Benchmarks trade positive after a cautious start

The Indian equity markets are trading in the positive terrain after a cautious start supported by sustained buying by foreign funds over the past few days. Though, some amount of recovery witnessed in Asian markets too aided the sentiments as most of the Asian counterparts were trading in the green at this point of time after a subdued start. On the domestic front there is good news; Finance Minister Pranab Mukherjee has said that the government will stick to its fiscal deficit targets at 4.6 per cent of GDP during 2011-12. Realty witnessed the maximum gain in trade followed by consumer durables and metal while, oil and gas, healthcare and banking remained the only losers on the index on the BSE sectoral space. Meanwhile, PSU oil marketing companies viz., BPCL, HPCL and IOC all edged lower in the trade after crude prices rose more than 2 percent overnight, climbing to the highest price in three weeks on signs of economic growth in the US and China. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,322 shares on the gaining side against 571 shares on the losing side while 100 shares remained unchanged.

The BSE Sensex opened at 18,730.29; about 14 points lower compared to its previous closing of 18,744.56, and has touched a high and a low of 18,823.45 and 18,725.56 respectively.

The index is currently trading at 18,773.49, up by 28.93 points or 0.15%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a strong start with 66.33% stocks advancing against 28.65% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.43% and 0.54% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.08%, CD up by 0.74%, Metal up by 0.52%, CG up by 0.50% and TECk was up by 0.43%. While, Oil and Gas down by 0.13%, HC down by 0.05% and Bankex down by 0.04% were the only losers on the index.

The top gainers on the Sensex were DLF up by 1.43%, Bharti Airtel up by 1.03%, HDFC up by 0.82%, L&T up by 0.69% and Tata Motors was up by 0.64%.

On the flip side, M&M was down by 0.98%, Sterlite Industries was down by 0.61%, Reliance Infra was down by 0.54%, SBI was down by 0.53% and Wipro was down by 0.47% were the only losers on the Sensex.

Meanwhile, the Indian government is trying to ensure nonstop crude oil supply from Iran, on the contrary Iran had warned that it may stop the crude oil supply to Indian refineries if months of unpaid bills are not settled soon. The Indian oil minister S Jaipal Reddy on June 5 said, "India is trying to ensure uninterrupted supplies of crude from Iran."

'There is a problem. We are sorting it out. We are optimistic about finding the solution and ensuring uninterrupted supply of oil,' S Jaipal Reddy said.

The payment problem has arisen in the wake of an RBI circular in December 2010, requiring all trade and other current account transactions with Iran to be settled only in permitted currencies outside the Asian Clearing Union (ACU) mechanism. With the ACU mechanism being stopped, all dollar payments to exporters were then temporarily routed through the US banks, with euro payments similarly being done through European banks.

However, since January, US and European banks had blocked the transactions to Indian exporters due to international sanction on Iran. Because of this, Indian banks are not able to accept the Letter of Credit from such transactions.  The two way trade between India and Iran is around $14 billion, India imports around $12 billion worth goods, mainly crude oil, and India export around $2 billion.

The S&P CNX Nifty opened at 5,622.70; about 10 points lower compared to its previous closing of 5,632.10, and has touched a high and a low of 5,655.40 and 5,620.35 respectively.

The index is currently trading at 5,642.95, higher by 10.85 points or 0.19%. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 1.67%, DLF up by 1.43%, Cairn up by 1.41%, GAIL up by 1.20% and Bharti Airtel up by 0.93%.

BPCL down by 1.15%, Reliance Capital down by 1.072.03%, M&M down by 1.00%, Ranbaxy down by 0.88% and SBI was down by 0.52%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; KLSE Composite was up 3.65 points or 0.23% to 1,585.50, Nikkei 225 was up 22.94 points or 0.23% to 9,995.40, Straits Times was up 4.20 points or 0.13% to 3,133.89, Seoul Composite was up 1.26 points or 0.06% to 2,163.01 and Taiwan Weighted was up by 48.19 points or 0.55% to 8,832.63.

On the flip side, Shanghai Composite was down 22.30 points or 0.79% to 2,794.05, Hang Seng was down 90.21 points or 0.40% to 22,657.74 and Jakarta Composite was down by 7.38 points or 0.19% to 3,916.75.

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