Benchmarks trade in fine fettle in morning deals

Extending their previous session’s jubilation, Indian equity benchmarks are trading in fine fettle in early deals ahead of the Reserve Bank of India’s (RBI) policy meeting. Though, the RBI is expected to keep interest rates steady at a policy review today. The tone is likely to be less dovish than at the RBI last policy meeting in June. Some support came in after Finance Secretary Arvind Mayaram said that though achieving fiscal deficit target of 4.1 per cent is a "tough task" but the government will be able to meet it, as there are "clear signs" of economy picking up, leading to buoyancy in revenue realisation.

On the global front, the US markets despite losing some strength going into the close managed a close in green, mainly on the back of bargain hunting and on news that Portugal’s central bank announced a plan to rescue troubled lender Banco Espirito Santo. The Asian markets were trading mostly in the red at this point of time as traders remained concerned with a report showing purchasing managers’ index of China’s non-manufacturing sector falling to the lowest reading going back to August 2011.

Back home, on the sectoral front, healthcare, auto and fast moving consumer goods witnessed the maximum gains in trade, while realty, consumer durables and capital goods remained the top losers on the BSE sectoral space. The broader indices too trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1139 shares on the gaining side against 593 shares on the losing side while 75 shares remain unchanged.

The BSE Sensex opened at 25817.84; around 94 point higher compared to its previous closing of 25723.16, and has touched a high and a low of 25829.08 and 25730.70 respectively. The index is currently trading at 25780.78, up by 57.62 points or 0.22%. There were 22 stocks advancing against 8 declines on the index.

The overall market breadth has made a positive start with 63.03% stocks advancing against 32.82% declines. The broader indices too were trading in the green; the BSE Mid cap index was up 0.30%, while Small cap index was up by 0.47%. 

The top gaining sectoral indices on the BSE were Healthcare up by 0.80%, Auto up by 0.56%, FMCG up by 0.41%, TECk up by 0.35% and PSU up by 0.34%, while Realty down by 0.26%, Consumer Durables down by 0.25%, Capital Goods down by 0.12% and Power down by 0.05% were few losers on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 2.15%, Bajaj Auto up by 1.62%, ONGC up by 1.41%, Hindalco up by 1.29% and M&M up by 1.14%. On the flip side, Hero MotoCorp was down by 1.45%, HDFC was down by 1.26%, RIL was down by 0.37%, Bharti Airtel was down by 0.34% and L&T was down by 0.19% were the top losers on the Sensex.

Meanwhile, the government is likely to finalize policy on utilisation of surplus coal from captive mines by the next month. The government has prepared a draft and has been circulated to various ministries/departments for obtaining their comments. The move came after reports of sale of surplus coal by some private parties in open market against norms of captive coal block use.

According to the Coal Mines (Nationalisation) Act, 1973, there is no provision of sale of coal from the coal blocks allotted for captive use. The government can take appropriate action against the allocattee company including de-allocation of the block that violates norms of the use of surplus coal. Recently, the government came to know about the sale of coal in open market from Takli Jena Bellora (South Part) coal block allocated to private firm Central Collieries Company for captive use. Earlier, in the backdrop of the govt's proposed surplus coal policy, Power Ministry has also asked private firms to return excess fuel mined from captive blocks to state-run Coal India.

Coal is dominant fuel used for power production in the country. Coal-fired plants account for 59% of India's installed electricity capacity. In order to enhance the domestic coal production, government has been allocating coal mines to private players. Indian domestic coal demand is presently 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.

The CNX Nifty opened at 7,706.65; about 23 point higher as compared to its previous closing of 7,683.65, and has touched a high and a low of 7,714.45 and 7,683.80 respectively. The index is currently trading at 7,702.90, up by 19.25 points or 0.25%. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Ambuja Cement up by 2.15%, Sun Pharma up by 2.07%, Bajaj Auto up by 1.85%, ACC up by 1.64% and ONGC up by 1.40%. On the flip side, Hero MotoCorp down by 1.18%, HDFC down by 0.77%, Power Grid down by 0.72%, HCL Tech down by 0.63% and Cairn down by 0.56% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 tumbled by 52.96 points or 0.34% to 15,421.54, Hang Seng slipped 28.54 points or 0.12% to 24,571.54, KOSPI Index declined by 8.32 points or 0.40% to 2,072.10, Jakarta Composite decreased by 10.37 points or 0.20% to 5,108.88, Shanghai Composite dipped 6.91 points or 0.31% to 2,216.42, FTSE Bursa Malaysia KLCI contracted by 1.19 points or 0.06% to 1,874.61 and Taiwan Weighted was down by 158.55 points or 1.70% to 9,171.64.

On the flip side, Straits Times was up by 9.06 points or 0.27% to 3,327.46.