Local bourses trade sideways despite the surprisingly high IIP data

Local Bourses have continued their weak trend tracking feeble global cues even as trader's preferred staying on the sidelines ahead of the March IIP data, which would set the tone for Dalal Street's further movement. However, the fall of crude oil prices gave some respite to the markets after falling by more than 5 percent on Wednesday on an unexpected jump in US gasoline inventories reported by the government that led a huge decline in gasoline futures. Moreover, the stocks from Health Care (HC), Auto and PSU counter are struggling to pull the indices higher. However, the session's drag caming from the stocks belonging to the Metal, Information Technology (IT) and TECk counters. Contributing to the losses are also stocks of the rate sensitive banking sector, apart from Capital Goods space stocks.

On the global front, US stocks overnight declined after three-day rally on Wednesday as energy and other commodity shares sank, feeding worries about the market's ability to stay on its upward path. Asian stock markets tumbled on Thursday after a sell-off on Wall Street. Meanwhile, the US future indices are trading mixed in screen trade. Back Home, 30 scrip sensitive index --Sensex--  on Bombay Stock Exchange lost over 80 points  and was trading exactly near its physiological level of 18500, while the widely  followed 50 scrip index on National Stock Exchange (NSE) was trading above its 5500 level.

However, the IIP data for the month of March came as a big surprise for the street as it rose to 7.3% v/s 3.68% in the last month, much higher than the street expectation, as the economists anticipated that industrial output for the March quarter to show a slight improvement over the previous month. The expectations were that the Index of Industrial Production will come in 3.61% this time against the 3.6% recorded in the previous quarter. The overall market breadth on BSE was in the favour of declines which outpaced advances in the ratio of 1006:971, while 90 shares remained unchanged. The BSE Sensex is currently trading at 18,500.76, down by 84.20 points or 0.45%. The index has touched a high and low of 18,547.72 and 18,458.98 respectively.   There were 6 stocks advancing against 24 declines on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices were up by 0.15% and 0.14% respectively. 

The only gaining sectoral indices on the BSE were, Health Care (HC) up by 0.23%, Auto up by 0.20%, PSU up by 0.15% and FMCG up by 0.01%. While Metal down by 1.13%, IT down by 0.415%, TECk down by 0.43%, Capital Goods (CG) down by 0.40% and Bankex down by 0.26% were the top losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 0.94%, ONGC up by 0.62%, Maruti Suzuki up by 0.57%, NTPC up by 0.28% and Reliance Infra up by 0.06 %.

On the flip side, Hindalco down by 2.39%, Sterlite Industries down by 1.84%, HDFC down by 1.13%, TCS down by 1.00% and BHEL down by 0.93% were the top losers on the index.

Meanwhile, the Empowered Group of Ministers (EGoM) on fuel pricing scheduled on May 12, 2011 is deferred, will meet next week to consider oil ministry's proposal of Rs 3 per litre increase in diesel price. However, a price increase of around Rs 3 per litre of petrol, a decontrolled product, is certain to happen later this week.

Diesel price that accounts for around 60 per cent of the under-recovery or losses of the oil marketing companies (OMCs) - Indian Oil, Bharat Petroleum and Hindustan Petroleum has remained unchanged for nearly 11 months. OMCs are currently losing around Rs 16.17 on every liter of diesel.

The OMCs are also losing Rs. 28.28 per litre of Kerosene, Rs 330 on every LPG cylinder and Rs. 8.5 per litre petrol. At these rates, the OMCs could end up the current financial year with the loss of 180,000 crore. Even though, as these losses are based on the import parity prices for the fortnight ended April 28, ($121.90 per barrel) the amount would be lower when new data is prepared based on current fortnight.

The OMCs buys crude oil at market rate and they are required to sell diesel, kerosene and LPG at government subsidized rate which is the main reason of OMCs loss.  The S&P CNX Nifty is currently trading at 5,539.40, down by 25.65 points or 0.46%.  The index has touched a high and a low of 5,552.85 and 5,527.30 respectively. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Siemens up by 2.13%, Grasim up by 2.10%, Dr Reddy up by 1.16%, Bajaj Auto up by 1.02% and BPCL up by 0.80%.

Hindalco down by 2.81%, Sterlite Industries down by 2.15%, Sesa Goa down by 1.55%, HDFC down by 1.37 % and BHEL down 1.30% were the major losers on the index.

Most of the Asian counterparts were trading in the red; Shanghai Composite was trading lower by 0.36%, Hang Seng dropped 0.83%, Jakarta Composite plunged 0.40%, KLSE Composite decreased 0.18% , Nikkei 225 declined 0.87%, Straits Times fell 0.68% and Seoul Composite  plummeted 1.07%. On the flip side, Taiwan Weighted was trading up by 0.28%.

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