Barometer indices come off their high’s; stick around the key physiological level

Barometer indices though have come off their highs, but are holding the key physiological level mirroring the positive global setup. Concerns over rate hike and economy growth again seem to be weighing down the risk appetite of the investor's which would be circumspectly eyeing the monthly inflation data due for a release later in the day, which will be a cue for the RBI's review of monetary policy later this week. The street expects the WPI to be 8.70% in May, up slightly from the previous month on the back of rising food and fuel prices. The annual rate of inflation, based on monthly WPI, stood at 8.66% for the month of April 2011.

Meanwhile, the three sectoral space on BSE that are leading the path of gains include Public Sector Undertaking (PSU), Realty and Bankex. Gains in the Oil Marketing companies stocks on account of lower crude oil prices mainly led the index trade higher over 1%. BPCL up by 1.07%, Indian Oil Corp up by 0.45% and HPCL up by 1.12%. Crude prices dipped on Monday as increasing signs of global economic slowdown prompted risk aversion. While reports of Saudi Arabia's plan of raising output to 10 million barrels per day (bpd) in July also weighed on the prices. Meanwhile, banks and realty sector were building up on the expectation that the RBI would take a pause after the sledgehammer 50 bps hike in May, if the inflation numbers match the expectation, however, sharp rise in inflation might worsen matters.

The stocks that were buzzing hard in the trade included, Idea Cellular was trading with over 1.5 per cent gains on the back of strong Q4 numbers. Idea reported a 13 per cent rise in profits (quarter on quarter). However, HDFC was trading 1 per cent lower on reports that Citi will offload part of its stake in the housing finance major in a block deal; while, Maruti continued to be under pressure because of the ongoing strike at its Manesar plant.

On the global front, Buyout activity helped U.S. blue-chip stocks eke out a slim gain Monday, though the economic worries that have driven six straight weeks of losses kept traders cautious and weighed on the technology sector. Meanwhile, Asian stocks snapping four-day drop were trading firm after data showed China's industrial production slowed less than economists forecast.

Backhome, the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), despite coming off from its high point of 18,380.19, is trading comfortably above the 18300 level. Meanwhile, the 50-scrip S&P CNX Nifty of the National Stock Exchange was also trading in the green above the 5500 mark. The broader indices, however, were outperforming their larger peers and were trading up with gains of over 0.50% each.

The BSE Sensex is currently trading at 18,343.04 up by 77.05 points or 0.42%. The index has touched a high and low of 18,380.19 and 18,276.78 respectively. There were 24 stocks advancing against 6 declines on the index.

The broader indices were outperforming the benchmark indices; the BSE Mid cap and Small cap indices were up by 0.60% and 0.52% respectively. 

The top gaining sectoral indices on the BSE were, PSU up by 1.13%, Realty up by 1.09%, Bankex up by 1.00%, CG up by 0.89% and HC up by 0.81%. While, Oil & Gas and CD down by 0.07%, were the only losers on the index.

The top gainers on the Sensex were Reliance Infra up by 2.24%, DLF up by 1.85%, ONGC up by 1.62%, Bajaj Auto and M&M up by 1.51%.

On the flip side, Tata Motors down by 1.76%, Hindalo Industries down by 1.22%, Reliance Industries down by 0.75%, HDFC down by 0.69% and Maruti Suzuki down by 0.53%  were the top losers on the index.

Meanwhile, after a series of deferral there seems some hope for the decision on fuel price hike, the Empowered Group of Ministers (EGoM) is likely to meet soon to discuss the price hike in diesel, kerosene and cooking gas said the Oil Minister, S Jaipal Reddy.  Though any specific date is yet to be declared for the EGoM meet but there are buzz that it may happen in the coming week. The public sector oil marketing companies (OMCs) are incurring high revenue losses due to selling diesel, kerosene and cooking gas at the subsidized rates.

S Jaipal Reddy said, 'The oil companies have already lost Rs 45,000 in this financial year and they are losing Rs 450 crore everyday (on sale of subsidized fuel).' Currently, OMCs are incurring revenue loss of Rs 12.64 on every litre of diesel, Rs 26.16 on every litre of kerosene and Rs 381 LPG on every cylinder. At this rate the estimated loss of the present financial year are estimated to reach an all time high of Rs 165,000 crore.

Last week Oil minister had met Finance minister Pranab Mukharjee to discuss the financial losses of OMCs and asked for an immediate rise in the prices of diesel, kerosene and domestic LPG. The minister has been pressing hard for a meeting of the panel at the earliest. Earlier, two meetings of EGoM scheduled on May 11, and June 9, got canceled on the last moment. The government has been avoiding any hike in diesel price because of high inflation, as any increase in diesel price will have significant impact on inflation.

The S&P CNX Nifty is currently trading at 5,512.20, higher by 29.40 points or 0.54%. The index has touched a high and low of 5,520.15 and 5,484.20 respectively. There were 41 stocks advancing against 8 declines on the index, while  a share remained unchanged.

The top gainers of the Nifty were Reliance Capital up by 2.57%, Reliance Infra up by 2.32%, DLF up by 1.96%, Kotak Bank up by 1.77% and ONGC up by 1.75%.

Tata Motors down by 1.57%, Hindalco down by 1.28%, RIL down by 0.82%, HDFC down by 0.64% and IDFC down by 0.27% were the major losers on the index.

All the Asian markets were trading in the green; Shanghai Composite added 1.06%, Hang Seng increased 0.22%, KLSE Composite increased 0.20%, Nikkei 225 expanded 1.09%, Straits Times rose 0.07%, Seoul Composite ascended 1.54%, Taiwan Weighted gained 1.29% and Jakarta Composite added 0.03%.

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