Benchmarks trade firm after a flat start

The Indian equity markets are trading firm in the morning session after making a flat start, tracking good going in the Asian markets. All the Asian equity indices barring Taiwan Weighted were trading in the positive terrain at this point of time. Back Home, sustained buying in key heavyweights was keeping the momentum on a positive side for the benchmark indices, metal, consumer durables and public sector undertaking stocks were witnessing maximum gains in trade, while auto was the lone loser on the BSE sectoral space, meanwhile the broader indices were outperforming the benchmarks. However, PSU OMC's viz Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) all were trading with a gain of more than one percent on expectation that EGoM will probably take the decision favor of hiking the fuel prices, in its meeting to be held on Thursday evening. The market breadth on the BSE was positive; there were 1,170 shares on the gaining side against 460 shares on the losing side while 68 shares remained unchanged. Trade may remain volatile this week as it being the expiry week for the December F&O series.

The BSE Sensex opened at 20,060.88; about 35 points higher compared to its previous closing of 20,025.42, and has touched a high and a low of 20,108.04 and 20,054.64 respectively. The index is currently trading at 20,100.12, up by 74.70 points or 0.37%. There were 22 stocks advancing against 8 declines on the index.

The overall market breadth has made a good start with 68.90% stocks advancing against 27.09% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.56% and 0.67% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 1.01%, CD up by 0.81%, PSU up by 0.55%, Realty up by 0.48% and Bankex was up by 0.45%. While, Auto down by 0.27% was the lone loser on the index.

The top gainers on the Sensex were Sterlite Industries up by 1.84%, Hindalco up by 0.99%, Tata Steel up by 0.87%, HDFC up by 0.83% and Jindal Steel was up by 0.71%.

Reliance Communication down by 1.22%, Tata Motors down by 0.87%, M&M down by 0.86%, Wipro down by 0.67% and Cipla down by 0.54%, were the top losers on the index were.

Meanwhile, Chairman of the Prime Minister's Economic Advisory Council (PMEAC) C. Rangarajan said on Monday that India's inflation would come down to 5.5% by March next year. Addressing the 93rd annual conference of Indian Economic Association in Chandigarh, the former Reserve Bank Governor however added that an increase in fuel prices can raise inflation beyond forecasts.

Rangarajan said that while it was possible to lower inflation by augmenting supply through imports, it was a limited option. "Possibility of augmenting supply and cutting down inflation through imports is limited" he said. Also, with global commodity and food prices surging over last few months, such a move would entail large amount of subsidy that can in turn boost fiscal deficit and fuel inflation indirectly.

He also accepted that there were a number of upside risks to inflation. For instance, the potential increase in diesel prices in order to keep the under-recoveries of the government controlled oil marketing companies (OMCs) can also fuel inflation "If diesel and LPG prices are increased in the near future, certainly it will further augment inflation affecting commodity prices," he said, adding that letting the under-recoveries of OMCs surge beyond reasonable levels was not an option either.

With regard to the possibility of hardening of interest rate in the next quarter in wake of high inflation and further monetary tightening by the RBI, Rangarajan said it would depend on how inflation behaved in the coming weeks. "It (rate hike by RBI) all depends on how overall inflation behave in the coming weeks ... I think if there is further fall in WPI inflation then monetary policy would remain as it is now... we need to watch the behaviour of overall inflation before monetary authorities can take any decision," he opined. The Chief advisor also said that the first objective of a central bank should be price stability. 'Central banks need to be transparent and explicit with respect to their objectives ... among various objectives such as price stability, growth and financial stability, the dominant objective for central banks particularly in developing countries must be price stability,' he said. 

The S&P CNX Nifty opened at 6,005.15; about 9 points higher compared to its previous closing of 5996.00, and has touched a high and a low of 6,020.55 and 6,002.85 respectively. The index is currently trading at 6,019.65, higher by 23.65 points or 0.39%. There were 37 stocks advancing against 13 declines on the index.

The top gainers of the Nifty were Sterlite Industries up by 1.87%, SAIL up by 1.44%, BPCL up by 1.18%, HDFC up by 1.14% and Axis Bank up by 1.12%.

The top losers of the index were RCom down by 0.82%, Tata Motors down by 0.74%, Wipro down by 0.74%, Sun Pharma down by 0.67% and Cipla was down by 0.66%.

All the Asian equity indices barring Taiwan Weighted were trading in the green; Shanghai Composite was up 2.83 points or 0.10% to 2,735.82, Hang Seng was up 241.36 points or 1.07% to 22,863.09, Jakarta Composite was up 24.11 points or 0.66% to 3,684.10, KLSE Composite was up 6.20 points or 0.41% to 1,523.64, Nikkei 225 was up 37.60 points or 0.37% to 10,330.23, Straits Times was up 20.80 points or 0.65% to 3,204.50 and Seoul Composite was up by 4.83 points or 0.24% to 2,038.15.

On the flip side, Taiwan Weighted was marginally down  by 4.20 points or 0.05% to 8,866.56.

 

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