WINNING MOMENTUM

Domestic benchmarks snapped the last trading session of the holiday shortened week on an optimistic note, extending the winning momentum for third back to back session. However, position squaring was witnessed in IT stocks and particularly in TCS after it announced its results which were near the street's expectations and got punished as the expectation were even higher. Moreover, the subdued inflation data released by government weighed on sentiments as food inflation edged up to 8.74%, year-on-year for the week ended April 9, 2011 against 8.28% in the previous week. The upside for the markets also remained capped as investors remained on the sidelines ahead of the financial result of heavyweights RIL. However, heavy buying in some metal and oil and gas stocks helped the market to hold their head above the water till the dying moments. Leads from across the globe too remained supportive as investors overlooked the surge in international crude oil prices which are rising since last few days. The NSE's 50-share broadly followed index Nifty, settled with gains of around half a percent, above the crucial 5,850 support level while Bombay Stock Exchange's Sensitive Index, Sensex ended with triple digit gains, around the psychological 19,600 mark. The broader markets failed to show any kind of fervor this Thursday as the midcap index added 0.13% while the smallcap index rose by 0.03%. On the sectoral front, the Metal index, grabbed the top gainers position after soaring 1.62% due to rally in stocks like Sesa Goa and Hindustan Zinc which surged 4.34% and 3.12% respectively. While the Oil and Gas counter too witnessed some buying and ended with gains of 1.28% because of 1.39% gains in heavyweight like RIL ahead of its result announcement and 3.01% gains in ONGC. On the other hand the Capital Goods pocket down 0.98% and Power index down 0.84% saw bouts of profit booking as bellwether BHEL slipped by 4.38% by the end of trade.

On the global front, majority of Asian equity indices settled with good gains with Taiwanese benchmark leading the pack, supported by chipmaker Taiwan Semiconductor Manufacturing (TSMC) and strong quarterly results from Apple and Intel brightened the outlook for technology demand. The European markets after starting with a positive bias have held on to the gains as France's CAC was gaining 0.46%, Britain's FTSE 100 rising 0.63% and Germany's DAX advancing 0.11%. On the other hand, the screen trading for US index futures too indicated that the Dow could open with gains of around half a percent point.

Earlier on Dalal Street, the benchmark got off to a gap up opening as it carried forward the enthusiasm, after the sharp rally on Wednesday, as investors' mood remained upbeat following the rally in Asian and overnight Wall Street, supported by hefty gains in technology counter and reports of larger than predicted rise in US existing home sales numbers. After the firm opening, the frontline indices capitalized on the initial momentum and went on to test the psychological 5,900 and 19,700 levels which proved as a stiff resistance levels for the indices as they once again faltered after inching closer to those levels as the market gave up some gains with a few blue-chip stocks retreating slightly on profit taking. Thereafter the benchmarks oscillated in a narrow range through the second half of trade and eventually snapped the session after climbing around half a percent point. Markets registered volumes of over Rs 1.61 lakh crore while the turnover for NSE F&O segment remained higher compared to Wednesday at over 1.43 lakh crore. Market breadth remained almost even-steven as there were 1416 shares on the gaining side against 1486 shares on the losing side while 116 shares remained unchanged. Stock markets in India will remain shut Friday on the account of Good Friday.

Finally, the BSE Sensex surged by 131.25 points or 0.67% to settle at 19,602.23 while the S&P CNX Nifty gained 33.05 points or 0.56% to end at 5,884.70.

The BSE Sensex touched a high and a low of 19,695.98 and 19,530.50 respectively. The BSE Mid-cap and Small-cap indices gained 0.13% and 0.03%, respectively. 

Maruti Suzuki up 3.22%, ONGC up 3.01%, Hindalco Industries up 2.92%, HDFC up 2.57% and Sterlite Industries up 2.50% were the major gainers on the Sensex.

On the flip side, BHEL down 4.38%, TCS down 2.23%, Bharti Airtel down 1.01%, Bajaj Auto down 0.72% and Tata Motors down 0.60% were the only losers on the index.

Coal consuming industries in the country ranging from steel to cement and fertilizer producers have approached the Centre to protest the differential hikes in coal prices which have been implemented by the Coal India, the government controlled near monopolist coal miner of the country.

Coal Consumers' Association of India (CCAI) that includes members from key industries like steel, power, fertilizer, cement, paper etc has urged the government to immediately intervene and force the Coal India to roll back the sharp increase in coal prices. The industry body has approached Prime Ministers' Office (PMO), Finance Ministry and Coal Ministry in order to get the prices hikes by Coal India scrapped.

Earlier, Coal India had implemented a differential prices hike according to which sectors like power-utilities and independent power producers and the fertilizer producers would have to pay nearly 30% higher price of coal. Other sector like steel and cement too would have to pay 25-30% higher prices while remaining industries would continue to enjoy the administered prices of Coal Ministry.

CCAI contends that such differential treatment is arbitrary in nature and will cause unnecessary distortions in the market. Besides, a 30% hike in prices was excessive by any means anyway and will add substantially to cost of producers. This in turn will further push general inflation in an economy that is already suffering with elevated headline inflation. The industry body wants the Coal India to implement a smaller and uniform hike, for instance say a 10% hike across all the user industries.

Metal up 1.62%, Oil & Gas up 1.28%, Realty up 0.76%, Bankex up 0.65% and Auto up 0.54% were the major gainers in the BSE sectoral space. CG down 0.98%, Power down 0.84%, IT 0.61%, TECk down 0.59%, PSU 0.05% were major losers in the BSE sectoral space.

The S&P CNX Nifty touched a high and a low of 5,912.90 and 5,864.35 respectively.

The top gainers on the Nifty were Sesa Goa up 4.65%, Maruti up 3.61%, ONGC up 2.81%, Hindalco up 2.78% and Jindal Steel up 2.75%.

The top losers on the index were BHEL down 4.71%, TCS down 2.75%, Siemens down 2.52%, Ambuja Cement down 1.68% and GAIL down 1.63%.

Increasing use of imported equipment in country's power generation sector, particularly that of the used machinery, has raised concerns with the ministry of heavy industries as well as ministry of power on the kind of impact such a trend will have on domestic equipment producing industry, which is already bearing the brunt of high inflation and rising cost of production.

Domestic equipment industry has been urging the government to hike the import duty on power equipment as excessive inward shipments from countries like China was hugely affecting its business. The matter was taken up at a meeting of the committee of secretaries (CoS) where it was decided that while imports should not be totally restricted, it should be made sure that only high quality imports come in, and also that there is no systematic surge in imports.

According to the deal reached between power and heavy machinery ministers, certain qualifying norms would be placed on import of power equipment into the country. Such imports will be allowed only if the equipment meets the efficiency norms as stipulated by the Bureau of Energy Efficiency. Besides, the power ministry also agreed to pre-shipment inspection of used machinery by designated agencies as would be chosen by the Indian government. This inspection would happen at the source of the machinery being imported and if any quality issues are found, the shipment will not be cleared.

Also, the power ministry agreed that there should be regular monitoring of quantum of import of such machinery into the country. If at any stage it is found that there is a systematic surge in imports, which in turn may indicate dumping by some foreign producer, the issues will be brought into the Cabinet's notice. The Cabinet may then decide on raising import duty or scraping import from a particular source country altogether in such a case.

European markets have good gains on mix note. France's CAC 40 was up by 0.60%, Germany's DAX gained 0.70% and Britain's FTSE 100 was trading higher by 0.21%.

All the Asian equity indices barring KLSE Composite finished the day's trade in the positive terrain on Thursday taking cues from overnight gains in the Wall Street led by strong corporate earnings, signaling the global economic recovery is accelerating. Moreover, Taiwan Weighted surged more than one and a half percent, led by chipmaker Taiwan Semiconductor Manufacturing (TSMC), the world's top contract chip maker which rose 1.3 percent, as strong quarterly results from Apple and Intel brightened the outlook for tech demand.