Benchmarks bid adieu to the year 2010 on an optimistic note

Local stocks markets bid adieu to the year 2010 on a high note as they ended the day on an optimistic note with smart gains of over half a percent. The benchmark indices managed to extend their gains for the third straight day as they continued to garner strength through the day's trade despite gyrating in a narrow range. Investors showed huge buying interests across the counters with Anil Dhirubhai Ambani Group (ADAG), realty, auto stocks leading from the front. Market heavyweights like Reliance Industries too lend its support to the frontline indices. The fifty stock nifty eventually came off intraday highs as traders took some profits off the table and closed just15 points below 6150-mark. The BSE Sensex on the other hand amassed well over triple digit gains to scale beyond the psychological 20,500 mark. Out of 30 components of the Sensex, 22 edged higher in trade today while 34 out of 50 constituents of Nifty finished in the green. The broader markets too had some year-end cheer on their part as they went on to outperform their larger peers to settle with strong gains of over a percent.While in the global space, all Asian equity indices, barring Straits Times, closed in the green territory while the European counterparts were trading on a somber note with cuts of around half a percent. On the other hand, the US index futures were trading on a flat note with a negative bias in screen trade. Virtually it was a holiday as stock markets in Japan, South Korea, Indonesia, Thailand, Malaysia, the Philippines and Germany remained closed today on account of new-year holiday while Hong Kong, Australia and Singapore markets closed early today.

Earlier in the day, the markets got off to a positive start despite the mixed cues from the global peers. Investors remained cautious early in the day but sentiments improved as the day progressed. The bourse moved in a narrow range with a positive bias and managed to touch their intraday highs in the initial moments of the second half. However, some bouts of profit booking by investors thereafter lead the indices to close off their day's high. Volumes in the local markets remained on lower side today to over Rs 78 thousand crore while the turnover for NSE F&O segment too remained on the lower side compared to Thursday at over Rs 63 thousand crore as it was the first day of a new F&O series. The market breadth on the BSE was positive; there were 1493 shares on the gaining side against 1037 shares on the losing side while 119 shares remained unchanged.  Meanwhile, in a press conference the oil secretary S Sundareshan said that oil and finance ministries have been in consultations over the issue of under-recoveries and in no case the financial health of the oil companies will be allowed to be affected. He also cleared that compensation will be provided to OMCs in line with the subsidy sharing formula. The finance ministry which had earlier refused to bear more than 33% of the under-recoveries is now likely to let its share hike. 

On the charts: The S&P CNX Nifty successfully crossed 6,133 mark during the session, which is a strong resistance for the index in the near future. If the index breaks 6,030-mark next major support will be around 5980 and 5930 levels. On the flip side, resistance is likely to be around 6180 and 6242.

Finally, the BSE Sensex advanced 120.02 points or 0.59% to settle at 20,509.09 while the S&P CNX Nifty added 32.65 points or 0.54% to end at 6134.50.

The BSE Sensex touched a high and a low of 20,552.03 and 20,412.76, respectively.

RCom up 4.99%, Bajaj Auto up 4.37%, Reliance Infra up 4%, JP Associates up 2.97% and SBI up by 2.24% were the major gainers on the Sensex.

On the other hand, Sterlite Industries down 0.98%, Jindal Steel down 0.79%, NTPC down 0.64%, BHEL down 0.51% and Hero Honda down 0.29% were the major laggards on the index.

The BSE Mid-cap and Small-cap indices rose 1.14% and 1.23%, respectively.

Meanwhile, the government on Thursday cleared the introduction of the New Mines and Mineral Bill to amend the Mines Act, 1952. The Bill proposes to amend and consolidate the law relating to regulation of condition of work and welfare of persons employed in mines and for the matter connected therewith or incidental thereto.

The bill has been drafted by the ministry of mining after several rounds of consultations with all the stakeholders including various central ministries, state governments, industry associations and NGOs. In the earlier draft some concerns were raised by the industry bodies and according to the ministry of mines the same have been addressed in the final draft.

These amendments in the Mines Act, 1952 envisage extending the Act to the whole of India including territorial waters, continental shelf, exclusive economic zones and other maritime zones of India substituting the definition of owner so as to make it more comprehensive and specific. It also seeks to define the 'foreign company' with reference to the Companies Act, 1956 and provide for appointment of officials in addition to agent of employer in the mines.

According to the mines ministry, the Act was last amended in 1983 and since then several developments in the area of technology, scale of operations, working environment and work practices in coal, non-coal and oil sector have taken place. Mining operations are getting progressively more mechanised with the introduction of heavy machines, shallow deposits getting depleted and mines becoming deeper with their attendant complexities. Also operators from other parts of the world have started acquiring mining rights and managing mining operations within India. All these developments have necessitated amendments to make the mining act more relevant in current times.

The top gainers in the BSE sectoral space were Realty up 2.40%, Bankex up 1.40%, Auto up 0.93%, Consumer Durables (CD) up 0.72% and Power up 0.69%, while IT down 0.04% was the lone loser in the BSE sectoral space.

Whether the diesel prices are hiked or not, the under-recoveries of the oil marketing companies (OMCs) will be fully taken care of, said the government on Thursday. The oil and gas ministry said  that the finance ministry was equally worried about the health of government controlled OMCs and had assured the petroleum ministry of adequate compensation.

In a press conference the oil secretary S Sundareshan said that oil and finance ministries have been in consultations over the issue of under-recoveries and in no case the financial health of the oil companies will be allowed to be affected. He also cleared that compensation will be provided to OMCs in line with the subsidy sharing formula. The finance ministry which had earlier refused to bear more than 33% of the under-recoveries is now likely to let its share hike. 

The remarks from the secretary came just amidst the cancellation of a meeting of the Empowered Group of Ministers (EGoM) on fuel prices. The panel was to take up the issue of hiking prices of diesel and LPG gas. The indefinite postponement of the meeting was taken as government's unwillingness to hike the administered prices of the fuels. This however can have significant impact on financial health of the OMCs whose under-recoveries may cross earlier estimates of Rs 66,000 crore by a significant margin.

The EGoM has been considering a price hike of Rs 2 per litre on diesel and Rs 30-40 per LPG cylinder. OMCs currently sell diesel at a loss of Rs 6.09 per litre and cooking at Rs 272.19 per cylinder. Sundareshan while refused to comment on the reason for the cancellation of the meeting of fuel EGoM, said that it will have no bearing on the issue of compensation of the OMCs which will be addressed by the finance ministry.

'An impression seems to have been generated that since the EGoM has been postponed, and the under-recoveries will be left unattended. This is totally incorrect,' he said. Sundareshan also categorically stated that in no case the upstream companies will bear more than 33% of the under-recoveries and only a very small amount can be left to be absorbed by the downstream companies, which means the finance ministry will have to increase its share of subsidy burden.

The S&P CNX Nifty touched a high and a low of 6,147.30 and 6,103.55, respectively.

The top gainers on the Nifty were RCom up 5.09%, Reliance Infra up 4.28%, Bajaj Auto up 3.59%, JP Associates up 2.96% and IDFC up by 2.61%.

On the other hand, Jindal Steel down 1.37%, Sterlite Industries down 1.17%, Dr Reddy's down 1.07%, HCL Technologies down 0.97% and NTPC down 0.62% were top losers on the index.

Asian equity indices finished mostly in the positive terrain on the last trading day of the year 2010. Chinese Shanghai Composite rose more than one and a half percent in the day's trade led by coal producers on an upbeat price outlook. Stock markets in Japan, South Korea, Indonesia, Thailand, Malaysia and the Philippines remained closed today on account of new-year holiday while, Hong Kong and Singapore markets traded for half-day session.

Shanghai Composite Index surged 48.50 points or 1.80% to 2,808.08, Hang Seng rose 36.11 points or 0.16% to 23,035.45 and Taiwan Weighted was up by 64.59 points or 0.73% to 8,972.50.

On the flip side, Straits Times was down by 22.42 points or 0.70% to 3,190.04.

European markets were trading in the red on Friday. France's CAC 40 shed 0.55% and Britain's FTSE 100 slid 0.42%.

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