Benchmarks trade lower in early deals on F&O expiry day

Indian equity benchmarks are trading lower with a cut of over half a percent on the F&O expiry day as investors reacted negatively to the Cabinet Committee on Economic Affairs (CCEA) decision of deferring the gas price hike by three months, though some volatility and cover up can be seen in latter part of the trade. Meanwhile, commenting on the deferment of gas price issue, Law Minister Ravi Shankar Prasad has said that "the structure and mechanism of the price is needed to be reviewed." Sentiments also remained down-beat on the back of depreciation in Indian rupee against dollar. The rupee is trading at 60.15/16 in early deals versus its previous close of 60.1250/1350.

On the global front, the US markets bounced back and ended higher overnight, offsetting the weakness seen in the previous session, on optimism about an economic recovery. Traders overlooked the larger contraction in GDP in the first quarter with report of growth in the service sector in the month of June. The Asian markets too were trading mostly in the green at this point of time following firm cues from the US market which didn’t react negatively to the revised GDP data.

Back home, on the sectoral front, capital goods, auto and banking witnessed the maximum gain in trade, while oil and gas, public sector undertaking and realty remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was evenly divided; there were 936 shares on the gaining side against 932 shares on the losing side while 69 shares remain unchanged.

The BSE Sensex opened at 25217.69; around 96 point lower compared to its previous closing of 25313.74, and has touched a high and a low of 25309.33 and 25133.11 respectively. The index is currently trading at 25156.42, down by 157.32 points or 0.62%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has been evenly divided with 48.32% stocks advancing against 48.12% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices down by 0.22% and 0.16% respectively. 

The few gaining sectoral indices on the BSE were, Capital Goods up by 0.58%, Auto up by 0.26% and Bankex up by 0.08%, while Oil and Gas down by 3.36%, PSU down by 1.43%, Realty down by 0.85%, Infrastructure down by 0.51% and FMCG down by 0.36% were the top losers on the sectoral index.

The top gainers on the Sensex were Bajaj Auto up by 0.70%, Wipro up by 0.59%, L&T up by 0.58%, Axis Bank up by 0.55% and L&T up by 0.53%. On the flip side, ONGC was down by 5.54%, RIL was down by 3.12%, GAIL was down by 1.72%, HUL was down by 1.20% and Maruti Suzuki was down by 1.15% were the few losers on the Sensex.

Meanwhile, in order to boost sagging sentiments in steel and mining sectors, the government would set up a single-window mechanism to fast-track clearances for various projects to boost steel, coal and power production in the country. The decision was taken in an inter-ministerial coordination meeting attended by Coal and Power Minister Piyush Goyal, Coal and Power Minister Piyush Goyal and environment minister Prakash Javadekar.

Coal and Power Minister Piyush Goyal has stated that environment ministry would come out with a draft on coal mines located in areas designated as ‘inviolate’ by August this year. At present, 44 coal projects, both opencast and underground, and at least six steel projects are awaiting environmental and forest clearances.

By adding further, Piyush Goyal stated that some coal blocks can be auctioned specifically for the steel companies, while steel PSUs can continue to enjoy allocations through the government dispensation route. It is estimated that over Rs 4.4 lakh crore of investments are in the pipeline in the steel sector in Jharkhand, Orissa and Chhattisgarh and single-window mechanism is likely to translate these investments on the ground. The ministries also highlighted that, like special economic zones (SEZs), certain big mineral bearing areas can be demarcated as special mining zones exclusively for meeting the demands of the iron-ore starved plants.

The CNX Nifty opened at 7,554.10; about 15 points lower as compared to its previous closing of 7,569.25, and has touched a high and a low of 7,570.20 and 7,514.65 respectively. The index is currently trading at 7,528.20, down by 41.05 points or 0.51%. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were NMDC up by 1.08%, HCL Tech up by 0.92%, L&T up by 0.81%, Bajaj Auto up by 0.77% and Axis Bank up by 0.64%. On the flip side, ONGC down by 5.35%, BPCL down by 3.83%, Reliance down by 2.87%, GAIL down by 1.70% and Jindal Steel down by 1.44% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 soared 28.07 points or 0.18% to 15,294.68, Hang Seng gained by 212.57 points or 0.93% to 23,079.27, KOSPI Index increased 7.12 points or 0.36% to 1,988.89, Straits Times jumped by 14.40 points or 0.44% to 3,275.94, Jakarta Composite improved 20.71 points or 0.43% to 4,859.69, Shanghai Composite rose 10.64 points or 0.53% to 2,036.14 and Taiwan Weighted was up by 64.31 points or 0.70% to 9,306.47.

On the flip side, FTSE Bursa Malaysia KLCI was down by 5.74 points or 0.30% to 1,883.81.