The Sensex today is trading higher by about 30 points (up 0.14%), while the NSE-Nifty is trading higher by about 10 points (0.1%). Stocks from the midcap and smallcap spaces are however faring better as the BSE Mid Cap and BSE Small Cap indices are up by about 0.2% and 0.6% respectively. The rupee is trading at 52.99 to the US dollar.
Oil and gas stocks are currently trading firm led by Essar Oil, Cairn India and Reliance Industries. As per a leading financial daily, state-owned oil companies have almost stopped producing premium or branded petrol or diesel due to widening price differential when compared with non-branded or ordinary fuel. Last month, the government slashed the excise duty on non-branded petrol by Rs 5.50 to Rs 9.28 per litre but left excise duty of Rs 15.96 per litre on branded petrol unchanged. In addition, the government made it mandatory for premium petrol and diesel to be priced at cost. This has led to escalation in price of branded petrol and diesel. Branded fuels contain imported additives that improve engine performance and reduce emission levels. Indian Oil corporation (IOC) sells premium fuels under the XtraMile brand whereas Speed and Power brands belong to Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL), respectively. IOC says that sales of branded petrol and diesel are almost zero and therefore it will produce branded fuels only if there is demand from dealers. Reportedly, the sales of branded fuels have been falling since 2009 after excise-duty hikes by the government. The reduction in sales of branded sales is likely to curtail earnings of fuel companies as premium products enjoy higher margins.
Inflation numbers - as measured by the wholesale price index (WPI) - for the month of September 2012 were announced. At 7.81%, inflation numbers are believed to be the highest in the year so far. The increase occurred due to higher prices of wheat, cereals and diesel. During the previous month i.e. August 2012, the figure stood at 7.55%. However, as compared to the same month last year, the figure is down by about 2.19% as the inflation stood at 10% in September 2011. Fuel and power inflation surged 11.88% from 8.32%, while food inflation declined to 7.86% from 9.14% in the previous month. As for the manufactured items, prices rose for cotton textiles, paper and paper products, rubber and plastic products.