Benchmarks continue weak trade in late afternoon session

Indian equity benchmarks trimmed minor loss but continued their weak trade in red on account of selling in frontline blue chip counters. The sentiments were on cautious note and stocks extended their losses after India Meteorological Department (IMD) on April 24, 2014, announced that the country will likely get below-normal levels of monsoon rain this year. Investors are also eyeing outcome of Federal Reserve’s monetary policy review scheduled for tomorrow i.e. April 30, 2014. Traders were seen piling positions in Realty, Consumer Durables and HealthCare stocks, while selling was witnessed in Metal, Bankex and Auto sector stocks. Hectic activity was witnessed in telecom stocks after Telecom Disputes Settlement and Appellate Tribunal (TDSAT) cleared the 3G intra-circle roaming agreements signed between Bharti Airtel, Vodafone India and Idea Cellular, saying the pacts didn’t violate any license conditions and also quashed the penalties levied on the three operators by the telecom department (DoT). In scrip specific development, SKS Microfinance was trading firm on reporting a net profit of Rs 27.11 crore in Q4, against Rs 2.70 crore in the same period of previous fiscal. Ranbaxy Laboratories was trading in green after foreign brokerage firm upgraded the stock to buy from reduce and raises its target price on back of its takeover by Sun Pharmaceutical Industries.

On the global front, the Asian markets were trading on a mixed note, while the European markets were too trading mixed. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,800 and 22,600 levels respectively. The market breadth on BSE was trading in green in the ratio of 1300:1291 while 128 scrips remained unchanged.

The BSE Sensex is currently trading at 22563.76, down by 67.85 points or 0.30% after trading in a range of 22,681.89 and 22,470.43. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices have added gains; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.56%.

The gaining sectoral indices on the BSE were Realty up by 1.35%, Consumer Durables up by 0.63%, HealthCare up by 0.26%, Capital Goods up by 0.15% and IT up by 0.11% while, Metal down by 1.66%, Bankex down by 0.69% Auto down by 0.68%, FMCG down by 0.44% and Power down by 0.19% were the top losing indices on BSE.   

The top gainers on the Sensex were Sun Pharma up by 0.80%, Coal India up 0.73%, BHEL up by 0.72%, Axis Bank up by 0.56% and L&T up by 0.47%. 

On the flip side, Tata Steel down by 3.79%, Hindustan Unilever down by 2.58%, Bajaj Auto down by 2.11%, Hindalco Industries down by 2.02% and Tata Power down by 1.20%.

Meanwhile, amid concerns over high selling prices of coal-bed methane (CBM), the government has informed that gas extracted from coal seams will be priced at equivalent to conventional gas, as the new Rangarajan formula will also apply to CBM. Presently, the actual CBM gas price that is being realised by industry players such as GEECL and EOL is much higher than the Government approved price.

Oil Ministry has notified that gas price advised through the new pricing guidelines 2014 based on the Rangarajan formula to treat as a floor price in case of CBM contracts. Therefore, the prices of CBM, shale gas and conventional gas will be equal and contractors cannot charge a higher price than this from their customers. The Ministry added that coal-bed methane contractors like GEECL and EOL will have to sell CBM gas at a uniform rate of $8.3 per mmBtu derived from the new Pricing Guidelines 2014.

The government had approved the formula under which all domestically produced gas will be priced at an average of the price prevailing at international gas trading hubs and the actual cost of importing liquid gas (LNG). Under the new approved pricing formula, the gas prices will get doubled at $8.30 per million British thermal unit from the current price at $ 4.20 per mbtu. New price will be uniformly applicable to all public and private sector producers such as Reliance Industries and ONGC. The increase in gas prices will directly benefit these local producers. Further, the move to raise gas prices is expected to benefit the government by around $2.2 billion incremental revenue by way of higher taxes. However, the implementation of new approved pricing formula has been deferred till completion of general elections.

The CNX Nifty is currently trading at 6,745.25, down by 16.00 points or 0.24% after trading in a range of 6,779.70 and 6,711.10. There were 22 stocks advancing against 26 declining on the index, while 2 stocks remained unchanged.

The top gainers of the Nifty were Grasim up by 2.27%, Ultratech Cement up by 1.96%, Ambuja Cement up by 1.92%, Tech Mahindra up by 1.58% and DLF up by 1.46%.

On the flip side, Jindal Steel down by 3.84%, Tata Steel down by 3.80%, HUL down by 2.74%, Hindalco Industries down by 2.12% and Bajaj Auto down by 2.05% were the major losers on the index.

Asian equity indices were trading mixed; Hang Seng up by 1.45%, Shanghai Composite up by 0.84%, Taiwan Weighted up by 0.71% while, Straits Times was down by 0.30%, Nikkei 225 down by 0.98% and Jakarta Composite down by 0.01%.

The European markets were trading on mixed note; France’s CAC 40 was down 0.02%, Germany’s DAX added 0.65% and UK’s FTSE 100 gained 0.42%.