Markets strengthen as mood remain bullish on New Year eve

The domestic equity markets are trading higher with firm footing on the last day of calendar year 2010. The regional peers were trading on a mixed note, while the US index futures were showing an up-tick in screen trade today. Back home, sentiments in the domestic market was upbeat and both the main indices were trading near their day's high. The Sensex was trading firm above 20,500 mark and the Nifty was inching up towards 6,150 level. The Realty space continues to hog the limelight in trade today. Banking, Consumer Durables, capital goods and power counters were also buzzing at this point of time. On the flip side, Information Technology and technology stocks were witnessing some profit booking in trade. The broader market is outperforming the frontline counters and the market breadth on the BSE is pretty strong; there were 1965 shares on the gaining side against 825 shares on the losing side, while 89 shares were unchanged. 

The BSE Sensex surged 129.42 points or 0.63% at 20,518.49. The index touched a high and a low of 20,537.78 and 20,412.76, respectively.

The BSE Mid-cap and Small-cap indices rose 1.08% and 1.31%, respectively.

The main gainers in the BSE sectoral space were Realty up 2.43%, Bankex up 1.19%, Consumer Durables (CD) up 1.08%, Capital Goods (CG) up 1.06% and Power up 1.03%.

On the oher hand, Information Technology (IT) down 0.54% and TECk down 0.18% were the only losers in the BSE sectoral space.

Meanwhile, the Indian government on Thursday approved Rs 1,400 crore for settlement of claims towards the interest subsidy scheme run by commercial banks for exporters. The scheme is meant to mitigate the effects of global financial crisis that hit the export sector in last leg of 2008 and across help shippers to be internationally competitive, particularly those working in the labour intensive space.

'The Cabinet Committee on Economic Affairs (CCEA) today approved provision of Rs 404 crore and also approved an addition amount of Rs 996 crore for meeting pending interest subvention claims of banks, as requested by RBI,' said a statement released by the ministry of commerce and industry on Thursday.

The interest subvention scheme was introduced in July 2007 to help exporters offset the losses on account of global recession. As per the scheme, which is operated by the Reserve Bank of India through scheduled commercial banks, government provides interest subvention of 2 percentage points in respect of rupee export credit to the specified categories of exporters. The scheme covered several sectors including textiles and handlooms, readymade garments, leather products, engineering products, processed farm products, marine products and sports goods.

Under the scheme, the central bank had originally estimated the requirement of an amount of Rs 1350 crore for the period from July 1, 2007 to September 30, 2008. However, the scheme was later extended to March 30, 2010, and the central bank estimated the requirement of an amount Rs.1250 crore. The CCEA had earlier approved release of Rs 800 crore and Rs 450 crore towards the scheme in 2008 and 2009. Presently the scheme has been extended till the end of current fiscal. 

The major gainers on the Sensex were RCom up 4.38%, Bajaj Auto up 3.59%, Jaiprakash Associates up 3.50%, Reliance Infra up 2.82% and DLF up 2.56%.

On the flip side, Sterlite Inds down 0.82%, Infosys down 0.73%, NTPC down 0.54%, TCS down 0.15% and Wipro down 0.11% were the major losers in the BSE sectoral space. 

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.

The S&P CNX Nifty soared 37.40 points or 0.61% to 6139.25. The index touched a high and a low of 6,145.90 and 6,103.55, respectively. 

The top gainers on the Nifty were RCom up 4.15%, Bajaj Auto up 3.68%, Jaiprakash Associates up 3.40%, RPower up 3.17% and Reliance Infra up 2.69%.

The top losers on the index were HCL Tech down 1.01%, Infosys down 0.95%, Sterlite Inds down 0.93%, Dr Reddy's down 0.66% and NTPC down 0.62%.

Other Asian markets were trading mixed. Shanghai Composite climbed 1.76%, Hang Seng advanced 0.16% and Taiwan Weighted jumped 0.73%, while Straits Times was down by 0.70%.

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