Local bourses make positive start

The Indian equity markets have made a positive start tracking positive cues from the global indices. The US markets finally broke its lull overnight and all the major indices gained by an average one percent while, most of the Asian counterparts were trading in the positive terrain at this point of time. Back home, on the sectoral front oil and gas witnessed the maximum gain in trade followed by fast moving consumer goods and public sector undertaking while, capital goods, realty and healthcare stocks remained the top losers. The broader indices were also trading in the positive terrain. Meanwhile, , PSU oil marketing companies BPCL, HPCL and IOC all edged higher in the trade after a substantial hike of Rs 5 a litre last week, also the oil ministry has decided to raise the commission for petrol pump owners. Index heavyweight Reliance Industries edged higher in the trade however, L&T and Tata Power fell about one percent ahead of their earning numbers. The market breadth has made a positive start; there were 945 shares on the gaining side against 573 shares on the losing side while 71 shares remained unchanged.

The BSE Sensex opened at 18,166.64; about 80 points higher compared to its previous closing of 18,086.20, and has touched a high and a low of 18,198.45 and 18,116.18, respectively. The index is currently trading at 18,151.40 up by 65.20 points or 0.36%. There were 20 stocks advancing against 10 declines on the index.

The overall market breadth has made a positive start with 59.47% stocks advancing against 36.06% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices were up by 0.09% and 0.23% respectively. 

The top gaining sectoral indices on the BSE were, Oil and Gas up by 0.89%, FMCG up by 0.84%, PSU up by 0.74%, Auto up by 0.58% and IT was up by 0.46%. While CG down by 0.40%, Realty down by 0.40% and HC down by 0.15% were the losers on the index.

The top gainers on the Sensex were M&M up by 1.66%, ITC up by 1.32%, Bajaj Auto up by 1.22%, RIL up by 1.06% and Sterlite Industries was up by 0.95%.

On the flip side, Hero Honda down by 1.12%, Tata Power down by 1.04%, L&T down by 0.98%, DLF down by 0.78% and HDFC down by 0.55% were the top losers on the index.

Meanwhile, the Ministry of Power has proposed to Prime Minister Manmohan Singh that Coal India (CIL) should be directed to stop the premium sale of thermal coal through e-auction route and switch the supply to power plans facing fuel shortage in spite of coal linkage. The producer can be allowed to make a comprehensive hike in its notified coal prices so that it is able to make up for the lost revenue. Prime Minister is holding a meeting on May 19, 2011 with all stakeholders to review progress in power and coal mining projects and it is expected that Ministry of Power will discuss this issue with the Prime Minister.

The Ministry of Power's suggestion is backed by the lobby of private power developers, having the view that it will be difficult to raise coal production immediately to meet current requirements. Hence, CIL should stop spot sales of thermal coal, so that they can get extra coal for their thermal plants. The power ministry feels that Coal India should respect commitment to supply quantities agreed under letters of assurance for new units commissioned during 2009-12 before resorting to e-auction of thermal coal. CIL has been selling a part of its annual coal production through the e-auction route to maximize its revenue. In the financial year 2010-11, the company sold nearly 40 million tonnes of thermal coal with average price realization about 80% higher compared to the notified price.

Experts on power sectors see it as one of the possible solutions to make more coal available for power generation that may transmit to channelizing Coal India's production sold under the spot sales process to thermal power plants. Non-diversion would mean loss of production and erosion of investor confidence, besides default on power purchase agreements and term loans.

The S&P CNX Nifty opened at 5,448.15; about 28 points higher compared to its previous closing of 5,420.60, and has touched a high and a low of 5,452.60 and 5,428.25 respectively. The index is currently trading at 5,437.50, higher by 16.90 points or 0.31%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were GAIL up by 2.45%, M&M up by 1.39%, ITC up by 1.24%, Reliance Industries up by 1.14% and Sterlite Industries up by 1.08%.

Hero Honda down by 1.56%, Tata Power down by 1.15%, DLF down by 1.06%, Grasim down by 1.00% and L&T was down by 0.99%, were the major losers on the index.

Most of the Asian peers were trading in the green; Hang Seng was up 178.01 points or 0.77% to 23,189.15, Jakarta Composite was up 13.34 points or 0.35% to 3,853.55, KLSE Composite was up 3.27 points or 0.21% to 1,544.54,  Straits Times was up 29.21 points or 0.93% to 3,170.42 and Taiwan Weighted was up 27.27 points or 0.30% to 8,972.11.

On the flip side, Shanghai Composite was down 2.25 points or 0.08% to 2,870.52, Seoul Composite was down 14.45 points or 0.68% to 2,121.33 and Nikkei 225 was down by 17.94 points or 0.19% to 9,644.14.

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