Stocks volatile ahead of economic survey

Mumbai: Equities see-sawed in early trade on Thursday as investors awaited key economic data later in the day that could outline a roadmap for economic policy measures.

State-run oil firms led by Oil and Natural Gas Corp were key gainers after India unexpectedly raised gasoline and diesel prices, while Reliance Industries was weak over uncertainty on a gas supply deal with a former group firm.

By 10.56 a.m. (0526 GMT), the 30-share BSE index was up 0.04 per cent to 14,651.59 points, with 20 components weakening.

The index opened up higher but quickly slipped to negative territory.

"Caution is visible in the market trend. There has already been a strong run-up, and that is weighing. Nobody is willing to hold onto large positions," said D.D. Sharma, senior vice president at Anand Rathi Securities.

"The real direction for the market will only come after the Budget," he said.

The annual economic survey is expected to be presented in Parliament around noon (0630 GMT) and could be an indicator to the policy direction to be outlined in the budget next week.

Investors expect the government to unveil pro-reform measures in the budget such as a auction of third-generation wireless spectrum and stake sales in state firms to raise cash.

Oil firms led the gains on hope of easing subsidy burden incurred from selling products at discounted rates. On Wednesday, the government raised petrol and diesel prices by as much as 10 per cent, the first increase this year.

ONGC shares were up 4.2 per cent at Rs 1,096.85, oil marketing firm Indian Oil Corp rose 3.1 per cent to Rs 558, Hindustan Petroleum Corp gained 2 per cent to Rs 317.50, while Bharat Petroleum Corp added 1.2 per cent to Rs 459.

Top aluminium producer Hindalco was up 1 per cent at Rs 84.25 after lenders agreed to relax terms of a $982 million bank loan. The stock had slumped on Wednesday after it reported profits fell sharply in 2008/09.

Among key losers, Reliance Industries was down 0.4 per cent to Rs 2,052 after it said it would appeal to the Supreme Court against a ruling to enter into a gas supply deal with former group firm Reliance Natural Resources Ltd on unfavourable terms.

Shares of auto firms were also weak on worries over higher fuel prices hitting demand for vehicles. Auto stocks had rallied on Wednesday as data showed most brands posted strong monthly sales growth.

Top car maker Maruti Suzuki was down 1.4.per cent at Rs 1,055.55, largest vehicles maker Tata Motors slipped 0.9 per cent to Rs 296.50, while two-wheeler maker Hero Honda fell 0.8 per cent to Rs 1,387.

Weekly inflation data, also expected around noon, is also in focus. A Reuters poll of analysts forecast the wholesale price index to have fallen 1.35 per cent in the 12 months to June 20.

In the broader market, 1,244 gainers outpaced 697 losers on average volume of 93 million shares.

The 50-share NSE Index was up 0.1 per cent at 4,295 points....