Equity markets continue to trade indolent in late morning deals

Local equity markets continue to trade indolent in late morning deals, with losses of close to 3/4 of a percent in absence of any supportive clues from regional counterparts. Benchmarks after a making a positive start with Infosys heralding the result season with a decent set of numbers, soon slipped into negative territory due to weakness of financial stocks and languished in red thereafter. Much above the street estimates, Infosys, India's second largest IT exporter, reported a consolidated net profit of Rs 2992 crore for the quarter ended March 2014, up 4 per cent from Rs 2875 in  previous quarter. Though, optimism of Infosys’ stocks spread across entire IT stocks, losses in Banking, Metal and Auto counters marred the sentiments. Sulking in red, both Sensex and Nifty were now trading below the crucial 22,500 and 6,750 levels respectively. Meanwhile, broader indices turning ambivalent were trading mixed at this point of time.

On the global front, Asian markets were mixed on Tuesday, with Wall Street providing a strong lead after rebounding from a two-day sell-off thanks to better-than-expected retail sales data. However, Hong Kong and Shanghai lagged the regional uptrend ahead of the release Wednesday of Chinese growth figures that are forecast to show a further slowdown in the economic giant.

Closer home, prevailing caution ahead of the release of headline inflation and retail inflation later in the day, is also discouraging investors of taking position in risky equities, especially in the rate sensitive banking and auto counters. On the macro-front, the month-on-month Consumer price index (CPI) for March is expected around 8.2 percent versus 8.1 percent and the wholesale price index (WPI) is seen higher at 5.2 percent. The market breadth on BSE was positive, out of 2,095 stocks traded, 1,061 stocks advanced, while 928 stocks declined on the BSE.

The BSE Sensex is currently trading at 22454.30 down by 174.66 points or 0.77% after trading in a range of 22737.31 and 22419.51. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.10%, while Small cap index up by 0.05%.

The top gaining sectoral indices on the BSE were, IT up by 1.12%, Teck up by 0.98% and Consumer Durables up by 0.04%, while Auto down by 1.45%, Bankex down by 1.20%, Metal down by 1.09%, Realty down by 0.98% and Oil & Gas down by 0.80% were the top losers on the sectoral index.

The top gainers on the Sensex were Infosys up by 1.55%, Bharti Airtel up by 1.34%, Wipro up by 1.17%, TCS up by 1.12% and Dr Reddys Lab up by 1.02%. On the flip side, HDFC was down by 3.23%, Tata Motors  was down by 2.24%,  Hindalco was down by 2.17%, HDFC Bank was down by 1.99% and Mahindra & Mahindra was down by 1.67% were the top losers on the Sensex.

Meanwhile, India’s power deficit for the month of March stood at 5,152 MW or 3.9 percent of the demand. The Central Electricity Authority (CEA) reported that country’s total peak power demand was 1,31,945 MW last month, of which 1,26,793 MW was met, leaving a peak power deficit at 5,152 MW.  However, the electricity shortage during peak hours witnessed a steep fall to 3.9 percent in comparison to 8.2% or 10,752 MW in March 2013. During the past twelve months, domestic power consumption remained flat owing to the prevailing economic slowdown. On the other hand, capacity addition has been robust in last couple of years, resulting in a low peak power deficit. 

Region wise, southern India was the most affected, registering a deficit of 5.7 percent or 2,181MW. Total electricity demand of the southern region comprising states Karnataka, Kerala,   Andhra Pradesh, Tamil Nadu, Puducherry, Lakshadweep, was 38,229 MW as against a supply of 36,048 MW. The electricity requirement in eastern states was 15,506 MW of which 15,214 MW was met, leaving the region with a shortage of 292 MW or 1.9 percent. The western region including states Chhattisgarh, Gujarat, Madhya Pradesh, Maharashtra and Goa, reported a power shortage of 2 percent as the demand of region was 40,374 MW against a supply of 39,558 MW. The demand in the country’s northern region was 35,725 MW, of which 33,978 MW was met, registering a power deficit of 1,747 MW or 4.9 percent. While, the north-eastern region registered a deficit of 96 MW as power demand was 2,110 MW and supply was 1,995 MW.

In India, electricity is produced with the help of coal, crude oil, water and natural gas. Acute coal shortages in the country has become primary reason for power deficit in the country as coal-fired plants account for 68% of India's installed electricity capacity. Presently, the Coal India (CIL) is the only producer of domestic coal accounting for around 80 percent of the domestic production. CIL is currently facing various mining issues which is impacting its coal production. India’s gas based installed capacity stands at nearly 8 percent at 20,000 MW of which around 6,000 MW is currently stranded because of unavailability of natural gas.

The CNX Nifty is currently trading at 6,727.40 down by 48.90 points or 0.72% after trading in a range of 6,813.40 and 6,711.75. There were 11 stocks advancing against 39 declining on the index.

The top gainers of the Nifty were United Spirits up by 11.31%, Infosys up by 1.56%, Bharti Airtel up by 1.33 %, TCS up by 1.21% and Wipro up by 1.20%. On the flip side, HDFC down by 3.30%, Tata Motors down by 2.68%, Jindal Steel & Power down by 2.48%, DLF down by 2.30% and M&M down by 2.19% were the top losers on the index.

Asian equity indices were trading mixed; Nikkei 225 rose 0.83%, Taiwan Weighted increased by 0.59%, Jakarta Composite surged by 0.19% and Straits Times was up by 0.99%. On the flip side, Shanghai Composite declined 1.01%, Hang Seng dropped 1.17% and KOSPI Composite slipped by 0.18%.