STEADY

Indian equity markets have recovered a tad from intra-day's low level, scaled at the afternoon deals, as uptick of European futures, spurred optimism at Dalal Street.  Support, came to the bourses at low levels, after investor's indulged into value buying of select beaten down fundamentally strong blue chip stocks.  Meanwhile, gains of Bankex, Technology, Oil & Gas counters also supported the uptrend of the bourses, ever since its gap up opening. 30 scrip sensitive index of Bombay Stock Exchange (BSE)-Sensex- gaining close to 50 points, was holding off to 17250 bastion, while the widely followed index of National Stock Exchange (NSE)-nifty- also held onto its 5250 crucial level. However, broader indices, bucking the trend, trimmed gains. Further, stocks from Metal, Consumer Durable and Fast Moving Consumer Goods counters remained the weak spells of the trade.

Much of the shore up came to Indian bourses with the prop-up of regional counterparts. Asian pacific shares jumped after China's second-quarter gross domestic product data landed in line with forecasts. China's economy grew 7.6 percent in the April-June quarter from a year earlier, the slowest pace since the January-March quarter of 2009.

Closer home, however, the bourses could fall back into correction mode, as Moody's downgrade of Italy's credit rating to near-junk status just ahead of a bond auction, which threatens to reinforce fears over Europe's debt crisis, could sap into the  risk appetite of the investor's going later in the day, rather  on the last trading session of the week. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1439:1029, while 119 shares remained unchanged.

The BSE Sensex is currently trading at 17,276.31, up by 43.76 points or 0.25% after trading as high as 17,342.88 and as low as 17,263.36. There were 18 stocks advancing against 11 declines on the index and one remained unchanged.

The broader indices too trimmed some of the gains; the BSE Mid cap index up 0.34% while Small cap index was up 0.48%.

The top gainers on the BSE sectoral space were, Bankex up by 0.55%, TECk up by 0.39%, Oil & Gas down by 0.35%, PSU down by 0.33% and Information Technology down by 0.24%, while Metal down by 0.47% , Consumer Durables down by 0.37%, Fast Moving Consumer Goods down by 0.32% and  Realty down by 0.19% were top losers on the index.

TCS up by 1.74%, Cipla up by 1.39%, Gail India up by 1.35%, HDFC Bank up by 1.23%, and Hero MotoCorp up by 1.19% were the major gainers on the Sensex, while Jindal Steel down by 1.82%, Maruti Suzuki down by 0.87%, Infosys down by 0.72%, Sun Pharma down by 0.65% and Tata Power down by 0.60% were the major losers in the index.

Meanwhile, in a bid to rein in the burgeoning fiscal deficit, the government is likely to hike the price of heavily subsidized and widely used fuels such as diesel, after the much awaited presidential election on July 19, as the downgrade sword continues to hang around the neck of India's sovereign rating. However, any decision is unlikely to be taken by the government, with thin majority, before elections for the two top constitutional posts, at the altar of economic policies. It is reported that diesel prices could be hiked either after presidential election on July 19 or after appointment of the new vice-president on August 7, 2012. 

The speculation is rife that the government this time around may go for Rs 5 per litre hike, after being forced to partially roll back Rs 7.54 hike in petrol prices on May 23, following strong backlash by Opposition parties as well as a UPA ally, the Mamata Banerjee-led Trinamool Congress.

The ministerial panel on fuels, back in June 2010, took a bold, in principle decision to deregulate diesel prices. But the development on this decision has been static in backdrop of political unfeasibility in the labyrinth of coalition politics. However, the government this time around, is left with no-option, rather than hiking diesel prices, to prevent downgrade of India's sovereign rating by Standard & Poor's (S&P), which could trigger an exodus of foreign investors.  Further, the government, which is estimated to be shouldering diesel subsidy burden of around Rs 80,000 crore annually, is also estimated to have cooking gas and Kerosene price hike on cards.

Back in April, citing slow progress on its fiscal situation, as well as deteriorating economic indicators, Ratings agency S&P slashed India's outlook to negative from stable, with a further threat to downgrade India's country's credit rating to junk status on account of falling growth prospects for Indian gross domestic product, and political paralysis threatening fiscal reforms. S&P in all serves a 90 day's notice to governments to take corrective action, with around two months of the notice period remaining for India, after its outlook was rated negative, the uproar for price hike gains momentum.  

The  S&P CNX Nifty is currently trading at 5,248.45, up  by 13.20 points or 0.25% after trading as high as 5,267.15 and as low as 5,242.25. There were 27 stocks advancing against 23 declines on the index.

The top gainers on the Nifty were TCS up by 1.86%, Gail India up by 1.44%, Cipla up by 1.36%, HDFC Bank up by 1.33% and IDFC up by 1.17%. Meanwhile, Jindal Steel down by 167%, Maruti down by 0.96%, BPCL down by 0.77%, Tata Power down by 0.74% and Infosys down by 0.64% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng index gained 0.45%, Nikkei 225 added 0.05%, Seoul Composite Index shot up by 1.54, Strait Times added 0.48%, Jakarta Composite gained 0.79% and KLSE Composite rose 0.04% while Shanghai Composite inched up by 0.07% On the flip side, Taiwan Weighted down by 0.37% was the lone loser amongst the Asian pack.

Meanwhile, European markets got off to a positive start, CAC 40 gained 0.22%, DAX was up by 0.30% and FTSE 100 added 0.11%.