Benchmarks continue to trade in red in late morning session

In the extremely range-bound session of trade, Indian equity benchmarks continued to trade in red in the late morning session on absence of positive triggers which could take the markets higher and profit booking in frontline line blue-chip stocks. Besides, a weakening trend on the other Asian markets following overnight losses on the US bourses also influenced the sentiment. Most of major indices were trading in red and selling witnessed in front line blue chip stocks took the markets to lower levels.  However, the outperformance in broader markets continued with the BSE Midcap and Smallcap indices gaining 0.3 percent and 0.6 percent, respectively. Sentiment on the street weakened as the Supreme Court, after declaring all 218 coal block allocations since 1993 as illegal, has reserved its decision on their fate. Also in a meeting with Piyush Goyal, Minister of State (Independent Charge) for Power, Coal, and New & Renewable Energy, all the States assured the Centre that they would reduce technical and commercial losses in accordance with the agreed trajectory and those over-achieving will be incentivised. 

Most of the BSE sectoral indices were trading in red with Oil & Gas stocks among the top losers after report that the government may set the price of locally produced gas at $6 a unit. Besides, selling pressure was also seen FMCG, IT and banking counters. Shares of some metal company’s too fall after the Supreme Court on Tuesday reserved its order on coal block allocations. On the other hand, some buying was observed in Realty, Power and Healthcare counters. In scrip specific development, shares of Lanco Infratech rose on plans to sell 3,000 Mw of capacity to raise Rs 5,000 crore. Besides, BL Kashyap was locked in 20% upper circuit after HDFC Mutual Fund has bought 14.2 lakh shares of the company.

On global front, Asian shares tumbled due to concerns that China’s growth is slowing and speculation that US interest rates will rise sooner than estimated. Back home, Indian rupee weakened by 23 paise to 60.83 against the US currency in early trade due to dollar's gains against other currencies overseas. The market breadth on BSE was positive, out of 2391 stocks traded, 1441 stocks advanced, while 861 stocks declined on the BSE.

The BSE Sensex is currently trading at 27147.20 down by 118.12 points or 0.43% after trading in a range of 27251.44 and 27107.42. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index up by 0.60%.

The gaining sectoral indices on the BSE were Realty up by 0.65%, Power up by 0.52%, Healthcare up by 0.46%, Metal up by 0.25% and Infrastructure up by 0.02%, while FMCG down by 0.85%, Oil & Gas down by 0.64%, IT down by 0.54%, Bankex down by 0.45%, TECK down by 0.41% were the losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 2.26%, Sesa Sterlite up by 1.31%, Hindalco up by 0.99%, Bharti Airtel up by 0.97% and GAIL up by 0.93%. On the flip side, Infosys down by 1.65%, Mahindra & Mahindra down by 1.61%, Hero MotoCorp down by 1.16%, Reliance Industries down by 1.12% and SBI down by 1.07% were the top losers.

Meanwhile, just days after declaring all 218 coal block allocations since 1993 as ‘illegal’, the Supreme Court (SC) on Tuesday reserved its final order on whether the illegal coal block allocations should be axed, after the NDA government and coal block allottees took to different stands on cancellation of the allotments without referring them to a scrutiny committee.

While, the Coal block allottees, mostly from iron and steel industry and power sector, cried out that mass cancellation without giving them a hearing could have a catastrophic effect on the economy, Attorney general Mukul Rohatgi stuck to his earlier stand that the Centre was prepared for cancellation of all coal block allocations as a ‘logical corollary’ to these being declared illegal. However, Mukul Rohatgi requested the court if it could consider saving 46 of them, which have either started mining for end-use plants or were on the verge of doing so. Subsequently, Attorney general Mukul Rohatgi, unveiled that the government was formulating the process and guidelines for the auction in the event the court cancels the allocation.

However, a bench of Chief Justice R M Lodha and Justices Madan B Lokur and Kurian Joseph underscored that the government completely understood the economic impact, the consequences and the darkness that could follow by this decision, has its eyes wide open and could see every possible fallout. They further asserted that the government has full competence to take a position on this issue and feels that the impact is not going to be so much.

Nevertheless, allottees, led by senior advocates K K Venugopal, T R Andhyarujina, Harish Salve, Rajeev Dhavan, K V Vishwanathan, A M Singhvi and A K Ganguly, argued that principles of natural justice and demanded that a committee of retired SC judges assisted by experts should look into each case, hear the allottees and then decide upon the fate of coal block allottees.

The CNX Nifty is currently trading at 8,118.95 down by 34.00 points or 0.42% after trading in a range of 8,135.75 and 8,105.75. There were 19 stocks advancing against 31 declining on the index.

The top gainers on Nifty were Tata Power up by 2.09%, Sesa Sterlite up by 1.01%, Cipla up by 0.97%, DLF up by 0.95% and ICICI Bank up by 0.93%. On the flip side, Indusind Bank down by 1.71%, Infosys down by 1.69%, Mahindra & Mahindra down by 1.67%, Hero MotoCorp down by 1.36% and United Spirits down by 1.18% were the top losers.

Most of the Asian markets were trading in the red; FTSE Bursa Malaysia KLCI declined by 0.27%, Taiwan Weighted 0.96%, Straits Times contracted by 0.10%, Hang Seng decreased by 1.81%, Jakarta Composite dipped by 0.91% and Shanghai Composite was down by 0.89%. On the flip side, Nikkei 225 rose 0.12%,