Benchmarks reverse gears; enters into positive territory

Reversing gears, Indian equity markets have now entered into positive territory in late morning deals on emergence of buying by funds and retail investors in select stocks ahead of Reserve Bank of India’s (RBI’s) bi-monthly monetary policy due on September 30, 2014. Sentiments got a boost after Standard & Poor's lifted India's rating outlook to 'stable' from 'negative', acknowledging efforts by the Narendra Modi government to maintain fiscal discipline while reviving the economy and drumming up investment, giving the prime minister a timely boost as his key US trip gets underway. Some support also came in from reports that Private equity investment in India is likely to touch a staggering $12 billion in 2014 primarily on account of reform measures taken by the government at the Centre. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1133.64 crore on September 26, 2014.

Among the BSE sectoral indices, good buying was observed in Consumer Durables, information technology (IT) and Realty sectors, while selling pressure was seen in Metal, Bankex and PSU sectors. In scrip specific development, shares of National Aluminium Company have jumped after the company has announced its plan to set up a 100 Mw wind power project with an investment of Rs 660 crore. Besides, National Hydroelectric Power Corporation (NHPC) rose after S&P revised the outlook on the company's corporate credit rating from BBB-/negative to BBB-/stable.
 
On global front, Asian stock markets were trading mixed as pro-democracy protests in Hong Kong and concern about China's economy offset good U.S. economic news. Back home, the rupee depreciated by 25 paise to 61.40 against the US dollar in early trade due to month-end demand for the US currency from importers amid a weak opening in the domestic equity market. The market breadth on BSE was positive, out of 2248 stocks traded, 1571 stocks advanced, while 614 stocks declined on the BSE.

The BSE Sensex is currently trading at 26648.81 up by 22.49 points or 0.08% after trading in a range of 26709.15 and 26539.69. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.76%, while Small cap index gained 1.58%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.10%, IT up by 1.34%, TECK up by 1.02%, Realty up by 0.38% and Power up by 0.05%, while Metal down by 0.80%, Bankex down by 0.65%, PSU down by 0.52%, FMCG down by 0.26% and Auto down by 0.25% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.64%, TCS up by 2.32%, BHEL up by 1.53%, Cipla up by 1.19% and Dr. Reddys Lab up by 1.19%. On the flip side, Hindalco down by 1.72%, Bharti Airtel down by 1.14%, Tata Power down by 1.13%, ICICI Bank down by 1.09% and Axis Bank down by 1.00% were the top losers.

Meanwhile, the precarious coal shortage situation in the country has led the Coal Ministry to ask the Power Ministry to review the fuel import plan for this fiscal as the target set is not commensurate with the plants' capacity addition envisaged for FY 2015.

The thermal power stations in the country are left with less than a week's coal stock and in order to avoid a possible coal shortage. Coal Ministry in a letter has stated that the shortfall in the import plant of CEA (Central Electricity Authority) has a bearing on the present crisis of coal stock at power stations, hence it would be desirable for MOP (Ministry of Power) to review the entire import plan of CEA to take contingency decision, if any, to avert shortfalls in coal stocks with the power plants.

The Coal Ministry had in July last year issued the Presidential Directive to CIL for signing fuel supply Agreements (FSAs) for a total capacity of 78,000 MW. The supply of domestic coal to the power projects were restricted to 65 percent, 65 percent, 67 percent and 75 percent during the remaining four years of Current Plan Period. Coal fired thermal plants account for over two-thirds of the country's power generation capacity and the shortage of coal has increased the dependence on imports.

Not only the coal shortage, the power producers are struggling with the quality of coal supplied to the power plants. Imported coal has to be mixed with domestic coal to fire the plants as the poor quality of Indian coal tends to damage the plants.

The CNX Nifty is currently trading at 7,973.35 up by 4.50 points or 0.06% after trading in a range of 7,987.60 and 7,937.80. There were 15 stocks advancing against 35 declining on the index.

The top gainers on Nifty were Sun Pharma up by 3.69%, TCS up by 2.38%, Lupin up by 1.44%, BHEL up by 1.41% and Dr. Reddys Lab up by 1.32%. On the flip side, PNB down by 1.82%, Hindalco down by 1.78%, Jindal Steel & Power down by 1.77%, Kotak Mahindra Bank down by 1.71% and Cairn India down by 1.48% were the top losers.

Asian markets were trading mixed; Nikkei 225 spurted by 0.30%, Jakarta Composite up by 0.06%, Shanghai Composite increased 0.42% and FTSE Bursa Malaysia KLCI was up by 0.13%. On the flip side, Hang Seng slipped by 1.94%, KOSPI Index declined by 0.24%, Straits Times dipped 0.06% and Taiwan Weighted was down by 0.26%.