Markets remain sideways with a flat start

The consolidation mood of the Indian markets seems to linger for yet another day as the indices have made a flat start of the day. The much talked about pre-budget rally still looks distant with just seven working days left for the Union Budget. The mood of the investors remain cautious despite some good global cues as the US markets closed higher overnight on getting positive economic reports while majority of the Asian indices started on a positive note too. Today some of the infra stocks along with the ADAG companies are pulling the markets lower. There was some media reports of ADAG chief Anil Ambani meeting the CBI officials on the backdrop of the ongoing 2G scam enquiry. Anil Ambani remained at the CBI headquarters for nearly two hours in connection with the agency's investigation into the 2G scam. It was being said that he went to CBI Head Quarter because the Bureau had sought clarification on certain documents relating to --Swan Telecom -- one of the companies allegedly involved in the 2G scam. The much awaited meeting of the Prime Minister with the media yesterday seems to have failed to alley any concern of investors at large.  Back on the street, FMCG, Oil & Gas, Power and Healthcare sectors were pulling the markets down in early trade while Technology, IT and metal were trying to give some respite.

The BSE Sensex opened at 18,345.12; about 44 points higher compared to its previous closing of 18,300.90, and has touched a high and low of 18,345.42 and 18,266.70 respectively. The index is currently trading at 18,309.41, up by 8.51 points or 0.05%. There were 17 stocks advancing against 12 declines on the index and 1 stock remained unchanged.

Mahindra Satyam, formerly Satyam computers has surged in the day's trade after the software servicing company, agreed to pay $ 125 million to settle US shareholder litigation arising from a 2009 accounting fraud. The settlement would resolve claims that Mahindra Satyam misled investors about its business performance.Mahindra Satyam was trading at Rs 64.70, up by 2.05 points or 3.27% from its previous closing of Rs 62.65. The market cap of the company is Rs 7611 crore and the stock has given a negative return of 5.08% in last one month while in last one year it has given negative return of 35.55%.

On the other hand Jindal Steel and Power is trading marginally in red, down by 3.50 points or 0.52% at Rs 666.85. Last one month return of the stock was negative 1.40% while in last one year it has given positive return of 5.80%.

Jindal Steel and Power (JSPL) has received conditional approval from the ministry of environment and forests (MoEF) to build a steel plant in Orissa for Rs 25,025 crore. The ministry passed the order on Monday, fixing six conditions for the project, according to a ministry document. The MoEF stated that it was satisfied by the explanation offered by the company regarding the installment of latest technologies to mitigate the pollution and ash generated from the various activities of the plant especially those related to cement and brick manufacturing.

The overall market breadth has made a strong start with 58.37% stocks advancing against 37.77% declines. The broader indices were outperforming the benchmarks; the BSE Mid cap and Small cap indices were up by 0.22% and 0.49% respectively.

In BSE sectoral indices, Metal up 0.53%,TECk up 0.51%,IT up 0.41%, Auto up 0.09% and PSU up 0.07% were the main gainers in the BSE sectoral space.

On the other hand FMCG down 0.36%, OIL& Gas down 0.34%, Power down 0.34%, Realty down0.22% and Capital Goods (CG) 0.17% were the main losers on the BSE sectoral space.

The top gainers of the BSE Sensex were Bharti Airtel up 1.75%, Mahindra & Mahindra up 0.89%, Tata Steel up 0.77%, Infosys up 0.67% and Hindalco Industries up 0.64%.

JP associates down1.61%, Cipla down 1.22%, Wipro down 0.89%, Tata Power down0.79% and ICICI Bank down 0.74% were top losers on the BSE Sensex.

Meanwhile, the government has kick-started the deliberations for the much talked direct subsidy transfer mechanism. It has set up a high-level task force under Nandan Nilenkani, the UID chairman, to explore the possibility of directly transferring subsidy being provided in domestic cooking gas, kerosene and fertilizers to consumers.

At present, the biggest criticism of the subsidy policy of the government is its untargeted nature. For instance, the subsidy given in diesel is meant for public transportation and farm use, but the same is also availed by rich people driving multi-utility vehicles. Clearly, there is a need to target the subsidies in a better way so that only the needy ones are the beneficiaries while market prices of products is charged from other people.

Direct cash transfers to the deserving beneficiaries have been recommended by different government panels and committees over the years to remove price distortions, get more for the poor out of every rupee spent on subsidy which will help improve welfare in redistribution and at the same time bringing down the overall spending of the government on subsidies.

Earlier, a committee headed by former planning commission member Kirit Parikh had given a report on the matter saying the use of smart cards could provide a transparent and effective distribution system for subsidized products. Since the UID's qualify for such a smart card, the government has been hoping that with rollout of UID cards, it will be able to improve efficiency of subsidies.

The S&P CNX Nifty opened at 5,501.70; about 20 points higher compared to its previous closing of 5,81.70, and has touched a high and a low of 5,501.70 and 5,471.60 respectively. The index is currently trading at 5,485.15, up by only 3.45 points or 0.06%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were SAIL up 2.33%, IDFC up 1.91%, Bharti Airtel up 1.52% M&M up 1.21% and HDFC up 1.05%.

The top losers of the index were JP Associates down 1.77%, BPCL down 1.07%, Reliance Capital down 1.04%, GAIL down 1% and Reliance Power down 0.99%.

Meanwhile, as per the provisional data released by the NSE, the Foreign Institutional Investors (FIIs) were net buyers of Rs 816.64 crore in futures and options segments on Wednesday, February 16, 2011. FIIs were buyers of index futures to the tune of Rs 0.71 crore and were buyers of index options worth Rs 683.74 crore. In the stocks segment, FII's were net buyers of stock futures worth Rs 131.35 crore and they bought stock options to the tune of Rs 0.84 crore.

Majority of the Asian markets were trading mixed bias; Shanghai composite declined by 10.14 or 0.35% to 2,913.76, Straits Times down by 9.40 points or 0.30% to 3,079.72, Seoul Composite was down by 12.49 points or 0.63% to 2,976.62 and Hang Seng was down by 16.81 points or 0.59% to 23,140.16. On the other hand, Nikkei 225 was up by 50.19 points or 0.46% to 10,858.48, KLSE Composite was up by 6.30 points or 0.42% to 1515.60 and Jakarta Composite was up by 17.36 points or 0.51% to 3,434.15 and Taiwan Weighted up by 18.33 or 0.21% to 8,731.29.

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