Markets sulk in red with cut of over 0.50%; Oil & Gas stocks drag

After getting a weak start, local barometer gauges continued to languish in negative territory with losses of over half a percent, which dragged both Sensex and Nifty at their intra-day’s low, i.e., below their crucial 25,200 and 7,550 levels respectively. Fall of the markets were led by stocks from Oil & Gas counter, namely Reliance Industries, ONGC and Oil India, slumped after government deferred a decision on Wednesday to raise prices of locally produced gas for next three months, saying the matter requires more discussion. Further, Investors were cautious ahead of the monthly derivatives contracts expiry for June, on Thursday, also added to downbeat mood of the markets. Additionally, reports which suggested of drought-like conditions intensifying with the monsoon not moving an inch for 10 days now, leaving oilseeds, pulses and paddy fields parched and posing the threat of food inflation and weak rural demand in the first year of the Narendra Modi government, also acted as dampener for markets. However, the session turned out to be lenient with broader indices, which at this point of time were trading with gains of over one tenth.

On the global front, Asian shares swung higher on Thursday as weak U.S. growth seemed to further delay the day when interest rates might rise, pulling down bond yields globally and pushing investors toward riskier assets in desperate search for returns.

Closer home, while fall of markets were led by stocks from Oil & Gas counter, the losses were limited on account of gains of auto and consumer durable stocks, which gathered momentum after Finance Minister Arun Jaitley said India extended excise duty concessions for automobiles, consumer and capital goods. Besides, stocks from Power and banking counters also were limiting further slide of the markets. On the flip side, drubbing was also witnessed in PSU and Realty counters stocks. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1283:1107; while 104 shares remained unchanged. 

The BSE Sensex is currently trading at 25182.86, down by 130.88 points or 0.52% after trading in a range of 25129.06 and 25309.33. 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 0.18%, while Small cap index was up by 0.02%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.09%, Auto up by 0.37%, Power up by 0.15%, Bankex up by 0.13% and Consumer Durables up by 0.13%. While, Oil & Gas Index down by 2.99%, Public Sector Undertaking down by 1.26%, Realty down by 0.86%, Metal Index down by 0.24% and Information Technology down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.30%, Larsen & Toubro up by 1.29%, Dr. Reddy’s Lab up by 1.12%, Wipro up by 1.05% and Mahindra & Mahindra up by 0.82%. On the flip side, ONGC down by 5.12%, Reliance Industries down by 2.52%, HDFC down by 1.57%, Hindustan Unilever down by 1.22% and GAIL India down by 1.05% were the top losers.

Meanwhile, much against the speculations, the government clarified that it was not mulling raising prices of LPG and kerosene. Reports suggested of government mulling a proposal for raising prices of cooking gas by Rs 5 per cylinder and kerosene by Re 1 per litre on a monthly basis, which was aimed at wiping out the Rs 80,000 crore subsidy on the two fuels. However, the clarification came from the Oil Minister, Dharmendra Pradhan, right after the cabinet meeting on Wednesday.

Fuel subsidy causes the biggest hole in the exchequers’ pocket. In the current fiscal, subsidy on diesel, LPG and kerosene is estimated at Rs 115,548 crore. Out of which, LPG accounts for Rs 50,324 crore and kerosene Rs 29,488 crore. In 2013-14, the UPA government paid a staggering worth Rs 70,772 crore in cash subsidy, while upstream firms shelled out Rs 67,021 crore.

Presently, subsidy on LPG is a staggering Rs 432.71 per 14.2-kg cylinder and at Rs 5 per month hike would take 7 years to wipe out the subsidy, while a 1 per month hike on kerosene would take more than two-and-a-half years to wipe out the subsidy, which currently stands at Rs 32.87 per litre.  

The CNX Nifty is currently trading at 7,535.30, down by 33.95 points or 0.45% after trading in a range of 7514.65 and 7570.20. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were L&T up by 1.27%, Dr Reddy’s Lab up by 1.25%, Wipro up by 1.22%, BHEL up by 0.96% and M&M up by 0.73%, while ONGC down by 5.16%, Reliance Industries down by 2.74%, NTPC down by 1.69%, HDFC down by 1.49% and Gail India down by 1.41% were the top losers

Asian markets were trading mostly in the green; Nikkei 225 soared by 0.32%, Hang Seng gained by 0.89%, KOSPI Index increased by 0.43%, Straits Times jumped by 0.41%, Jakarta Composite added 0.27%, Shanghai Composite rallied 1.39% and Taiwan Weighted advanced 0.59%.  On the flip side, FTSE Bursa Malaysia KLCI was down by 0.29% was the lone loser on the index.