Indian stock markets continue to remain in fine fettle in late hours of Tuesday as sentiments remained sanguine on the back of encouraging move by Reserve bank of India which apart from keeping key policy rate unchanged for second straight time went on to cut the cash reserve ratio to 5.5% from 6% which underscores a cut of 50 basis points. The frontline indices traded with hefty gains of over one and half a percent and managed to hold on to the psychological 17,000 (Sensex) and 5,100 (Nifty) levels. Stocks from the rate sensitive banking counter kept gaining traction as the reduction in the CRR would result in infusion of around Rs 32,000 crore of primary liquidity into the banking system. Hefty buying was also evident in Capital Goods and high beta Realty index which traded with strong gains. While there appeared no sectoral laggard on the BSE, however some individual stocks like Coal India and Maruti Suzuki plunged over a percent. On the global front, the markets that were open in Asia settled on a positive note. However, the European markets traded on a negative note as there was no headway in negotiations between European ministers and Greek bondholders over how to resolve the nation's debt crisis. Back home, the broader markets traded on an optimistic note but failed to match the fervor with which their larger peers traded with. The market breadth on BSE was in favor of advances in the ratio of 1529:1160 while 124 scrips remained unchanged.
The BSE Sensex is currently trading at 17,006.58 up by 254.88 points or 1.52% after trading as high as 17,050.32 and as low as 16,770.01. There were 26 stocks advancing against 4 declines on the index.
The broader indices were trading on a positive note; the BSE Mid cap index surged 1.27% and Small cap climbed 0.65%.
On the BSE sectoral space, Bankex up 3.47%, Capital Goods up 2.94%, Metal up 1.73%, Realty up 1.61% and PSU up 1.30% were the major gainers while there were no losers in the space.
SBI up by 5.29%, L&T up by 4.80%, Hindalco Industries up by 3.93%, ICICI Bank up by 3.65%, Mahindra & Mahindra up by 2.95% were the major gainers on the Sensex, while Maruti Suzuki down 1.58%, Sun Pharma down by 0.97%, HUL down by 0.56% and Gail India down by 0.50% were the only losers in the index.
Meanwhile, the Heavy Industries Ministry has come in support of the domestic power equipment producers and has advocated a 14 per cent import duty on power generation equipment for the projects above 1,000 MW. The Heavy Industries Minister, Praful Patel, said, "Such a duty will provide a level playing field to domestic companies such as BHEL and L&T, which have significant disadvantage." The move is primarily aimed at imports from China.
At present, equipment for power projects with capacity over 1,000 MW attract marginal duty, making the import cheaper. To protect their interests and provide them level playing field, domestic players led by Bhel and L&T have been demanding imposition of 14 percent duty on import of electrical equipment as a cushion against local taxes.
If the import duty is imposed, it will provide level playing field to Indian power equipment manufacturers to take on increasing penetration of international suppliers here. "Companies such as Bhel and L&T are at a specific disadvantage. Imports should not be disallowed but there is a case for (the Indian) power industry to have a level-playing field," Patel said. It was reported that the Power Ministry had already circulated a Cabinet note in this regard. Power generation equipment makers having a manufacturing base in India stand to benefit from such a move.
Further, the Heavy Industries Ministry is pushing hard to ensure that the award of equipment contracts by developers of large power projects is done mandatorily through a bidding process, rather than the current practice of developers placing orders directly on the vendors of their choice. The bids for equipment supply for power projects are being rejigged, which will allow domestic gear makers to participate in the procedure. The ministry has also called for procurement model for equipment for ultra mega power projects (UMPP) of 4,000 MW capacity to involve international competitive bidding (ICB).
The S&P CNX Nifty is currently trading at 5,129.65, higher by 83.40 points or 1.65% after trading as high as 5,141.05 and as low as 5,049.80. There were 40 stocks advancing against 9 declines while one stock remained unchanged on the index.
The top gainers on the Nifty were JP Associates up by 5.49%, SBI up by 5.35%, Larsen & Turbo up by 5.02%, IDFC up by 4.82%, PNB up by 4.67%. On the other hand, Maruti Suzuki down by 1.40%, Sun Pharma down by 0.95%, HUL down by 0.67%, Grasim down by 0.48%, GAIL down by 0.305.
In the Asian space, only Nikkei 225 gained 0.22% to 8,785.33 and Jakarta Composite advanced 0.14% to 3,992.28 while all other stock markets including that in China, Hong Kong, Malaysia, South Korea, Singapore and Taiwan remained closed in observance of Lunar New Year holiday.
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