Markets shed gains post Jan IIP data

The markets have shed some of their gains but continue to witness positive trades in late-morning deals with the BSE Sensex up 94 points at 17,597 and the Nifty at 5,355, up 22 points.

According to data released today, Index of Industrial Production or the IIP grew by 6.8% year-on-year in January 2012. In December 2011, the Index grew by just 1.8% year-on-year due to contraction in mining and capital goods sectors and a lower manufacturing sector growth.

Earlier in the day, the BSE benchmark index touched the day's high at 17,772 and the day's low at 17,570.

Meanwhile, the Asian markets have edged lower in trades with the Shanghai Composite and Hang Seng indices having declined nearly 1% each. The Nikkei index is down marginally 0.18% at 9,912.

On the sectoral front, BSE Capital Goods, Consumer Durables and Bankex indices, up nearly 2% each, are leading the gains.

The notable gainers from the Capital Goods space include L&T, Havells India and Punj Lloyd, up 3-4% each.

Banking shares have rallied on the bourses after higher than expected cut in the cash reserve ratio by the Reserve Bank of India (RBI), that would help ease the liquidity situation in the banking system. The RBI on Friday after market hours reduced the CRR — the portion of deposits banks have to keep with the central bank — by 75 basis points. This will infuse Rs 48,000 crore liquidity into the system. The prominent gainers from the space are SBI, IDBI Bank, Federal Bank and ICICI Bank, up 2-4% each.

Railway stocks have moved up on hopes of positive changes in the upcoming Railway Budget 2012. On Wednesday, March 14, Minister for Railways, Dinesh Trivedi would be presenting the Railway Budget for the financial year 2012-2013. From individual stocks, Titagarh Wagons has gained 1.3% at Rs 435. BEML has added 2.6% to Rs 685. Stone India is up 2.8% at Rs 36 while Kalindee Rail Nigam has moved up 2% to Rs 115.

On the Sensex, SBI has moved up 4% at Rs 2,304 and is the top gainer. Other prominent gainers include L&T, ICICI Bank, BHEL and Reliance Industries, up 2-4% each. L&T is extending its Friday's 5% rally after the Board decided to bifurcate the role of Chairman and Managing Director into two positions.

The losers from the pack were Cipla, Infosys, M&M, TCS and NTPC, down 1-2% each.

Among individual stocks, BF Utilities has surged 6.4% to Rs 416 on reports that Anil Ambani, the chief of ADA group has sold part of his personal stake in the company’s arm - Nandi Infrastructure Corridor Enterprises (NICE) for approximately Rs 300 crore, a five-times higher than acquisition cost of around Rs 60 crore seven years ago. BF Utilities holds 75% stake in NICE.

Tata Steel has gained nearly 1% at Rs 457, on reports that the leading steel maker has started preparations to begin underground chromite mining at its leasehold area in Sukinda valley in Jajpur district.

The overall market breadth is positive as 1,464 stocks have advanced against 764 declining ones, on the BSE.