GAINING STRENGTH

After two days' of lackluster trade, key domestic benchmarks have made a flat opening on first day of May F&O series but, immediately gained momentum gaining over half a percent in early trade tracking supportive global cues. Overnight, the US markets went for a late hour rally with all the major indices gaining above half a percent, mainly pushed up by a batch of bright earnings reports and encouraging news about home sales while, most of the Asian equity indices were trading in the green at this point of time. Back home, sustained buying in most of the key heavyweights along with broader indices supported BSE's -- Sensex -- and NSE's -- Nifty -- to regain their crucial 17,200 and 5,200 mark respectively. Consumer durables witnessed the maximum gain in trade followed by power and realty while, there were no losers on the BSE sectoral space. Meanwhile, the investors will be comforted with Indian Meteorological Department stating that rains during the June-September season are likely to be 99 percent of the long-term average. Monsoon rains are vital for agricultural output and economic growth, irrigating about 60 percent of country's farmland. The broader indices too were trading on a firm note. The market breadth on the BSE was positive; there were 953 shares on the gaining side against 522 shares on the losing side while 49 shares remained unchanged.

Meanwhile, banking and financial shares like ICICI Bank, HDFC Bank and HDFC have surged by nearly 1 percent each. Private banking shares are trading firm on reports that the Cabinet has approved a proposal to cap shareholders' voting rights in private banks at 26 percent irrespective of their total holding.

The BSE Sensex opened at 17,145.39; about 15 points higher compared to its previous closing of 17,130.67, and has touched a high and a low of 17,242.15 and 17,134.85 respectively.

The index is currently trading at 17,204.75, up by 74.08 points or 0.43%. There were 22 stocks advancing against 8 declines on the index.

The overall market breadth has made a strong start with 62.53% stocks advancing against 34.25% declines. The broader indices too were trading firm ; the BSE Mid cap and Small cap indices rose 0.62% and 0.50% respectively.

The top gaining sectoral indices on the BSE were, CD up by 0.95%, Power up by 0.91%, Realty up by 0.77%, Auto up by 0.64% and Bankex was up by 0.64%. While, there were no losers on the index.

The top gainers on the Sensex were M&M up by 2.09%, BHEL up by 1.73%, Hindalco up by 1.72%, ICICI Bank up by 1.59% and Sterlite Industries was up by 1.57%. While, Coal India down by 1.68%, Tata Steel down by 0.34%, RIL down by 0.33%, HUL down by 0.25% and SBI down by 0.19% remained the lone loser on the Sensex.

Meanwhile, the Civil Aviation Ministry is not in favour of the proposed service tax hike on air travel. The Ministry is of the opinion that such steep hike in taxes will not only cause discomfort to the passengers but will also affect business  of airline companies that are already reeling under losses.

As per the budget proposal, the airline service tax is being made ad valorem implying that the tax would go up as the gross ticket price rises. Also service tax shall be hiked from the current 10% to 40%. At present, the tax has a cap of Rs 100 per journey for domestic sector in any class and Rs 500 for international.

As per the Civil Aviation Minister, Ajit Singh the step is a 'retrograde step' and has come in at a time when his Ministry is advocating specific duty rate for Value Added Tax on jet fuel instead of the varied rates of sales tax imposed by different state governments. By adding further he said, the service tax, along with the education cess on all airport and aviation services, would add to the already high tax burden on the sector.

Further, the hike is unwarranted as taxes on air transport are already disproportionately high. A further tax hike will only have a negative impact on economic growth and overall government's revenue basis.  The proposed tax hike is part of the Finance Bill, which is to be passed in the next session of Parliament.  

The S&P CNX Nifty opened at 5,189.00; absolutely flat compared to its previous closing of 5,189.00, and has touched a high and a low of 5,223.05 and 5,188.90 respectively.

The index is currently trading at 5,215.65, higher by 26.65 points or 0.51%. There were 41 stocks advancing against 9 declines on the index.

The top gainers of the Nifty were JP Associates up by 2.51%, M&M up by 2.17%, Hindalco up by 1.94%, Sterlite Industries up by 1.57% and Power Grid up by 1.57%.

On the flip side, Coal India down by 1.73%, Grasim down by 0.67%, Ranbaxy down by 0.60%, Tata Steel down by 0.49% and SBI down by 0.42% remained the only losers on the index.

Asian market were trading mostly in the positive terrain; Hang Seng was up 104.90 points or 0.50% to 20,914.61, Nikkei 225 was up 61.38 points or 0.64% to 9,623.21, Straits Times was up 11.69 points or 0.39% to 2,993.16, Seoul Composite was up 9.94 points or 0.51% to 1,973.98  and Taiwan Weighted was marginally up by 0.27 points to 7,521.62.

Shanghai Composite was down 4.76 points or 0.20% to 2,399.94, Jakarta Composite was down 8.51 points or 0.20% to 4,171.79 and KLSE Composite was down by 8.01 points or 0.51% to 1,571.68.