Benchmarks extend losses; Consumer Durables drag

Indian equity benchmarks extend losses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters taking cues from weak global counterparts. Traders were seen piling up positions in Oil & Gas, Metal and Realty while selling was witnessed in Consumer Durables, Capital Goods and Power sector stocks. In scrip specific development, Cadila Healthcare was trading weak on reports that the US Food and Drug Administration (FDA) has expressed concerns over the manufacturing process of at least one product at drug-maker’s Moraiya facility. HCL Technologies was trading in red after the company reported its dollar revenue for April-June quarter which was slightly below estimates. The market may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the current month i.e. July 2014 series to next month i.e. August 2014 series. The July 2014 F&O contracts will expire today i.e. July 31, 2014.

On the global front, the Asian markets were trading mostly in red, while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,800 and 26,100 levels respectively. The market breadth on BSE was positive in the ratio of 1409:1304 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 26033.38, down by 54.04 points or 0.21% after trading in a range of 26118.88 and 26002.88. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.50%, while Small cap index up by 0.38%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.77%, Metal up by 0.42%, Realty up by 0.39%, PSU up by 0.18% and HealthCare up by 0.17% while, Consumer Durables down by 0.72%, Capital Goods down by 0.64%, Power down by 0.48%, IT down by 0.40% and FMCG down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.70%, Tata Steel up by 2.01%, Reliance Industries up by 0.91%, Coal India up by 0.64% and Infosys up by 0.56%. On the flip side, L&T down by 1.40%, Hindalco Industries down by 1.19%, Wipro down by 1.16%, BHEL down by 0.97% and Tata Power down by 0.95% were the top losers.

Meanwhile, to improve the gas distribution infrastructure in the country, Oil Ministry is currently working on a new public-private-partnership (PPP) model for laying gas pipelines in the country. Finance Ministry during budget 2014-15 announced plans to double the country's gas pipeline network to 30,000 km to complete the national gas grid, mainly through the PPP model.

Oil Ministry has asked the Petroleum and Natural Gas Regulatory Board to initiate work on it. Further, the Board has already been authorised to call for bids for 9,000 km of pipeline infrastructure. PPP mechanism consists two models such as viability gap funding and tariff based funding and the board may opt for a consultant to determine which model will be suitable for the development of national gas grid. 

Under the tariff-based competitive bidding, project developers bid on the basis of a pre-fixed tariff with an option to keep a portion open for cost escalation. Whereas viability gap funding is essentially a subsidy to provide support to infrastructure projects that fall short of financial viability due to inability to raise tariffs to commercial levels and their long gestation period. Meanwhile, industry is of the view that board should go with viability gap funding model for gas infrastructure sector for certain segments as a particular zone or area may not have sufficient demand to make the project economically viable for the developer.

The CNX Nifty is currently trading at 7766.15, down by 25.25 points or 0.32% after trading in a range of 7791.85 and 7759.25. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.73%, Lupin up by 2.34%, Tata Steel up by 1.85%, BPCL up by 1.74% and IndusInd Bank up by 1.05%. On the flip side, HCL Tech. down by 3.26%, Asian Paints down by 1.83%, IDFC down by 1.63%, L&T down by 1.45% and Power Grid down by 1.26% were the top losers.

Asian markets were trading mostly lower; Taiwan Weighted slid by 1.39%; Nikkei 225 lost 0.16%; Jakarta Composite shed 0.19%; KOSPI Index offloaded 0.31% and FTSE Bursa Malaysia KLCI gave up 0.58%.

On the flip side, Shanghai Composite rose 0.93%, Hang Seng gained by 0.10%, Straits Times added 0.73%.

The European markets were trading in red; France’s CAC 40 lost 0.28%, UK’s FTSE 100 was down by 0.01% while, Germany’s DAX dropped by 0.73%.