Benchmarks trade flat after a positive start

The Indian equity markets have made a firm start tracking overnight gains in the US market on signs that a widespread European debt crisis could be averted. But, immediately the index pared all its gain and trading flat as most of the Asian counterparts reversed their initial gains and trading mixed at this point of time. Back home, the bourses pared all their initial gains and were trading flat on account of profit booking witnessed in oil & gas shares. Healthcare witnessed the maximum gain in trade followed by consumer durables and capital goods while, realty, software and oil and gas remained the major losers on the BSE sectoral space. The broader indices were outperforming benchmarks. Meanwhile, PSU oil marketing companies like BPCL, HPCL and IOC all were trading with a cut of about one and a half percent after a two day's rally. The market breadth on the BSE was positive; there were 1,018 shares on the gaining side against 533 shares on the losing side while 60 shares remained unchanged. Trade may remain volatile today as it being the expiry day for the June F&O series.

The BSE Sensex opened at 18,493.59; about 80 points lower compared to its previous closing of 18,412.41, and has touched a high and a low of 18,527.45 and 18,404.55, respectively.

The index is currently trading at 18,417.06, up by 4.65 points or 0.03%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a strong start with 62.42% stocks advancing against 33.91% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.30% and 0.33% respectively.

The top gaining sectoral indices on the BSE were, HC up by 0.70%, CD up by 0.65%, CG up by 0.44%, Auto up by 0.32% and Metal was up by 0.28%. While, Realty down by 0.65%, IT down by 0.65%, Oil and Gas down by 0.60%, FMCG down by 0.39% and TECk down by 0.14% remained the top losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 1.93%, Sterlite Industries up by 1.27%, BHEL up by 1.15%, Cipla up by 0.95% and HDFC was up by 0.78%. On the flip side, Jaiprakash Associates was down by 2.12%, Wipro was down by 1.18%, DLF was down by 1.16%, ITC was down by 0.85% and Tata Power was down by 0.52%  were the main losers on the Sensex.

Meanwhile, the recent hike in fuel price is going to hit the common man, however, this move will reduce burden of oil companies only to the extent of Rs 21,000. The government increased the diesel price by Rs 3.37 per litre, LPG by Rs 50 per cylinder and kerosene rate has been increased by Rs 2 per litre. The decision to increases the prices was long awaited by the oil companies after the rise in petrol price last month.

This hike is believed to be one of the steepest in fuel prices for last some time, however, has proved little help to oil PSUs. According to IOC Chairman R S Butola, despite the Rs 3 per litre increase coupled with cut in customs or import duty from 7.5 per cent to 2.5 per cent and reduction in excise duty from Rs 4.60 per litre to Rs 2 a litre, diesel is still being sold at a loss of Rs 6.90 per litre. Similarly, kerosene is being sold at Rs 25.37 per litre loss and domestic LPG at a loss of Rs 331.13 per 14.2-kg cylinder. The state-run oil firms will end the fiscal with a whooping Rs 121,700 crore revenue loss on selling diesel, domestic LPG and kerosene at government rates, thus, the loss of oil companies will be reduced by Rs 21,000 crore only. However, this increase in prices will reduce liquidity strain of the said companies.

After taking into account the increase in diesel, domestic LPG and kerosene price as well as cut in customs and excise duty, the three oil marketing companies will see their under-recoveries (revenue loss) come down from Rs 171,140 crore to Rs 121,704 crore for the fiscal, as Rs 29,000 crore burden has been eased due to the duty rejig.

On the other hand, this move has affected the consumer and also increased tautness of already heightening inflation. However, the Empowered Group of Ministers who approved this rise stated that the move will have temporary impact on inflation.

The S&P CNX Nifty opened at 5,548.85; about 21 points higher compared to its previous closing of 5,526.60, and has touched a high and a low of 5,558.30 and 5,523.55 respectively.

The index is currently trading at 5,536.35, higher by 9.75 points or 0.18%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Dr Reddy up by 1.95%, Bharti Airtel up by 1.93%, Sterlite Industries up by 1.62%, Reliance Capital up by 1.24% and BHEL up by 1.20%.

On the flip side, Jaiprakash Associates down by 2.06%, Wipro down by 1.17%, BPCL down by 1.05%, Cairn down by 0.95% and ITC down by 0.90%, were the major losers on the index.

Asian markets were trading mixed; Jakarta Composite was up 9.33 points or 0.24% to 3,822.75, KLSE Composite was up 3.33 points or 0.21% to 1,565.85, Nikkei 225 was up 77.21 points or 0.81% to 9,655.52 and Seoul Composite was up by 8.85 points or 0.43% to 2,079.14.

On the flip side, Shanghai Composite was down 16.59 points or 0.60% to 2,741.64, Hang Seng was down 5.79 points or 0.03% to 22,035.98, Straits Times was down 3.19 points or 0.10% to 3,045.09 and Taiwan Weighted was down by 2.63 points or 0.03% to 8,497.53.

 

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