Markets pares some early gains; trade marginally in green

Indian bourses after showing outperformance in early deals are consolidating in the noon trade, coming off their high points of the day due to the selling in defensive sector stocks amid mixed Asian cues. Selling witnessed in IT, teck and FMCG stocks dragged the markets lower, however major indices were managing to remain in green supported by the gains in metal, infrastructure and capital goods stocks. Sentiments got some support as the RBI Governor stated that India has enough foreign exchange reserves and is better prepared to deal with Iraq crises. Buying was also witnessed in oil and gas stocks as the Petroleum Ministry has planned to bring in policies that would ease the way for large foreign investments in the oil and gas sector. Metal was the top gaining index on the BSE up by 0.97% whereas IT was the top losing index trading down by 0.83%. Buying was broad based with both small cap and mid cap indices were trading up by over 0.70%. However, there was cautiousness among investors owing to the growing concerns over the crisis in Iraq and depreciation in rupee value against the dollar.

Cipla has gained over 3% to Rs 427 after the pharmaceutical company said it has acquired 60% stake in a new company in Sri Lanka for $14 million (nearly Rs 85 crore) to market its product in the country. Kotak Mahindra Bank has moved higher by nearly 4% to its record high level at Rs 972 after the private sector lender proposes to increase the ceiling limit of overseas investment to 40%. On the other hand, Ricoh India was locked in lower circuit for second day in a row, down 20% at around Rs 138 after the company said its delisting offer has failed.

On global front, Asian equity indices were trading mixed with Taiwan Weighted up by 0.43% and Jakarta Stock Index down by 0.28%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,600 and 25,500 levels respectively. The market breadth on BSE was positive, out of 2,647 stocks traded, 1,621 stocks advanced, while 932 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,536.98 up by 15.79 points or 0.06% after trading in a range of 25,609.28 and 25,490.56. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.74%, while Small cap index up by 0.90%.

The gaining sectoral indices on the BSE were Metal up by 0.97%, Infrastructure Index up by 0.92%, Consumer Durables up by 0.71%, Healthcare up by 0.66%, and Oil and Gas up by 0.65%. On the flip side, IT down by 0.83%, Teck down by 0.39%, FMCG down by 0.08% and Auto down by 0.05% were the losing indices on BSE.    

The top gainers on the Sensex were Cipla up by 3.62%, Hindalco Inds up by 2.34%, Gail India up by 1.85%, SSLT up by 1.74% and Axis Bank up by 1.50%. On the flip side, TCS down by 1.84%, Wipro down by 1.13%, Bajaj Auto down by 0.88%, Hero MotoCorp down by 0.82% and HDFC Bank down by 0.74% were the top losers on the BSE.

Meanwhile, amid concerns over declining foreign investments in India's oil and gas sector, Petroleum Ministry has planned to bring in policies that would ease the way for large foreign investments in the oil and gas sector. Assuring an overhaul to make policies predictable, transparent and fair to investors, Petroleum Minister Dharmendra Pradhan has stated that there is an urgent need to facilitate an increase in domestic oil and gas production and Ministry is in the process of ushering in a new exploration and production policy after amending the existing New Exploration Licencing Policy (NELP).

Petroleum Ministry proposes to replace NELP with a uniform licensing policy to facilitate production of all forms of hydrocarbons from oil to shale gas under a single policy regime. The Ministry also cleared that the next round of oil and gas block auctions will be offered with all statutory clearances that will derisk exploration activities to some extent. Under the 10th round of NELP, more than 1,48,000 square kilometres of exploration acreage has been identified for auction.

Globally, India ranks fourth in energy consumption and consumes about 4.5 percent of the world's primary energy in a year. Presently, India imports around 25 percent of total India’s natural gas demand and 80 percent of crude oil demand. India’s oil and gas demand has been increasing at a rapid pace and it has become imperative for government to take steps to enhance domestic energy production to meet the growing demand. However, Indian domestic natural gas production fell by 16.3 percent to 33.7 billion cubic meters from 40.3 bcm in 2013. India's oil production was remained unchanged at 894,000 barrels per day (42 million tonnes) in the previous year.

The CNX Nifty is currently trading at 7,642.30 up by 10.60 points or 0.14% after trading in a range of 7,663 and 7,620.25. There were 30 stocks advancing against 20 declining on the index.

The top gainers of the Nifty were Cipla up by 3.57%, Kotak Bank up by 2.89%, Hindalco up by 2.40%, SSLT up by 2.09% and Gail up by 1.81%. On the flip side, TCS down by 1.96%, Wipro down by 1.14%, Hero MotoCorp down by 0.91%, Sun Pharma down by 0.91% and Bajaj Auto down by 0.84% were the major losers on the index.

Asian equity indices were trading mixed; Hang Seng up by 0.04% to 23,211.90, Straits Times up by 0.11% to 3,276.88, Nikkei up by 1.02% to 15,128.87 and Taiwan Weighted up by 0.43% to 9,279.93. While, Jakarta Stock Index down by 0.28% to 4,895.97 and Shanghai Composite down by 0.44% to 2,057.46