CONSOLIDATION

Indian stock markets are showing signs of consolidation in Tuesday afternoon session as the benchmarks equity indices have given up most part of the gains and investors remained cautious, lacking any significant upside triggers to take the markets higher. The markets were showing some signs of recovery after the brutal butchery in last two trading sessions owing to the disappointing federal budget, however, the psychological 5,300 (Nifty) and 17,400 (Sensex) levels proved to be stern resistance levels for the frontline indices as they failed to break those crucial points and slipped towards the neutral line. Market participants were seen piling up positions in Consumer Durables and Metal counters which surged around a percent. However, hefty selling in rate sensitive Automobile pocket exerted pressure on the frontline gauges as most auto stocks got dragged, led by Tata Motors, Bajaj Auto and Maruti Suzuki. Meanwhile, index heavyweight Reliance Industries, the country's largest company, which showed some fervor for the first time in five days, was pruning gains in noon trades while Bharat Heavy Electricals, the largest power-equipment maker, added some gains after a three-day, 12 percent drop. Besides, Indian bourses failed to get any significant triggers from global peers as most Asian equity indices traded on a cautious note with a negative bias despite a fairly positive cues from overnight US markets which rose on the back of upbeat Chicago area manufacturing numbers and better than expected nationwide home builder sentiment. While, the European futures too indicated that the markets there would open on a negative note.

Moreover, the broader markets too have pared most of their gains and are trading with only marginal gains, consolidating very close to their previous closing levels. The bourses gained on good volumes of over Rs 0.60 lakh crore while market breadth on BSE was in favor of declines in the ratio of 1278:1216 while 157 scrips remained unchanged.

The BSE Sensex is currently trading at 17,330.36 up by 56.99 points or 0.33% after trading as high as 17,410.13 and as low as 17,245.92. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading on a flat note; the BSE Mid cap index gained 0.18% and Small cap index added 0.03%.

On the BSE sectoral space Consumer Durables up by 1.23%, Metal up 0.87%, Realty up 0.87%, Oil & Gas up 0.63% and FMCG up 0.60% were the major gainers, while Auto down 1.56% was the only loser in the space.

Jindal Steel up by 1.81%, Cipla up by 1.63%, TCS up by 1.58%, Hindalco up by 1.52% and Sun Pharma up by 1.45%, were the major gainers on the Sensex, while Tata Motors down 3.07%, Bajaj Auto down 2.01%, Maruti Suzuki down 1.77%, Coal India down by 1.75% and Hero Moto down by 1.22% were the major losers in the index.

Meanwhile, in its bid to bring down state-owned Oil marketing companies' (OMCs) losses that they incur on selling fuel below cost to some extent, the finance ministry decided to give additional subsidy of Rs 15,000 crore for 2011-12 to the oil firms. This compensation is over and above Rs 15,000 crore sanctioned for meeting losses of first quarter ending June 30.

With this, the oil subsidy bill is set to touch over Rs 68,600 crore during current financial year. This is almost half of the total under recovery of Rs 1.37 lakh crore estimated. The OMCs have registered under- recoveries of around Rs 21,374 crore in the July- September quarter and the upstream oil companies like Oil and Natural Gas Corp (ONGC) and Oil India (OIL) are likely to bear good one third or Rs 7,124 crore of the total under- recoveries while the Finance Ministry was asked to make the rest Rs 14,250 crore.

Besides, in the third set of supplementary demands for grants tabled in Parliament on Monday, March 19, 2012, along with additional subsidies for OMCs, the fertilizer industry too was sanctioned an additional subsidy of over Rs 7,200 crore for 2011-12. The total fertilizer subsidy has touched nearly Rs 71,000 crore.

The government has sought approval from Parliament for additional net cash spending of over Rs 42,605 crore during the current financial year ending March 31. However, this additional net cash outgo is unlikely to impact the revised estimate of expenditure given in the Budget tabled on March 16. While the Government's gross additional spending is pegged at Rs 4.30 lakh crore in the third supplementary, Rs 3.87 lakh crore will be generated through enhanced receipts and recoveries.

The S&P CNX Nifty is currently trading at 5,274.00, higher by 16.95 points or 0.32% after trading as high as 5,297.35 and as low as 5,246.95. There were 31 stocks advancing against 19 declines on the index.

The top gainers on the Nifty were Cairn up 2.04%, TCS up 1.92%, Jindal Steel up 1.49%, Cipla up 1.43%, BPCL up by 1.40%.

R Infra down by 2.68%, Tata Motors down by 2.35%, IDFC down by 2.07%, Bajaj Auto down 1.86%, R Power down 1.70% were the major losers on the index.

In the Asian space, Shanghai Composite plunged 1.29%, Hang Seng declined 0.35%, Jakarta Composite fell 0.15% and Seoul Composite shed 0.24% and Taiwan Weighted sank 0.89%.

On the other hand, KLSE Composite added 0.16% and Straits Times moved climbed 0.89%