, Siemens down by 2.87%, Jindal Steel down by 2.29%, Cipla down by 0.91%, BPCL down by 0.72% and HDFC down by 0.67%, were the major losers on the index.

Most of the Asian markets were trading in the green; Hang Seng gained 152.20 points or 0.77% to 20,010.08, Jakarta Composite was higher by 5.39 points or 0.16% to 4,160.52, Nikkei 225 surged by 128.15 points or 1.46% to 8,935.53, Straits Times added 9.73 points or 0.34% to 3,026.77, Kospi Composite surged by 30.33 points or 1.59% to 1,950.16 and Taiwan Weighted gained 74 points or 0.99% to 7,559.49.

On the flip side, Shanghai Composite down by 7.81 points or 0.37% to 2,112.74 and KLSE Composite was down by 0.50 points or 0.03% to 1,613.74.