A BIT VOLATILE

After sneaking out slender gains post a muted start, barometer gauges have again cooled off from intra-day's high level. Despite this the mood continues to remain optimistic at Dalal Street albeit with cautious tone. Volatility is playing at the fore right from the dawn of trade as investor's adjust their position ahead of March month's F&O expiry series, which happens to be April 26, 2012. However, emergence of buying by funds and retail investors at select index-related stocks has aided bourses to trade in fine contour. Stocks of RIL, which are considered to be market bellwether, trading above a percentage points, are contributing to the positive milieu. Mukesh Ambani controlled company, despite posting 21 percent dip in fourth quarter earnings, has edged up on delivering the promise of becoming a debt free company. At the end of last financial year ended March 31, 2012, Reliance Industries (RIL) had total cash balance of Rs 70,252 crore ($13.8 billion), as against an outstanding debt of Rs 68,259 crore ($13.4 billion).

Stocks from Oil & Gas, Health Care (HC) and Public Sector Undertaking (PSU) counters, performing well for themselves were leading the list of gainers on BSE sectoral index, however, stocks from Realty, Information Technology and Power counters remained laggards.

However, ease of regional counterparts too was curbing the upturn of the bourses. Asian stock markets were mostly lower amid a lack of positive catalysts, while manufacturing data in China failed to dispel concerns of weakness in Asia's largest economy.  Meanwhile, the US future indices too were showing a downtick in the screen trade. Back home, BSE's Sensex was trading 25 points higher, below the 17400 level. Similarly, NSE's Nifty gyrating in thin band shied away from 5300 level. However, the broader indices kept outperforming larger counterparts.

The BSE Sensex is currently trading at 17,399.58, up by 25.74 points or 0.15%. The index has touched a high and low 17,444.18 and 17,336.89 respectively. There were 18 stocks advancing against 12 declines on the index. The overall market breadth on BSE was in the favour of advances which thrashed declines in the ratio of 1378:814, while 110 shares remained unchanged.

The broader indices too pared some gains; the BSE Mid cap and Small cap indices were up by 0.23% and 0.52% respectively.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 0.77%, Health Care up by 0.37%, Public Sector Undertaking up by 0.33% and Fast Moving Consumer Goods up by 0.23% and Auto up by 0.17%. While Realty down by 0.77%, Information Technology down by 0.3%, Power down by 0.56%, TECk down by 0.47% and Capital Goods down by 0.03% remained the losers on the index.

The top gainers on the Sensex were ONGC up by 1.26%, Tata Steel up by 1.26%, RIL up by 1.20%, Coal India up by 0.81% and Maruti Suzuki up by 0.68%.

On the flip side, Tata Power down by 1.71%, Infosys was down by 1.67%, DLF down by 1.65%, Hindalco Industries down by 1.44% and BHEL was down by 1.28% were the top losers on the Sensex.

Meanwhile, India may see some important economic reforms like those in subsidies, deregulation of diesel and FDI in retail in the next six months, as per the chief economic advisor Kaushik Basu. However, the biggest reform GST (Goods and Services Tax) may not see the light of day as not everybody wants it to happen under the present regime.

Also there is a serious risk of another European crisis in 2014 and appropriate measures should to be taken to avert another global economic crisis. These comments have come in from Basu after he drew flak over his comments to a Washington based think tank a few days ago where he stated that no big ticket reforms were possible till 2014 elections.

Expanding on the subsidies reform, Basu has said that it is an important reform because the leakage in subsidies is substantial.  In fact the leakage is so big that if authorities can cut this down, it will help cut down the fiscal deficit. Usage of the UID system can help curb the leakage to a great extent. There was no assurance given on FDI in multi-brand retail, but it has been stated that it is likely to happen.

On deregulating diesel prices, Basu is of the opinion that a total deregulation may not be possible as it is a politically sensitive issue. However, a partial deregulation is possible under which a small subsidy that is fixed per liter, is extended. This will not only partially shelter the consumer but will also allow the rise and fall of global price to be mirrored in India, which according to Basu, is essential for market efficiency.

Putting across an interesting reason for why GST is so difficult, Basu has observed that all parties realise that it is a very good reform and hence not everybody wants it to happen under the present regime.

The S&P CNX Nifty is currently trading at 5,299.00, higher by 8.15 points or 0.15%. The index has touched a high and low of 5,310.55 and 5,274.75 respectively.  There were 26 stocks advancing against 23 declines on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were SAIL up by 1.85%, ONGC up by 1.40%, ACC up by 1.39%, Reliance Industries up by 1.33% and Tata Steel up by 1.32%.

On the flip side, RCom down by 2.09% Tata Power down by 1.95%, DLF and Infosys were down by 1.60% and BPCL down by 1.51% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined by 0.19%, Hang Seng slid 0.59%, KLSE Composite descended by 0.42%, Nikkei 225 lost 0.10%, Straits Times was down by 0.26%, Seoul Composite surrendered 0.21% and Taiwan Weighted contracted by 0.47%.

On the flip side, Jakarta Composite up by 0.11%, were the only gainers on the index.