Local equity indices trade in positive terrain

The local equity markets are trading in positive terrain in the late-morning session as traders mood remain positive on the eve of new year and with the start of new F&O series. Mean while, the regional peers are trading on a mixed note though, the Dow future was showing uptick in the screen trade. Back home, in the sectoral space of the BSE, Reality,Consumer Durables (CD), Capital Goods (CG) , Bankex and Power sectors were leading the gainers list, while on the other hand  IT and Teck  counters were witnessing some selling pressure. However, the broader indices outperformed their larger peers. The market breadth on the BSE was extremely positive; the gainers thrashed the losers in a ratio of 1928:813 while 101 shares were unchanged.

The BSE Sensex increased 123.33 points or 0.60% to 20,512.40. The index touched a high and a low of 20,520.81 and 20,412.76 respectively.

The BSE Mid-cap and Small-cap indices gained 1.01% and 1.21%, respectively.

The main gainers in the BSE sectoral space were Reality up 2.01%, Consumer Durables (CD) up 1.31%, Capital Goods (CG) up 1.08% Bankex  up 1.07 % and Power was up by 0.95% .

On the other hand, IT down by 0.44% and Teck down by 0.13% were only losers in the BSE sectoral space.

The major gainers on the Sensex were JP associates up 3.01%, Reliance communication up 2.93% Reliance Infra up 1.90% , DLF up  1.83% and Bajaj Auto up 1.46%

The major loser on the Sensex were Sterlite down 0.42%, NTPC down 0.32%,Infosys down 0.25% and ONGC was down by 0.10%.

The Indian government said on Thursday that the currently high food inflation was more than just the base effect and more measures will be taken to tackle the scenario. Union Finance Minister Pranab Mukherjee accepted that inflation was behaving differently from what was factored in the policy making and therefore more steps will be needed.

'We are looking into it. So far as onion is concerned, we have taken care of it... But the fluctuation in milk, fruit, vegetables and certain commodities have contributed to the inflation,' Mukherjee said adding that too much volatility in food prices only adds to the problems of the marginal section of society.

The finance minister said that while base effect was thought to be responsible to high inflation earlier, now it seems that some more factors are involved, 'This is an area of concern... Earlier we thought that it is because of the base effect but it is not merely the base effect. There has been real increase in the prices of certain food items,' he said.

Food inflation in the country is again on the rise after having declined for several weeks due to improved supply of food commodities and activation for high base effect from the previous year. According to the latest reported data food inflation stood at 14.14% during week-ended Dec 18, substantially higher compared with 12.13% in the week-ended Dec 11 and 9.46% in the previous week.

Overall outlook of the food inflation in this wake becomes clouded, contradicting the expectations of the government and the central bank. Mukherjee however projected the headline inflation at the end of the current financial year at around 6.5%. 'I am still holding that fiscal year-end inflation may be around 6.5%,' he said. The RBI had left its end-March 2010 inflation projection unchanged at 6% in its last policy review but is expected to hike the same in the next quarterly policy release scheduled for January 25.

The S&P CNX Nifty was up by 31.80 points or 0.52% to 6133.65 from its previous closing. The index touched a high and a low of 6138.15 and 6103.55, respectively.

The top gainers on the Nifty were Reliance Communication up 3.90%, J P associates up 3.26%,Reliance Infra 2.39%  HDFC bank up 2.30% and DLF up 2.23%.

The top losers on the Nifty were Infosys down 0.74% , NTPC down 0.72% , DR Reddy down 0.65% , Jindal steel down 0.64% and HCL Tech was down by 0.53%.

The regional peers were trading on a mixed note .Hang Seng increased 0.16% and Taiwan Weighted while Straits Times shed 0.70%.

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