Benchmarks trim gains to trade in red

Indian equity benchmarks pared gains and started trading in red in the late afternoon session taking cues from regional counterparts. Investors preferred being on the sidelines on account of Iraq turmoil after US President Barack Obama stated yesterday that he was sending up to 300 US military advisers to Iraq. Foreign funds too were adopting a cautious approach, amid concerns that rising global crude prices will fuel inflation and raise import bill and hurt country’s economic growth. Traders were seen piling up positions in Consumer Durables, Oil & Gas and Realty while selling was witnessed in HealthCare, Capital Goods and Auto sector stocks. In scrip specific development, ICRA was trading firm after Moody’s Corporation secured a majority equity stake in the Indian company after the completion of a voluntary open offer. Moody’s increased its stake in ICRA from 28.51% to 50.06%.

On the global front, the Asian markets were trading mostly in red, while the European markets traded mostly on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,550 and 25,200 levels respectively. The market breadth on BSE was negative in the ratio of 1340:1478 while 95 scrips remained unchanged.

The BSE Sensex is currently trading at 25198.47, down by 3.33 points or 0.01% after trading in a range of 25276.31 and 25140.97. There were 13 stocks advancing against 17 stocks declining on the index.   

The broader indices were trading on a mixed note; the BSE Mid cap index was up by 0.21%, while Small cap index was down 0.10%.   

The gaining sectoral indices on the BSE were Consumer Durables up by 3.08%, Oil & Gas up by 0.54%, Realty up by 0.53%, Metal up by 0.48% and India Infrastructure Index up by 0.38% while, HealthCare down by 0.92%, Capital Goods down by 0.38%, Auto down by 0.22% and FMCG down by 0.12% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Steel up by 1.37%, Axis Bank up by 1.35%, Coal India up by 1.10%, ONGC up by 0.95% and Bajaj Auto up by 0.92%. On the flip side, Sun Pharma down by 1.98%, Tata Power down by 1.49%, Mahindra & Mahindra down by 0.91%, Wipro down by 0.79% and HUL down by 0.54% were the top losers.

Meanwhile, Coal and Power Minister Piyush Goyal has expressed the need to increase the domestic coal production by sorting out environmental issues in order to meet the rising demand. Power Minister has stated that lack of favorable policies over the past couple of years has impacted the domestic coal production and it has become imperative to take measure soon to improve the situation. 

Piyush Goyal also stated that presently coal ministry is in conversation with environment ministry and both ministries are planning to take measures soon to resolve environment concerns, impacting coal mining in the country. By adding further, Coal and Power Minister  stated that to enhance coal production, ministry is also looking at other ways such enhancing morale of coal India employees through giving more incentive. Minister also ensures that there would be an improvement in coal quality in coming future.

India is world's fifth largest in terms of reserves and the third-largest producer of coal. Over the past few years, India domestic production has failed to keep pace with increasing domestic demand. Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. Acute coal shortages in the country have become primary reason for power deficit as coal-fired plants account for 68% of India's installed electricity capacity. Presently, Coal India (CIL) is the only producer of domestic coal accounting for around 80 percent of the domestic production. Meanwhile, in order to meet India’s growing coal demand, the government has planned to allot coal mines directly to private players under public-private partnership (PPP) mode, which would also end the monopoly of public sector unit Coal India.

The CNX Nifty is currently trading at 7536.45, down by 4.25 points or 0.06% after trading in a range of 7560.55 and 7520.10. There were 17 stocks advancing against 33 stocks declining on the index.  

The top gainers on Nifty were Mcdowell-N up by 2.80%, Cairn India up by 1.61%, Kotak Bank up by 1.55%, Coal India up by 1.52% and Axis Bank up by 1.31%. On the flip side, Sun Pharma down by 2.26%, Lupin down by 1.48%, Tata Power down by 1.44%, PNB down by 1.07% and M&M down by 0.99% were the top losers.

Most of Asian equity indices were trading mostly in red; Straits Times down by 0.22%, Nikkei 225 down by 0.08%, Taiwan Weighted down by 0.46%, Jakarta Stock Index down by 0.03%. On the flip side, Shanghai Composite was up by 0.15% and Hang Seng up by 0.11%.

The European markets were trading mostly in green; Germany’s DAX added 0.02%, UK’s FTSE 100 was up by 0.27% while France’s CAC 40 lost 0.06%.