POSITION BUILD UP

Indian markets are witnessing huge position build up in the Wednesday afternoon session, helping the benchmark indices to come out of the range bound trades and hit new highs. Hefty buying interests in heavyweights from Oil & Gas and Rate sensitive counters pulled the frontline indices around the psychological 5,300 (Nifty) and 17,600 (Sensex) levels. Investors hoped from some encouraging developments from the global front ahead of a key US Federal Reserve meet outcome which may signal more measures to bring the weakening US economy back on recovery mode. However, the upside for local markets was capped by reports that Greek PM won the backing of his cabinet to hold a referendum on a 130 billion euro bailout package. Domestic sentiments also got a lift following the European futures which traded good gains of over a percent. On the BSE sectoral front, there appeared no laggards as investors showed buying interests across the board. The Oil & Gas counter topped the chart with over one and half a percent gains after heavyweight Reliance Industries made it presence felt by surging over two percent. The Healthcare and rate sensitive Automobile and Bankex indices too traded with notable gains. Moreover, the broader markets too traded on an optimistic note with gains of around half a percent but were outclassed by their larger peers. The bourses gained on volumes of around Rs 0.50 lakh core while the market breadth on BSE was in favor of advances in the ratio of 1399:1192 while 123 scrips remained unchanged.
The BSE Sensex is currently trading at 17,615.26 up by 134.43 points or 0.77% after trading as high as 17,615.26 and as low as 17,337.65. There were 24 stocks advancing against 6 declines on the index.
The broader indices were trading in the green terrain; the BSE Mid cap index advanced 0.45% and Small cap added 0.31%.
On the BSE sectoral space Oil & Gas up 1.61%, Healthcare up 0.87%, Power up 0.81%, FMCG up 0.68% and Bankex up 0.68% were major gainers while there were no losers in the space.
RIL up 2.03%, M&M up 1.76%, Bajaj Auto up 1.46%, ONGC up 1.35% and JP Associates up 1.18% were the major gainers on the Sensex, while Hero Moto down 1.49%, Bharti Airtel down 0.84%, Wipro down 0.58%, Coal India down 0.56% and HUL down 0.14% were the major losers on the index.
Meanwhile, government owned oil companies are planning to hike the petrol prices for 13th time since June 2010, due to depreciation in rupee which increased the cost of imports of crude oil.
On September 2011, Indian Oil, Hindustan Petroleum and Bharat Petroleum had increased petrol prices by Rs 3.14 per litre, at that point of time, the Rupee was ruling at around Rs 48 against $1. The rupee has depreciated because of the slowdown in United States and European economies. Presently rupee is trading at over Rs 49 against American currency.
As per HPCL senior official, oil companies are making losses on petrol and may increase prices to cover these losses. The international market price of crude oil are hovering around $108 per barrel, at present exchange rate, petrol price of Rs 66.84 per litre in Delhi corresponds to about $102 per barrel equivalent of crude oil price.
In June 2010, the government had deregulated petrol prices, however the retail rates have not moved in line with the cost as high inflation rate forced the oil companies to seek advice from parent oil ministry before revising rates.
However, it is not clear that when petrol prices would be increased. Without any elaboration, the official said, 'We are in consultations.'
Currently oil companies are losing around Rs 1.50 per litre on the sale of petrol after including local taxes and are looking to hike petrol prices by Rs 1.83 per litre. Along with petrol, the oil marketing companies are also losing around Rs 333 crore a day on selling diesel, domestic cooking gas and kerosene below market price.
Oil firms lose around Rs 9.27 and Rs 26.94 on every litre of diesel and kerosene, and around Rs 260.5 on every 14.2 kg LPG cylinder.  At this pace, in the current financial year the firms are expected to lose around Rs 1,21,459 crore in revenue on the sale of diesel, domestic LPG and kerosene.

The said revenue loss on these three petroleum products is compensated via a combination of government cash subsidy and upstream oil firm dole outs. But, there is no such mechanism to compensate for the revenue loss made on the sale of petrol as the price has been decontrolled.

However, government has failed to give the committed cash subsidy to oil firms of around Rs 15,000 crore announced for the April-June 2011 quarter, worsening the financial health. During the said quarter, oil companies made revenue loss of more than Rs 9,000 crore.
The S&P CNX Nifty is currently trading at 5,296.40, higher by 38.48 points or 0.73% after trading as high as 5,300.10 and as low as 5,204.95. There were 40 stocks advancing against 10 declines on the index.
The top gainers on the Nifty were R Com up 5.94%, R Infra up 3.80%, R Power up 2.52%, HCL Tech up 2.30% and SAIL up 2.17%.
PNB down 3.22%, Hero Moto down 1.42%, Bharti Airtel down 0.70%, Coal India down 0.61% and Tata Steel down 0.24% were the major losers on the index.
Asian markets traded on a mixed note, Shanghai Composite surges 1.25%, Hang Seng climbed 0.72%, Jakarta Composite jumped 1.19% and Straits Times garnered 0.87%.
On the flipside, KLSE Composite declined 0.35%, Nikkei 225 plummeted 2.21%, Seoul Composite sank 0.61% and Taiwan Weighted shed 0.31%.
The European markets traded on a pessimistic note as France's CAC 40 shed 0.31%, Germany's DAX slipped 0.49% and Britain's FTSE 100 declined 0.10%.