Markets continue to trade in negative territory

Indian bourses continued to trade in red in the afternoon session as selling momentum in the equities persisted, though the losses were capped and marginal recovery from day's low levels was seen as buying appeared in defensive sector stocks such as IT, Tech and healthcare. Sharp profit booking witnessed in frontline blue chip stocks dragged the markets lower and most of the major indices were trading in red. Depreciation in rupee value against the dollar and weak global cues dented the investors’ sentiments. Selling was broad based as both mid and small cap indices were trading down by over 1.30%. Traders did not pay heed to significant improvement in country’s current account deficit figure and were selling stocks. India's Current Account Deficit (CAD) narrowed sharply to $1.2 billion, or 0.2 percent of GDP in the January-March quarter of FY14 as compared to $18.1 billion, or 3.6 percent of GDP in the same quarter of previous fiscal. Realty was the top losing index on BSE down by 2.99% followed by power and oil and indices both trading down by over 2.70%.

Gail India was the top loser on BSE down by around 4% to Rs 394 after reporting a lower than expected net profit at Rs 972 crore for Q4 FY14 due to lower volumes. On the other hand, Sonata Software has rallied around 14% to Rs 50.65 after reporting over three-fold jump in consolidated net profit at Rs 23.57 crore for Q4FY14. Orbit Corporation, extending its previous day’s 15% fall, rose around 9% to Rs 19.80, after IFCI sold over three million shares in past one week through the open market.

On global front, major Asian equity indices were trading mixed with Hang Seng down by 0.11% and Jakarta Index down by 0.18%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,400 and 25,000 levels respectively. The market breadth on BSE was negative, out of 2,567 stocks traded, 798 stocks advanced, while 1,682 stocks declined on the BSE.

The BSE Sensex is currently trading at 24,526.76 down by 190.12 points or 0.77% after trading in a range of 24,777.31 and 24,422.33. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.39%, while Small cap index down by 1.71%.

The gaining sectoral indices on the BSE were IT up by 0.89%, Teck up by 0.48% and Healthcare up by 0.28%. While, Realty down by 2.99%, Power down by 2.79%, Oil and Gas down by 2.77%, Metal down by 1.64% and Auto down by 1.41% were the losing indices on BSE.   

The top gainers on the Sensex were Infosys up by 1.65%, L&T up by 1.35%, Wipro up by 1.28%, Dr Reddy’s Lab up by 0.48% and Tata Steel up by 0.39%. On the flip side, Gail India down by 6.55%, BHEL down by 4.32%, M&M down by 2.95%, NTPC down by 2.75% and ONGC down by 2.55%.

Meanwhile, in a bid to boost the domestic power production, Power Ministry has highlighted that ensuring 24-hour power supply and easing fuel shortages to increase power production should be the top focus of new government. The government should take steps to tap the country's vast hydro power potential, reform the distribution sector and ensure the financial viability of distribution companies, Ministry added. The Ministry further said that the new government should review the cancellation of coal blocks for power projects in advanced stages of implementation, increase domestic production of gas, cap the rise in power tariffs due to a proposed gas price hike and offer financial relief to power generation projects which are stranded because of the unavailability of fuel supplies.

Power Ministry suggested that coal fuel shortages can be mitigated by expeditiously granting environment and forest clearances to coal mines. Acute coal shortages in the country have become primary reason for power deficit as coal-fired plants account for around 68% of India's total installed electricity capacity at 2.45 lakh MW. Capacity addition for thermal plants in the country has slowed down because of staggered domestic coal production which is mainly impacted by delays in land acquisition, environment and forest approvals and concerns over the execution of mining leases by states.

Regarding the hydro projects, the Ministry noted that the sluggish hydro power generation is mainly due to law and order issues in the concerned states, adverse weather and natural calamities and resultant contractual issues. Therefore, to boost the hydro sector, new government should take measures like providing timely environment and forest clearances, providing special financial incentives for hydel plants and improving infrastructure connectivity in states with potential for big hydro power projects. During the 12th Plan period (2012-17), the government has set a capacity addition target of 10,897 MW for hydro power generation of which 1,559 MW has been achieved so far. In the 11th Plan period, 5,544 MW of hydro capacity were added against a target of 15,627 MW.

Power Ministry further recommended that reforms can be introduced in the sector by amending the Electricity Act 2003 to allow power consumers to choose their power suppliers. Ministry suggested the new government that periodic power tariff determination by regulators should be enforced without delay and grid safety and security can be ensured by enhancing penalties for non-compliance of grid discipline.

The CNX Nifty is currently trading at 7,304.90 down by 54.15 points or 0.74% after trading in a range of 7,372.95 and 7,274.75. There were 17 stocks advancing against 33 declining on the index.

The top gainers of the Nifty were Infosys up by 1.65%, HCL Tech up by 1.24%, L&T up by 1.11%, Lupin up by 1.11% and Jindal Steel up by 1.06%. On the flip side, Gail India down by 6.84%, BHEL down by 4.34%, IDFC down by 3.33%, M&M down by 3.16% and DLF down by 2.72% were the major losers on the index.

Asian equity indices were trading mixed; Nikkei 225 up by 0.43% to 14,664.96,Taiwan Weighted up by 0.21% to 9,055.29 and Shanghai Composite up by 0.08% to 2,043.17. While, Hang Seng down by 0.11% to 22,938.26, Jakarta Index down by 0.18% to 4,963.92 and Straits Times down by 0.18% to 3,276.84.