Local barometer gauges erase early gains; trade flat with negative bias

Local barometer gauges, erasing all their early gains, were trading flat with negative bias on massive profit-booking in frontline blue chips stocks, tailing weak global counterparts. Meanwhile, sentiment also turned sour after overseas investors, who have played a key role in the near 23% gain in Indian markets so far this year, sold shares worth a net Rs 194 crore on Monday after three days of buying. Despite being into negative territory, Sensex and Nifty were holding above the crucial 21,150 and 7500 level. Meanwhile, broader indices outperforming larger peers were edging higher with gains in the range of 0.45%-0.85%.

On the global front, Asian shares struck a cautious tone as the double-whammy of a deepening conflict in Iraq and a gas dispute between Ukraine and Russia sapped investors' appetite for risk. Closer home, gains in stocks from Oil & Gas, Technology and Information Technology were offset by losses in stocks from Realty, Metal and Auto counters. Meanwhile, steel stocks, namely Tata Steel, Steel Authority of India (SAIL) and Jindal Steel & Power, were struggling in trade after ministry report underscored raw material supply crunch due to environmental constraints, mining caps, inadequate infrastructure may move iron ore and strain overall reserves position. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1465:857; while 97 shares remained unchanged.

The BSE Sensex is currently trading at 25170.96, down by 19.52 points or 0.08% after trading in a range of 25139.2 and 25251.8. There were 14 stocks advancing against 16 stocks declining on the index.   

The broader indices were trading in green; the BSE Mid cap index was up by 0.45%, while Small cap index up by 0.86%.   

The gaining sectoral indices on the BSE were Oil & Gas up by 0.81%, TECK up by 0.64%, IT up by 0.56%, PSU up by 0.44% and India Infrastructure Index up by 0.44%. While, Realty down by 0.64%, Metal down by 0.51%, Auto down by 0.3%, FMCG down by 0.3% and Healthcare down by 0.25% were the losing indices on BSE.   

The top gainers on the Sensex were ONGC up by 1.63%, Bharti Airtel up by 1.29%, Axis Bank up by 1.13%, Gail India up by 1.11% and TCS up by 0.61%. On the flip side, HDFC down by 1.81%, Tata Steel down by 1.7%, Mahindra & Mahindra down by 1.5%, Tata Power down by 1.38% and Hero MotoCorp down by 1.15% were the top losers.   

Meanwhile, steel Ministry’s latest report highlighted that Indian steel industry is likely to face raw material supply crunch in future. As per the report, concerns like environmental constraints, mining caps, inadequate infrastructure to move iron ore, and the strain on overall reserves could impact the raw material supply to domestic steel players.

Steel Ministry, in its report titled ‘Long-Term Perspectives for the Indian Steel Industry’ has projected that India’s iron ore demand will increase to 346 mt by 2025-26, assuming an 8 per cent growth in GDP. Thus, there is a need to relook at the policy framework to enable the domestic steel industry to capitalise domestic resources and turn it into a competitive advantage. The report further added that merchant iron ore mining industry will go for value addition and consume much of the iron ore themselves, which will complicate the supply line further and hit producers  particularly those having no captive mines and depend on small merchant markets.

Steel Industry’s report further noted that mega steel projects need to be set up in states like Jharkhand, Chhattisgarh and Odisha to take the country's production capacity of the metal to 300 million tonnes (MT) by 2025-26. Further, the country will have to work towards greater exploration, raising mining capacities and developing infrastructure, or else brace up for significant exports to achieve this ambitious capacity addition target, which can generate 3.15 lakh of direct employment. Currently, India's crude capacity for steel production is 96 MT per annum.

The CNX Nifty is currently trading at 7531.75, down by 1.8 points or 0.02% after trading in a range of 7516.25 and 7553.5. There were 24 stocks advancing against 26 stocks declining on the index.   

The top gainers on Nifty were HCL Technologies up by 2.47%, Cairn India up by 2%, ONGC up by 1.83%, Bharti Airtel up by 1.4% and Asian Paints up by 1.32%. On the flip side, DLF down by 1.83%, Tata Power down by 1.75%, HDFC down by 1.75%, Tata Steel down by 1.65% and Jindal Steel down by 1.48% were the top losers.   

Asian equity indices were trading mixed; Hang Seng declined 0.54%, Straits Times slipped by 17.43 points or 0.51%, Shanghai Composite decreased by 0.92%, FTSE Bursa Malaysia KLCI down by 0.01% and Jakarta Composite down by 0.08%. On the flip side, Nikkei 225 spurted by 0.29%, KOSPI Index soared 4.05 points or 0.20% to 1,997.64 and Taiwan Weighted increased 0.44%.