MARKETS GIVE UP GAINS

Benchmark equity indices, although near day's low, are trading in fine- fettle, on account of continued buying in Realty, Auto and Consumer Durable counters amidst positive regional counterparts.  Disappointing Q3 earnings from India's second largest public sector lender by market capitalization, Bank of Baroda mainly provided a lid to the further upside of the bourses. Hurt by higher provisioning for bad assets, Bank of Baroda's net profit for Q3FY13 declined by 21.58% at Rs 1011.62 crore as against Rs 1289.85 crore for the quarter ended December 31, 2011. The rub off effect of this scrip, was also felt across other PSU Bank stocks, namely, SBI, Punjab National Bank, etc, which were trading lower. Nevertheless, buoyant earnings, of ICICI bank, had kept private sector bank stocks in fine contour.

Thus, trimming part of early gains, benchmark 30 share index, Sensex, managing gains above 3/4 of percent, was trading above the psychological 19850 level. Likewise, barometer 50 share index, Nifty, on NSE, too was trading above its crucial 6000 mark. However, broader indices succumbing to selling pressure were trading on a mixed note.

On the global front, Asian shares climbed to 18-month highs on Monday after U.S. data showed some promise of a credible recovery, while momentum also gained on firmer manufacturing data from Europe and China. U.S. employment grew modestly in January and job gains in the previous two months were larger than first reported, while factory activity hit a nine-month high in January, data released on Friday showed

Closer home, much of the drubbing in PSU, Health Care and Power counters, were eating into the bourses' gains. Additionally, IT hardware sector too was trading in red after reports suggested of US Government objecting to India's plans of making it compulsory for Government agencies to source electronic products, including personal computers, printers and tablets. However, Oil refiners, viz, HPCL, and Indian Oil Corporation (IOC), which too gained on expectations of a diesel price hike announcement as early as this week after the government last month allowed companies to raise prices, had now succumbed to profit-booking. Meanwhile, Tata Motors and UltraTech Cement advanced over 3% after briefly plunging as much as 10 percent each on Friday, because of a technology trading glitch from brokerage Religare Capital Markets. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1348:1131, while 127 shares remained unchanged.

The BSE Sensex is currently trading at 19857.76 up by 76.57 points or 0.39% after trading in a range of 19902.60 and 19842.99. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.12% and Small cap index held up by 0.20%.

The top gaining sectoral indices on the BSE were, Realty up by 1.01%, Auto up by 0.96%, Consumer Durables up by 0.37%, Bankex and TECK were up by 0.17% each. While, PSU down by 0.83%, Health Care down by 0.68%, Power down by 0.54%, Metal down by 0.13% and Capital Goods down by 0.05% were the top losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.44%, HDFC up by 2.45%, ICICI Bank up by 2.13%, Jindal Steel up by 1.54% and Bajaj Auto up by 1.22%.

On the flip side, Dr Reddys Lab down by 1.89%, BHEL down by 1.73%, Cipla down by 1.49%, SBI down by 1.41% and Sterlite Industries down by 1.21% were the top losers on the Sensex.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) in its meeting scheduled to be held this week, is likely to discuss upon the government note on pooling the price of coal - blending the cost of domestic fossil fuel with the imported one.

A couple of days ago the Coal Ministry had circulated a Cabinet note on price pooling, inviting comments from various ministries -- Power, Steel, Shipping, Railways and Planning Commission among others. The Power Ministry, after consultation with the Central Electricity Authority (CEA), suggested to the Coal Ministry that the difference in the cost of imported and domestic coal should be added to the cost of indigenous fuel at the time of finalizing proposal for pooling coal prices. Meanwhile, Planning Commission suggested Coal India (CIL), to offset the impact of high import costs by adopting a pooling formula on prices by combining rates of imported and domestic coal.

According to the Central Electricity Authority's (CEA) recommendations, the difference in price of the imported and domestic coal would be transferred on to the cost of domestic coal. Imported coal is approximately priced at Rs 6,000 per tonne and domestic coal at Rs 4,500 per tonne. The approximate difference of Rs 1,500 per tonne, as per the suggestion, should be multiplied by the total quantity of coal to be imported, including the cost of transportation, and the entire sum would be divided on the basis of quality of coal to the power stations.

However, several state governments, including West Bengal and Odisha, have opposed CEA's proposal. Odisha government objected to the proposal stating saying it wasn't relevant to the power generating companies located very close to coal mines, likewise, West Bengal government raising objections to price-pooling,  conveyed to CIL that such a mechanism was not acceptable.

The S&P CNX Nifty is currently trading at 6,016.80, up by 17.90 points or 0.30% after trading in a range of 6,038.50 and 6,014.50. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Tata Motors up by 4.35%, UltraTech Cement up by 3.06%, HDFC up by 2.54% DLF up by 2.16%, and ICICI Bank up by 2.08%.

On the flip side, Bank of Baroda down by 6.65%, IDFC down by 3.63%, Lupin down by 1.92%, Dr. Reddy's Laboratories down by 1.81% and Cipla down by 1.79%were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite rose 0.34%, Hang Seng advanced 0.35%, KLSE Composite increased 0.32%, Nikkei added 0.32%, Straits Times jumped 0.40% , Taiwan Weighted surged by 0.86% and Jakarta Composite too gained 0.04%

On the flip side, KOSPI Composite down by 0.13%, was the lone loser amongst the Asian pack.