CAUTION PREVAILS

Gains at Dalal Street remains firm ahead of the February's month inflation number and Railway Budget, scheduled to be released later in the day. Although the benchmarks are trading in sync with the global peers, but are currently off their day's highs. There seems to be some sense of vigilance in the milieu as the street expects India's headline inflation to have gained momentum in February from January's 26-month low as higher global oil prices fed into the country's import costs.

However, unrelenting buying by funds and retail investors amid a firm trend in Asian markets, following overnight gains in the US markets on upbeat economic data has sustained the positive momentum of the domestic bourses. On the global front, Asian stock markets rose on Wednesday, powered by the biggest gains of the year on Wall Street after the US Federal Reserve gave a reasonably upbeat assessment of the economy and made no mention of a need for extraordinary monetary easing policies. Other good news from the US that drove the markets higher included a retail sales report showing a gain of 1.1 per cent last month. The government also revised its estimates higher for December and January.

Back on the home turf, protracting gains for the fourth straight session, the 30-share index, which had gained almost 668 points in the past three days, rose by over 100 points, to trade above the 18,000 points psychological level. However, the 50 share widely followed index too amassing gains of over 50 points is re-approaching the 5500 mark. Stocks from Auto, Capital Goods and Bankex counters on BSE sectoral chart, are the one's with prominent gains, however, stocks from Realty index are playing spoil sport for the bourses.However, the broader indices have gained additional traction.

The BSE Sensex is currently trading at 17,960.68, up by 147.06 points or 0.83%. The index has touched a high and a low of 18,040.69 and 17,943.42 respectively.   There were 27 stocks advancing against only 3 declines on the index.

The broader indices too were trading on a firm note; the BSE Mid cap and Small cap indices rose 0.64% and 0.62% respectively.

The top gaining sectoral indices on the BSE were, Auto up by 1.87%, CG up by 1.74%, Bankex up by 1.43%, HC up by 1.29% and CD up by 1.03%. While, Realty down by 0.12% was the lone loser on the index.

The top gainers on the Sensex were M&M up by 3.27%, ICICI Bank up by 2.68%, L&T and Tata Motors were up by 2.56% and Sterlite Industries up by 1.58%,. Meanwhile, TCS down by 1.80%, Wipro down by 1.02% and HDFC down by 0.83% remained the losers on the Sensex.

Meanwhile, the government is working on a new policy to propel Indian aviation sector among top five markets in the world by providing access to safe and affordable air services with a strong regulatory framework and world-class infrastructure facilities, as per civil aviation minister Ajit Singh. The ministry will also consider the proposal to work out a separate air cargo policy as it is expected that 200 freighter aircraft will be required in the next 20 years to meet the industry's demand.

The aviation industry is also keen that civil aviation be granted 'infrastructure status' and aviation turbine fuel be notified as declared goods (of special importance) with uniform central sales tax of only 4% across the country. Further, significant investments should be made in terms of construction of new airports, expansion and modernisation of existing ones, improvement in connecting infrastructure (road, metro and sea link) and better airspace management to help the aviation industry grow as airlines are expected to add 370 aircraft worth Rs 1.5 lakh crore by 2016-17.

As per the industry body ASSOCHAM, attracting domestic investments and easing norms on foreign direct investments are essential so that the sector can grow annually by 8% and also raise freight traffic from 23.5 lakh tonnes now to 70 lakh tonnes in the next ten years. It is also keen that land be demarcated for air cargo villages at airports or nearby regions to help raise freight traffic. Further cargo facilities at tier II and III cities as alternate growth centres should be developed.

ASSOCHAM has recently submitted an action plan to bail out the civil aviation sector from current financial crisis. Indian carriers catered to 5.4 crore domestic and 1.3 crore international passengers in 2010-11. But in spite of enormous growth and increasing trend towards moving to the low cost model, airlines suffered a loss of over Rs 20,000 crore in the past three years. 

The S&P CNX Nifty is currently trading at 5,480.15, higher by 50.65 points or 0.93%. The index has touched a high and a low of 5,499.40 and 5,470.40 respectively.  There were 45 stocks advancing against just 5 declines on the index.

The top gainers of the Nifty were M&M up by 3.26%, IDFC up by 2.75%, Tata Motors up by 2.69%, ICICI Bank up by 2.57% and L&T up by 2.55%.

On the flip side, TCS down by 1.62%, JP Associates down by 1.14%, Wipro down by 0.90%, HDFC down by 0.87% and Reliance Power down by 0.80% remained the losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite gained 0.71%, Hang Seng surged 1.08%, Jakarta Composite added 1.09%, KLSE Composite added 0.59%, Nikkei 225 advanced 1.88%, Straits Times shot up by 1.22%, Seoul Composite rose by 1.25% and Taiwan Weighted was up 1.13%.