Nifty Gains 163 Points, Sensex rallies 500 points.....

It's a firm Friday as the Nifty rallies to 5800 on day one of the July series. Commodities and capital goods lead the upmove. The BSE Sensex is up 501.42 points or 2.66 percent at 19377.37, and the Nifty is up 147.15 points or 2.59 percent at 5829.50., gaining 123.65 points. About 1331 shares have advanced, 752 shares declined, and 132 shares are unchanged.

Jindal Steel (up 6.2 percent), BHEL (up 6 percent), Coal India (up 4.5 percent), Tata Motors and HDFC are lead gainers in the Sensex.

The FM clarifies that the government has only fixed output prices for gas and input prices for power and fertiliser will be fixed later. ONGC and Oil India come off highs due to fear of higher subsidy burden. Power and fertiliser companies get excited on the news.

Indian equity benchmarks extended gains in afternoon trade, rising more than 2.25 percent on further buying in index heavyweights like Reliance Industries and HDFC that gained 3.3 percent and 4 percent, respectively

Indian rupee rose above the 59.50 level, gaining 77 paise to 59.42 per dollar as against previous day's closing of 60.18 per dollar.

The appreciation seen in the Indian currency today is on the back of upbeat equity market, global risk-on sentiment and recent gas price hike

Govt approves hike in natural gas price to $8.4 per mbtu

Delivering a potential boost to the revenue of gas producers, the government has approved doubling of natural gas prices from the present $4.2 per million British thermal unit (mbtu) to $8.4 per mbtu from April 1, 2014. It is the first revision in gas prices in 3 years and will likely result in rise in power tariffs and fertilizer cost and will make CNG transportation more expensive. However, the price will still be lower than that of imported natural gas, which costs around $14.17 per mbtu.

The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh approved Rangarajan panel formula for pricing of gas and would be applicable for next five years. As per the Rangarajan formula, long-term and spot liquid gas (LNG) import contracts as well as international trading benchmarks will be used to arrive at a competitive price for India. The natural gas prices will be revised on the quarterly basis and for the April-June quarter of 2014, it comes to $8.4 per mbtu.

Further, the new price will be uniformly applicable to all public and private sector producers alike. The increase in gas prices will directly benefit these local producers. Earlier, Oil minister M V Moily said that the revision in rates was a contractual requirement which will help remove policy uncertainties and spur investments, citing that the current rate of $4.2 per mbtu is uneconomical to produce gas from deep-sea fields.

Rupee strengthens by 32 paise to 59.95

The rupee strengthened by 32 paise to 59.95 against the dollar versus the previous close of 60.19 after the Reserve Bank of India data showed that the current account deficit slowed to 3.8 per cent in the quarter ended March 31, 2013.

Also, data showing the US GDP grew 1.8 per cent against 2.4 per cent during the same period a year ago has raised investors’ hopes that the Fed may remain cautious in scaling back its $85-billion monthly bond-buying programme.

However, the rupee remains vulnerable to dollar outflows due to global as well as domestic factors. Foreign institutional investors (FIIs) have been persistently paring their investments in the equity and debt markets, which is weakening the Indian currency.

The interbank call money rates opened higher at 7.30 per cent from their previous close of 6.9 per cent.

The benchmark 7.16 government security (G-Sec), which matures in 2023, opened higher at Rs 97.48 from the previous close of Rs 97.26. Yields softened to 7.52 per cent from 7.55 per cent.

The 8.15 per cent government security (G-Sec), which matures in 2022, opened higher at 102.85 from the previous close of Rs Rs 102.65. Yields softened to 7.7 per cent from the previous close of 7.77 per cent.

Sensex spurts 296 points on RBI data, firm Asian cues

Indian markets surged over 1.5 per cent in the opening session on Friday due to heavy buying by funds and retail investors led by RBI data amid firm Asian cues.

At 9.15 a.m., the 30-share BSE index Sensex was up 295.88 points (1.57 per cent) at 19,171.53 and the 50-share NSE index Nifty was up 94.3 points (1.66 per cent) at 5,776.65.

Positive data from the Reserve Bank of India (RBI) on the value of the country’s transactions with the rest of the world propped up the domestic sentiment.

The current account deficit is a key component of the value of transactions with the rest of the world. The deficit moderated to 3.6 per cent of gross domestic product (GDP) in the January-March quarter, on the back of an increase in exports and a marginal decline in imports.

Asian stocks rose for the third consecutive session, with the regional benchmark index paring the first quarterly slump in a year, amid signs the Japanese and US economies are improving and assurances on stimulus efforts by the Federal Reserve.

Japan's Nikkei average jumped 3.2 per cent to its highest in nearly four weeks, egged on by upbeat data showing consumer prices stopped falling in May and labour demand reached its strongest level in five years.

Japan’s Nikkei 225 rallied 422.09 points or 3.19 per cent to 13,635.64 and Hong Kong’s Hang Seng jumped 213.85 points or 1.05 per cent to 20,653.93.

US stocks had ended higher yesterday as reports showed consumer spending rebounded, pending home sales soared to the highest level since 2006 and jobless claims declined last week.

Fed Bank of New York President William C. Dudley said the central bank may prolong its $85-billion monthly bond-buying programme should the economy fail to meet the central bank's estimates.