Benchmarks continue to depict signs of fatigue; Nifty consolidates below 7900 level

Frontline equity indices continued to show signs of fatigue after previous two sessions of record high run, with both Sensex and Nifty languishing into negative territory, were trading below the psychologically crucial 26,400 and 7,900 levels respectively, with loss of around two tenths of a percent. However, trend was different for broader indices, which outperforming larger peers, were trading with gains in the range of 0.15%-0.95%. Besides absence of positive triggers at home front, cautious European market’s start was also underpinning market-participants on trimming their exposure in risk equities.

On the global front, despite positive handover from Asian counterparts, European stocks got off to a cautious start on Wednesday, halting a sharp two-day rally as investors take a breather ahead of the U.S. Federal Reserve's minutes of its July policy meeting which could give insight on the outlook for interest rates.

Closer home, majority of the sectoral indices on BSE succumbed to selling pressure, nevertheless prominent losers were stocks from Oil & Gas, FMCG, PSU and Capital Goods counters which took maximum beating. On the flip side, stocks from Metal, Information Technology and Power counters hogging much of limelight were the top gainers of BSE. In stock-specific activity, IOC, BPCL and HPCL too lost on account of profit-booking after recent reports suggested of delayed prospect of deregulation of the nation's most consumed fuel, losses on sale of diesel have risen to Rs 1.78 per litre after dipping to an all-time low of Rs 1.33 a litre in first half of August. Meanwhile, sentiment for banking stocks soured on account of hefty losses in stocks of Dena Bank and OBC after reports suggested that the Union finance ministry has unearthed a scam involving public sector banks. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1033:855; while 25 shares remained unchanged.

The BSE Sensex is currently trading at 26369.68, down by 50.99 points or 0.19% after trading in a range of 26332.25 and 26504.52. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices continued to outperform; with BSE Mid cap index trading up by 0.18% and Small cap index surging 0.93%.

The gaining sectoral indices on the BSE were Metal up by 0.22%, IT up by 0.21%, TECK up by 0.18% and Power up by 0.16% while, Oil & Gas down by 0.64%, FMCG down by 0.59%, PSU down by 0.52%, Capital Goods down by 0.51% and Auto down by 0.41% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 3.11%, Cipla up by 2.76%, Dr. Reddys Lab up by 2.12%, Wipro up by 1.22% and Tata Steel up by 0.95%. On the flip side, ONGC down by 2.03%, Hindustan Unilever down by 0.99%, Mahindra & Mahindra down by 0.99%, SBI down by 0.98% and GAIL India down by 0.94% were the top losers.

Meanwhile, delaying the prospect of deregulation of the nation's most consumed fuel, losses on sale of diesel have risen to Rs 1.78 per litre after dipping to an all-time low of Rs 1.33 a litre in first half of August. Loss widened to Rs 1.78 per litre based on average international oil price and foreign exchange rate in the first half of the month.

Diesel prices have been hiked every month by up to 50 paise per litre to trim the losses and the rates so far have cumulatively risen by Rs 11.24 per litre in 18 installments since January 2013 when the previous UPA government had decided on small monthly hikes.

Back in January 2013, UPA government decided to raise diesel prices in small doses of 40-50 paise per litre every month till the losses, which are made good through government subsidy, are completely wiped out.

The monthly system of hike had trimmed losses to less than Rs 3 per litre in May last year before a fall in rupee value enlarged the losses on diesel sale to Rs 14.50 per litre in September 2013. Nevertheless, the losses have shrank rapidly since March as the prospect of a stable and decisive government under Prime Minister Narendra Modi helped the rupee gain against the dollar.

Meanwhile, the losses on diesel sales stood at Rs 4.41 a litre after Modi government came to power in May and further fell to Rs 1.62 a litre in the second half of June, only to double to Rs 3.40 in first fortnight of July. Post to which, the losses fell to Rs 2.49 in second half of last month.

Besides diesel, the oil firms are losing Rs 32.98 a litre on kerosene and Rs 447.87 on LPG and the under-recoveries for the financial year 2014-15 are projected to be Rs 91,665 crore against Rs 1,39,869 crore in 2013-14.

The CNX Nifty is currently trading at 7885.70, down by 11.80 points or 0.15% after trading in a range of 7872.05 and 7922.70. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds. up by 3.24%, Cipla up by 2.71%, Lupin up by 2.13%, Dr. Reddys Lab up by 2.06% and Kotak Mahindra Bank up by 1.40%. On the flip side, ONGC down by 1.98%, IDFC down by 1.41%, Ultratech Cement down by 1.16%, PNB down by 1.10% and Axis Bank down by 1.09% were the top losers.

Asian markets were trading mostly into green; with FTSE Bursa Malaysia KLCI rising by 1.6 points or 0.09% to 1,873.76; KOSPI Index gaining by 1.64 points or 0.08% to 2,072.78; Nikkei 225 inching higher by 4.66 points or 0.03% to 15,454.45; Jakarta Composite edging higher by 9.87 points or 0.19% to 5,175.04; Straits Times advancing 10.19 points or 0.31% to 3,326.62; Hang Seng adding 30.19 points or 0.12% to 25,153.14 and Taiwan Weighted puffing up gains of 44.27 points or 0.48% to 9,288.05. On the flip side, Shanghai Composite down by 9.39 points or 0.42% to 2,235.94 were the only losers.

European markets got off to a cautious start; with France’s CAC declining by 7.52 points or 0.18% to 4,246.93; UK’s FTSE 100 losing 6.2 points or 0.09% to 6,773.11, however Germany’s DAX was trading higher by 88.95 points or 0.96% to 9,334.28