TRADING FIRM

After scaling intra-day's high level in the early deals, benchmarks continue to trade firm on prevailing upbeat sentiment across globe, which has honed up investor's appetite for risky asset class such as equities. Although, off day's high, barometer gauges appear increasingly close of striking the crucial psychological level of 16500 (Sensex) and 5000 (Nifty) respectively. Hefty gains of rate sensitive-Auto, Information Technology and high beta- Capital Goods counters, have added to the vigor of 30 scrip sensitive index, Sensex. On the flip side, stocks belonging from defensive Fast Moving Consumer Goods, Consumer Durable counters are keeping the gains under check.

After being hit hard on steep petrol hike, some solace came to Auto stocks, post Oil Minister Jaipal Reddy statement averring that the government is not looking to hike prices of diesel, LPG or kerosene. Cheerful on the development, stocks of Tata Motors, Maruti Suzuki India and Ashok Leyland all rallied in the range of 1-2% each. On the flip side, defensive counter-FMCG -is just reacting in reverse to the trend of the market.

Halt of three day's appreciation streak by Indian rupee is also eating into the gains of Indian equity markets to some extent. Month-end demand for the American currency from importer amid new worries about the health of Spanish banks has bogged down on the sentiment of Asian currency.

However, on the global front, brushing aside the concerns over health of Spanish banks, regional counterparts firmed up. Concerns about Spain's banks have been mounting ever since Bankia, the country's fourth-largest lender, on Friday stated that it required $23.8 billion in state aid to guard itself up against bad loans largely from real estate sector. Meanwhile, the US future indices too are showing an uptick in the screen trade.

Closer home, the BSE Sensex is currently trading at 16,477.28, up by 60.44 points or 0.37%. The index has touched a high 16,505.35 and low 16,410.23 of respectively. There were 23 stocks advancing against just 7 declines on the index. The overall market breadth on BSE was largely in the favour of advances which piped declines in the ratio of 1069:846, while 110 shares remained unchanged.

The broader indices too have gained some additional traction; the BSE Mid cap and Small cap indices surged by 0.22% and 0.34% respectively.

The top gaining sectoral indices on the BSE were Auto up by 0.87%, Information Technology (IT) up by 0.84%, Capital Goods (CG) up by 0.58%, TECk up by 0.56% and Metal up by 0.51%. While, Fast Moving Capital Goods (FMCG) down by 0.48%, Consumer Durables (CD) down by 0.48%, were losers on the index.

The top gainers on the Sensex were Maruti Suzuki up by 1.94%, Tata Motors up by 1.64%, Coal India up by 1.30% , BHEL up by 1.29% and Gail India up by 1.18%, on the Sensex.

On the flip side, Hindalco down by 0.70%, ITC down by 0.70%, DLF down by 0.66%, Bajaj Auto down by 0.63% and Hindustan Unilever was down by 0.63%, were the major losers on the index.

Meanwhile, after the recent uproar over petrol price hike, government in India buckling under the pressure has decided against raising the prices of diesel. Though it cannot be called as an imprudent decision at a time when inflationary pressure is showing signs of regaining momentum. However, amid the broadening price difference between petrol and diesel, the government is now mulling over another unpopular move that is to hike excise duty on diesel cars which will in turn dissuade demand for cars that run on heavily subsidized fuel.

The Oil ministry has been demanding the excise duty hike for quite some time now. Oil minister Jaipal Reddy had called for additional excise duty of Rs 80,000 on diesel vehicles before the Union Budget for 2012-13 was presented. However, after facing opposition from the automobile industry and the department of heavy industries, the proposal was swept under the carpet and no decision was taken.

But now given the huge gap between the retail prices of diesel and petrol, the finance ministry appears to be giving the proposal a serious thought. After the meeting of inter ministerial group  on inflation, the oil minister made it clear that the government is not considering hikes in diesel, LPG and kerosene prices as it could adversely impact inflation and put unnecessary pressure on the economy. The meeting of Empowered Group of Minister (EGoM) on LPG and fuel prices has also been deferred and no date has been fixed yet for the meet.

Though, the price of diesel is likely to remain unaltered, the finance ministry's decision to hike excise duty on diesel-powered cars would become another point of debate as it would directly impact the sales of automobile companies.

The S&P CNX Nifty is currently trading at 4,999.30, higher by 13.65 points or 0.27%. The index has touched a high and low of 5,009.95 and 4,982.30 respectively. There were 30 stocks advancing against 19 declines while on 1 stock remain unchanged on the index.

The top gainers of the Nifty were Ranbaxy up by 2.79%, HCL Tech up by 2.14%, Maruti up by 2.13%  Tata Motors up by 1.70%, and Coal India up by 1.30%. 

On the flip side, BPCL down by 2.68%, IDFC down by 1.49%, %, Ambuja Cement down by 1.31%, Reliance Infra down by 1.09% and Bajaj Auto down by 1.07% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite climbed 0.86%, Hang Seng Index advanced 0.70%, Straits Times Index added 0.55%7, KOSPI Composite Index surged 1.33%, Taiwan Weighted spurted by 2.94%, KLSE Composite rose 0.07% and Nikkei 225 was up by 0.45%.

On the other hand, Jakarta Composite down by 0.34% was the lone loser among the Asian pack.