Gas price hike boosts mkt: Sensex jumps 300 pts; rupee below 60

It’s a big day for the Indian markets after the government approved agreed to double natural gas prices to $8/mmBtu from April 2014 and as global stocks advanced on US.economic data. Globally, the Dow reclaimed its 15000 mark. Europe too extended its gains to close higher.Asian markets were trading higher on Friday morning with the Japanese market up nearly 3 percent on firm data.

The BSE Sensex jumped 285 points in opening trade at 19150, while the Nifty was up 85 points at 5750.

The BSE Small-Cap index and BSE Mid- Cap index was trading at 1%.

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RIL, Bharti Airtel, Bajaj Auto, HDFC Bank, Tata Power, Cipla, ONGC, Coal India, Tata Motors, ICICI Bank, HDFC, Hero MotoCorp, Maruti, are among gainers in Sensex and Nifty.

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Infosys, TCS, Wipro, HUL, Gail India, are among losers in Sensex and Nifty.

Teck, Bankex, FMCG PSU, Capital Goods, Realty, Oil and gas and Consumer Durables indices are the gainers. BSE, IT indices are the losers.

Expectedly, RIL, ONGC and the other oil & gas counters are the clear winners today. On the other hand, gas-based power generators are down as the move will lead to an increased cost of production. Power and fertiliser could cost more after April 2014. The hike in natural gas prices comes in after a period of three years. Long term investment climate for the sector is sure to see a marked improvement.

Reliance Industries shares are up around 4 percent, ONGC rose more than 7.5 percent while Oil India is up 7 percent. Cairn India gained marginally as its gas sales are miniscule in size.Most of these companies are likely to see their earnings improve because of gas price hike.

The rupee opened above the 60-mark but pulled back to 59.80 against the US dollar on back of a better current account deficit. According to Axis Direct, the new norm for the rupee will be between 57 and 59 against the dollar.

Meanwhile, the RBI announced ahead of schedule that the current account deficit (CAD) moderated to 3.6% of GDP in the January-March quarter thanks to an increase in exports and a marginal decline in imports. The rupee of course found reason to cheer after falling below the 60 per dollar mark on Wednesday. The fiscal deficit in rupees through May will be announced later in the day today.

Globally, the US Senate passed landmark immigration reform legislation that would offer a path to citizenship for an estimated 11 million people residing in the country illegally. The House of Representatives must pass the bill before it can become law.