POSITIVE MOMENTUM

Owing to the positive momentum that persisted through the week Indian benchmarks gained about half a percent in the late morning session and also on hopes that the Reserve Bank of India may announce a rate cut in its policy review later this month. The positively trending Asian bourses added to the confidence of the traders. Sentiments got some support on hopes of growth recovery in US after the number of Americans who filed for unemployment benefits declined to a six-week low, showing further improvement in the labour market. On the global front, Asian markets too were trading in fine fettle at this point of time led by over two percent surge in Japanese market as revised fourth-quarter gross domestic product figures of the country showed the economy returned to growth.

Back home, the traders were seen piling up positions in Oil & Gas, PSU and Metal, while selling was seen in IT and Tech sector. In scrip specific actions, M&M gained after Nashik plant workers ended their strike. L&T jumped after the company signed an agreement with CMI Energy for extension of its licence territory to sell small heat recovery steam generators to South East Asia and the Middle East. Peninsula Land surged on report that the Aditya Birla Group's real estate fund is close to buying a 50% stake in the company's 30-acre township project in Pune for over Rs. 115 crore. Shares of Rashtriya Chemical Fertilisers soared as the company launched its one-day offer for sale (OFS) at Rs 45 per share. Utility vehicles maker M&M rose on reports that the hike in excise duty on SUVs will not apply to sub-Rs. 10 lakh vehicles.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 5900 and 19500 levels respectively. 

The market breadth on BSE was showing positive trend with advances to declines in ratio of 1407: 688.

The BSE Sensex is currently trading at 19561.68, up by 148.14 points or 0.76% after trading in a range of 19581.95 and 19477.61. There were 25 stocks advancing against 5 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.75% and Small cap index was up by 0.83%.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.67%, PSU up by 1.35%, Metal up by 1.28%, FMCG up by 1.07% and Consumer Durables up by 1.04%.while, IT down by 0.71% and Tech down by 0.41%were the losers on the BSE.

The top gainers on the Sensex were Jindal Steel up by 3.35%, Hero MotoCorp up by 2.26%, HDFC up by 2.09%, Tata Steel up by 2.07% and Gail India up by 2.02%.

On the flip side, Infosys was down by 1.25%, Dr Reddys Lab was down by 0.88%, Tata Motors was down by 0.82% , TCS was down by 0.78% and Bajaj Auto was down by 0.20% were the top losers on the Sensex.

Meanwhile, the Government said that it will reduce outgo on subsides from 2.6 percent of GDP in 2011-12 to 1.5 percent by the end of 12th Five Year Plan (2012-17) through various reforms. The Government has also said that pre-determined limits would be set for subsidies. The expenditures on subsidies during the 11th Plan (2007-12) increased by 207 percent from around Rs 70,926 crore to Rs 2,17,941 crore in 2011-12.

Government feels that the high outgo on subsidies hurts the inclusive growth and it should be contained within pre-determined limits. With this move, the government will also achieve its fiscal deficit targets. The Finance Ministry has pegged the overall fiscal deficit in 2013-14 at 4.8 percent lower than the estimated 5.2 percent of GDP in current financial year.

Further, the government has said that reducing subsidies will not hurt the poor as some subsidies under the proposed Food Security Act will be pre-determined and others such as on fertilisers can be redesigned to serve their purpose at less cost. Subsidies on petroleum products which are untargeted and do not benefit the poor would need to be reduced. The government has made a provision of Rs 2, 31,084 crore on account of subsidy outgo in the Budget for 2013-14.  

The CNX Nifty is currently trading at 5,908.35 up by 45.05 points or 0.77% after trading in a range of 5,914.15 and 5,883.00. There were 43 stocks advancing against 7 declines on the index. The top gainers of the Nifty were BPCL up by 3.78%, Jindal Steel & Power up by 3.31%, GAIL up by 2.44%, Hero MotoCorp up by 2.41%, and HDFC up by 2.16%.

On the flip side, Infosys down by 1.22%, Dr Reddy's Laboratories down by 0.77%, TCS down by 0.56%, DLF down by 0.43%, Bajaj-Auto down by 0.27% and were the major losers on the index.

All Asian equity indices were trading in the green; Hang Seng surged 400.70 points or 1.76% to 23,172.14, Jakarta Composite strengthened 23.02 points or 0.47% to 4,871.32, KLSE Composite rose 0.93 points or 0.06% to 1,65186, Nikkei 225 soared 288.17 points or 2.40% to 12,255.87 and Taiwan Weighted was up by 48.98 points or 0.62% to 8,009.49.

On the flip side, Shanghai Composite declined 4.29 points or 0.18% to 2,320.00, Straits Times slipped 3.57 points or 0.11% to 3,292.76 and KOSPI Composite was down by 2.36 points or 0.12% to 2,002.04.