MODERATE GAINS

Stock markets in India continue to trade with a positive bias in an extremely tight range in mid-morning trades on Thursday as the frontline equity indices rose by around a quarter percent. The benchmark indices were holding on to the psychological 17,000 (Sensex) and 5,150 (Nifty) levels but showed little signs of moving significantly higher from those levels. Market participants remained reluctant to open fresh positions ahead of the important Euro-Zone leaders' Summit since the pressure on Euro-zone leaders intensified amid speculations that Spain is sliding closer to a bailout as the region's recession deepens and government faces unsustainable cost of debt refinancing. Barring the Japanese markets which traded with over a percent gains, most equity indices in Asia traded in close proximity with their previous closing levels. Moreover, the encouraging US economic reports which showed long-lasting US manufactured goods demand rebounded in May and a gauge of business spending plans increased went on to temper concerns that a European summit would do little to solve the region's debt crisis. On the domestic front, sentiments were supported by India's new Finance Minister and Prime Minister Manmohan Singh's statement that he has directed urgent steps to reverse the climate of pessimism and revive the animal spirit. Moreover, cues from the money market remained supportive as the Indian rupee snapped its streak of depreciation against the dollar and appreciated to the 57 mark against the US dollar. On the BSE sectoral space, the Power pocket climbed over three fourth of a percent and remained the top gainer in the space followed by the PSU and Capital Goods pockets  which traded with gains of over half a percent. However, investors were seen booking mild profits in the rate sensitive Auto and Bankex counters which slipped marginally.

Moreover, the broader markets too traded on a positive note with moderate gains of around half a percent, performing relatively better than their larger peers. The bourses advanced on good volumes on the June series Futures and Options contract expiry day while the market breadth on BSE was in favor of advances in the ratio of 1268:732 while 109 scrips remained unchanged.

The BSE Sensex is currently trading at 17,010.75 up by 42.99 points or 0.25% after trading as high as 17,023.64 and as low as 16,982.85. There were 21 stocks advancing against 9 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.51% and Small cap index added 0.47%.

On the BSE sectoral space, Power up 0.78%, PSU up 0.52%, Capital Goods up 0.52%, Metal up 0.51% and Consumer Durables up 0.35% were the major gainers, while Auto down 0.13% and Bankex down 0.06% were the only laggards in the space.

Tata Power up 1.79%, NTPC up 1.42%, Infosys up 0.99%, Jindal Steel up 0.95% and Coal India up 0.89% were the major gainers on the Sensex, while Tata Motors down 1.32%, TCS down 0.46%, Wipro down 0.46%, HDFC Bank down 0.37% and Bajaj Auto down 0.28% were the major losers in the index.

Meanwhile, Indian economy appears to be on a revival path with the new finance minister and the present Indian Prime Minister Manmohan Singh at the helm of affairs following the resignation of ex-finance minister Pranab Mukherjee who is tipped to be the front runner in the race to become the country's president. The new finance minister called upon a meeting with Planning Commission Deputy Chairman Montek Singh Ahluwalia, PMEAC Chairman C Rangarajan and senior officials from the Finance Ministry after taking over the Finance portfolio and showed his intent to revitalize Asia's third largest economy by initiating urgent steps to reverse the climate of pessimism with re-generation of animal spirit.

Manmohan Singh acknowledged that at the current juncture, India is passing through challenging times economically as growth rate has been deteriorating, the industrial production remains abysmal, investment climate too looks relatively unattractive while inflation also continues to be a problem. But, emphasizing that reviving investor sentiment was his top priority, he opined that government needs to work towards making India resilient in meeting external as well as internal challenges to get the economy going again and restart the India growth story.

The finance minister also voiced his concerns over the external factors and the way the exchange rate has behaved and also over the drying capital flows. While, he highlighted that there have been various challenges that have contributed to the general negative mood, Manmohan Singh advocated the idea of addressing problems on the tax front and he also called for solving problems faced by the Mutual Funds and Insurance sectors.

The finance minister is also scheduled to meet Reserve Bank of India Governor D Subbarao and Planning Commission members on June 28, 2012 as part of his review of affairs concerning the economy.

The S&P CNX Nifty is currently trading at 5,154.05, higher by 12.15 points or 0.24% after trading as high as 5,157.35 and as low as 5,145.75. There were 35 stocks advancing against 15 declines on the index.

The top gainers on the Nifty were Tata Power up 1.48%, NTPC up 1.42%, Siemens up 1.34%, JP Associates up 1.22% and Grasim up 1.15%.

Tata Motors down 1.46%, HCL Tech down 1.44%, IDFC down 1.30%, Axis Bank down 1.30% and R Infra down 0.84% were the major losers on the index.

In the Asian space, Hang Seng rose 0.25%, Nikkei 225 surged 1.31%, Straits Times Index climbed 0.64%, KOSPI Composite Index inched up 0.08%and Taiwan Weighted rose 0.20%.

On the other hand, Shanghai Composite eased 0.03% Jakarta Composite shed 0.27% and KLSE Composite fell 0.32%.