Markets continue to trade in negative territory amid weak global cues

Indian bourses continued to trade in red in the afternoon session as selling momentum in the equities persisted, however the losses were capped and marginal recovery from day's low levels was seen as buying appeared in IT, teck and metals stocks. However, sharp selling witnessed in realty, auto and capital goods stocks amid weak global cues restrained the major indices in red. Sentiments got a hit as Indian industrial production slowed down to five-month low at 0.4% in the month of August mainly due to the contraction in manufacturing output. There was also some cautiousness among the investors ahead of quarterly earnings of bluechip company RIL and Consumer Price Index (CPI) data to be announced later in the day. Selling was broad based as both mid cap and small cap indices were trading down by around 0.20%.

Shares of M&M were down around 3% at Rs 1,276 as plans to stop tractor production for a period of four days raised concerns over high inventory levels because of weakening demand. On the other hand, the shares of Future Retail and Future Lifestyle Fashions were up over 3% after the Future Group announced a strategic tie-up with Amazon India.

On global front, most of the Asian markets were trading in red with Hang Seng down 0.58% and Jakarta Composite down 0.65% as concerns over the growth of major economies weighed on global investors’ sentiments. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,850 and 26,500 levels respectively. The market breadth on BSE was negative, out of 2,530 stocks traded, 1,026 stocks advanced, while 1,401 stocks declined on the BSE.

The BSE Sensex is currently trading at 26167.39, down by 129.99 points or 0.49% after trading in a range of 26092.69 and 26276.57. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.22%, while Small cap index down by 0.35%.

The gaining sectoral indices on the BSE were IT up by 0.93%, TECK up by 0.62%, Metal up by 0.48%. On the other hand, Realty down by 2.22%, Auto down by 0.95%, Capital Goods down by 0.91%, FMCG down by 0.88% and Oil & Gas down by 0.86% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.51%, Infosys up by 1.48%, Coal India up by 1.29%, TCS up by 1.15% and Tata Steel up by 0.51%. On the flip side, Mahindra & Mahindra down by 3.26%, Cipla down by 2.01%, BHEL down by 1.65%, Wipro down by 1.63% and Bharti Airtel down by 1.61% were the top losers.

Meanwhile, the Prime Minister's Office (PMO) has asked the Coal Ministry to formulate a plan of action to deal with the present situation, arising out of the Supreme Court's cancelling the allocation of 214 coal blocks. The PMO has suggested the ministry to hold a consultation with infrastructure ministries so that end-use plants are not stranded in the absence of fuel.

In a big setback to corporate sector, the Supreme Court had last month quashed allocation of 214 out of 218 coal blocks allotted to various companies since 1993. Attributing these block allocations as unfair distribution of the national wealth, the apex court stated that common good and public interest have suffered heavily due to these allocations as there was no fair and transparent procedure. Among 218 allocated blocks, 105 blocks allocated to private companies, 99 were to state-owned firms, 12 went to ultra mega power projects (UMPP) and 2 to coal-to-liquid projects. However, four coal blocks including one each to SAIL and NTPC and two blocks to Sasan Power owned by Anil Ambani's Reliance Power were declared as legal.

The private companies have invested Rs 2.87 lakh crores in illegal 157 coal blocks and Rs 4 lakh crores in end-use plants. The Supreme Court has highlighted that the beneficiaries of the illegal process must suffer the consequences and refused to show sympathy to private companies and gave them a six month duration to wind up their operations by March 31, 2015. The apex court also directed the allottees of coal blocks to pay within three months an additional levy of Rs 295 per metric tonne of coal extracted since allocation.

The CNX Nifty is currently trading at 7822.05, down by 37.90 points or 0.48% after trading in a range of 7796.00 and 7835.10. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 2.21%, Infosys up by 1.65%, Hero MotoCorp up by 1.56%, TCS up by 1.29% and Coal India up by 1.18%. On the flip side, DLF down by 5.01%, Mahindra & Mahindra down by 3.29%, Cipla down by 2.30%, BHEL down by 2.01% and ACC down by 1.84% were the top losers.

Most of the Asian markets were trading in red, Taiwan Weighted down 255.05 points or 2.84% to 8,711.39, Hang Seng down 134.65 points or 0.58% to 22,953.89, Jakarta Composite down 32.31 points or 0.65% to 4,930.65, Straits Times down 27.02 points or 0.84% to 3,196.85, Shanghai Composite down 17.8 points or 0.75% to 2,356.74, KOSPI Index down 13.71 points or 0.71% to 1,927.21, FTSE Bursa Malaysia KLCI down 5.17 points or 0.29% to 1,803.71