Benchmarks trade lower in early deals on weak global cues

Indian equity benchmarks are trading lower in early deals on Wednesday as investors opted to book profits after two sessions of jubilation. Feeble global cues too dampened the sentiments. The US markets slumped again after a day of break and the Dow suffered triple digit cut on worries about the outlook for monetary policy, after the service sector activity expanded at a notably faster rate in July. The Asian markets too were trading in the red at this point of time that made a subdued start following weak US cues amid escalating tensions in Ukraine.

Back home, depreciation in Indian rupee against the dollar too dampened the sentiments. The rupee fell to a four-and-half month low on Wednesday morning as broad gains in the dollar versus other majors and Asian units hurt. However, losses remained capped as some support came in after the government said that the proposed new indirect tax regime, Goods and Services Tax, is likely to be introduced shortly. Minister of State for Finance Nirmala Sitharaman has said that Centre is consultation with states had decided to phase out CST to facilitate introduction of GST

Meanwhile, on a report that the failure to ink the WTO's trade facilitation agreement (TFA) may cost the global economy $820 billion and 16 million in terms of new jobs, industry body CII, backing the government stand has said that due importance should be given to trade facilitation, food security and LDCs issues while taking forward the outcomes of Bali Ministerial.

On the sectoral front, capital goods, consumer durables and infrastructure witnessed the maximum gain in trade, while banking, healthcare and fast moving consumer goods remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1269 shares on the gaining side against 654 shares on the losing side while 70 shares remain unchanged.

The BSE Sensex opened at 25892.55; around 16 point lower compared to its previous closing of 25908.01, and has touched a high and a low of 25829.08 and 25730.70 respectively. The index is currently trading at 25893.67, down by 14.34 points or 0.06%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a positive start with 63.67% stocks advancing against 32.81% declines. The broader indices were trading in the green; the BSE Mid cap index was up 0.43%, while Small cap index was up by 0.80%. 

The top gaining sectoral indices on the BSE were Power up by 1.11%, Capital Goods up by 1.09%, Consumer Durables up by 0.63%, Infrastructure up by 0.49% and IT up by 0.48%, while Bankex down by 0.64%, Healthcare down by 0.14% and FMCG down by 0.10% were few losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 1.93%, Infosys up by 1.45%, HUL up by 1.09%, L&T up by 0.90% and M&M up by 0.88%. On the flip side, Hero MotoCorp was down by 1.13%, ICICI Bank was down by 0.99%, ITC was down by 0.96%, Sun Pharma was down by 0.87% and Axis Bank was down by 0.84% were the top losers on the Sensex.

Meanwhile, amid concerns over increasing coal shortage in the country, Coal and Power Minister Piyush Goyal has stated that twenty-two coal-based power plants monitored by Central Electricity Authority (CEA) were reeling under fuel shortages with stocks to last less than four days as on 29th July. The Power Minister added that difficulties in supply of coal from Coal India subsidiaries due to law and order problems and deficient monsoon are the major reason for low coal stocks at power plants.

Power Minister revealed that owing to the deficit monsoon rainfall, the hydro electricity generation has reduced considerably. On the other hand, it has enhanced generation from coal-based stations to meet the country’s power requirements, increasing coal requirement by thermal power plants. During June 2014, there was a record growth of 20.35 per cent in coal-based generation as compared to same month last year. However, the minister assured that the government is taking measures to supply adequate coal to critical power plants to maintain generation.

Coal shortage in the country has become a concern for Indian power sector as coal-fired plants account for 59% of India's installed electricity capacity. Indian domestic coal demand is around 35 percent higher than domestic supply. Coal India (CIL) is the only producer of coal in the country and is struggling to meet domestic coal requirements. CIL production fell 4.21 percent short of its production target to 462.53 million tonnes in FY14 amid concerns like shutdown of mining activities in Talcher Coalfields in Odisha. The government has set coal production target at 507 million tonnes for Coal India (CIL) for FY15.

The CNX Nifty opened at 7,726.15; about 20 point lower as compared to its previous closing of 7,746.55, and has touched a high and a low of 7,739.60 and 7,715.80 respectively. The index is currently trading at 7,733.45, down by 13.10 points or 0.17%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were BHEL up by 1.86%, Infosys up by 1.40%, Power Grid up by 1.24%, HUL up by 1.06% and M&M up by 1.06%. On the flip side, ICICI Bank down by 1.08%, Sun Pharma down by 1.07%, ITC down by 1.05%, Hero MotoCorp down by 1.02% and Axis Bank down by 0.97% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 crumbled by 153.29 points or 1.00% to 15,167.02, Hang Seng slipped 151.68 points or 0.62% to 24,496.58, KOSPI Index dropped by 7.47 points or 0.36% to 2,058.79, Jakarta Composite decreased by 53.60 points or 1.05% to 5,055.49, Shanghai Composite dipped 10.16 points or 0.46% to 2,209.79, FTSE Bursa Malaysia KLCI contracted by 4.71 points or 0.25% to 1,871.98, Straits Times shed by 11.18 points or 0.34% to 3,316.49. and Taiwan Weighted was down by 26.92 points or 0.29% to 9,114.52.