Domestic equity market fishes out modest gains

Domestic equity markets have clawed back into the green amidst cautious trades in the mid morning trade thereby giving a sense that the rally may lengthen out for the fourth successive day. On the global front, US future indices bucking the trend are trading in green, while the weak close on Wall Street overnight and the subdued trend on the Asian bourses have rendered the mood cautious. Back home;, strong corporate earnings posted by Tata Steel, continued helping short-covering has boosted the investor sentiments. The benchmark indices at this moment are trading comfortably above their physiological mark of 18000 and 5300 respectively. At the same time, the broader indices have garnered gain of over 0.50% each. On the BSE Sectoral front, buying in the stocks from Metal, Capital Goods and Healthcare sectors have aided the local bourses to keep the momentum on positive side and gain considerable ground, however, stocks from Realty, Auto and Information Technology counters are still underplaying themselves and are currently mirroring weak spells. The overall market breadth on Bombay Stock Exchange (BSE) is in the favour of advances which have flogged declines in the ratio of 1476:759, while, 73 shares remained unchanged.

The BSE Sensex is currently trading at 18,320.04, up by 46.24 points or 0.25%. The index touched a high of 18,349.17 and a low of 18,238.73 respectively. There were 17 stocks advancing against 13 declines on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap and Small cap indices were up by 0.62% and 1.08% respectively.

In BSE sectoral indices, Metal up 1.33 %, Capital Goods (CG) up 1.04%, Healthcare up by 0.85% FMCG up 0.76% and Bankex up by 0.55% were the main gainers in the BSE sectoral space.

On the other hand Realty down 0.46%, Auto down 0.36%, IT down 0.23%, TECk down 0.02% were the main losers on the BSE sectoral space.

The top gainers of the BSE Sensex were Tata Steel up 3.25%, Jindal Steel up 2.46%, Jaiprakash Associate up by 2.13%, L&T up 1.91%, and State Bank of India up 1.28%.

HDFC down 2.16%, Hindalco Industries down 1.60%, Mahindra & Mahindra down 1.50%, Tata Motors down 1.20% and DLF down 1.13% were top losers on the BSE Sensex.

Meanwhile, the Indian government has reiterated that it did not intend to hike the administered prices of diesel and cooking fuels despite the surge in under-recoveries of the oil marketing companies (OMCs). It will however increase its subsidy share from 33% to 50% to help protect financial health of fuel retailers.  

India's fuel subsidy bill could reach as much as Rs 80,000 crore from earlier expected Rs 70,000 crore as the crude oil prices harden, said the Union Oil and GAs Minister S Jaipal Reddy on Tuesday, adding that despite this the government would not increase fuel prices at the moment. "We are not at the moment thinking of increasing prices," he responded when asked would the government pass on rising crude prices to the consumers.

Reddy said that half of the revenue loss incurred by the state-controlled fuel retailers on selling diesel, domestic LPG and kerosene would be met by the government by way of cash grants. Another one-third would be contributed by upstream firms like ONGC through discounts on products. The rest might have to be absorbed by the OMCs.

Oil Secretary S Sundareshan said that out of a total of Rs. 46,000 crore worth under-recoveries in fuel sales in the first three quarters this fiscal, the government has already provided Rs 21,000 crore and upstream firms have contributed one-third. This still however leaves more than Rs 9,000 crore to be absorbed. With crude oil prices surging, under-recovery will be much higher in the fourth quarter and therefore the overall losses left to be absorbed by the OMCs could be over Rs 20,000 crore.

The oil minister said in this wake that the finance ministry might cut the indirect taxes on fuels so as to keep prices down without forcing too high under-recoveries on part of the fuel retailers. While cutting the excise duty on oil products will hit revenues, many economists have been pointing out that there was no point in first collecting taxes and then giving them to OMCs for compensation against under-recoveries. 

The S&P CNX Nifty is currently trading at 5,493.40, up by 12.40 points or 0.23%. The index touched high of 5,493.40 and a low of 5,466.80 respectively. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Tata Steel up 3.29%, Ambuja Cement up 2.47%, Jindal Steel up 2.31%, JP Assocaite up by 2.13% and L&T up 1.88%.

The top losers of the index were HDFC down 2.44%, IDFC down 2.25 %, M&M down 1.64%, Hindalco Industries down by 1.37% and DLF down by 1%.

Majority of the Asian markets had dipped in red ; Straits Times was down by  0.03%, KLSE Composite  shed 0.16% and Jakarta Composite declined 0.36%, Seoul Composite  drifted low by 0.33%, Taiwan Weighted  dropped 0.03%.While Shanghai composite up by 0.17%, Nikkei 225 gained 0.60%, and Hang Seng was up by 0.62%.

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