Benchmarks surrender early gains; trade into negative territory with slender losses

Coming off from day’s high, local equity markets have succumbed to selling pressure and trading with slender losses of around one tenth of a percent, which dragged Sensex below psychologically crucial 26,550 level even as Nifty held above crucial 7850 level. However, broader indices showing resilience were trading with gains in the range of 0.25%-0.50%. Markets succumbed to profit-booking at higher levels, hurt by negative start of European shares.

Bourses washed away all the gains witnessed in early deals after  government promised to open up the coal industry to private players, raising hopes of more reforms. Nevertheless, absence of positive triggers later in the trade amidst negative global set-up, prompted market-participants to book their profits.

On the global front, Asian pacific shares were set for a red close despite slew of positive macro-economic data which was offset by concerns over stand-off between city officials and pro-democracy student demonstrators in Hong Kong. Meanwhile, Official data also showed that China's industrial output growth in September accelerated and rebounded from a near-six-year low in August, driven by the government's recent targeted easing measures, while China's gross domestic product rose 7.3% from a year earlier in the third quarter, down from 7.5% growth in the second quarter of this year. Thus, receiving a negative handover from Asian counterparts, European equities got off to a subdued start.

Closer home, losses of the bourses were led by stocks belonging from Oil & Gas counter, followed by Healthcare and Fast Moving Consumer Goods counters. On the flip side, stocks from Infrastructure, Power and Consumer Durables were the top gainers of the session. Meanwhile, rate sensitive stocks also were trading higher on rate cut hopes. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1312:1167; while 1167 shares remained unchanged.

The BSE Sensex is currently trading at 26415.00, down by 14.85 points or 0.06% after trading in a range of 26415.00 and 26615.41. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index up by 0.26%.

The gaining sectoral indices on the BSE were INFRA up by 1.86%, Power up by 1.32%, Consumer Durables up by 1.27%, Metal up by 1.26% and Realty up by 0.85% while, Oil & Gas down by 0.89%, FMCG down by 0.35%, IT down by 0.13%, PSU down by 0.07% and Auto down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 4.24%, Sesa Sterlite up by 3.93%, BHEL up by 3.10%, Wipro up by 2.27% and Bharti Airtel up by 2.17%. On the flip side, ONGC down by 2.47%, Mahindra & Mahindra down by 1.73%, Coal India down by 1.54%, Dr. Reddys Lab down by 1.08% and ITC down by 0.97% were the top losers.

Meanwhile, Just few days after gas price hike, Finance Minister, Arun jaitley underscored that a price of $5.61 per MmBtu would ensure that explorers make gain, but not windfall profits. He asserted that rate hike, approved the Cabinet Committee on Economic Affairs (CCEA), balances interests of oil and gas explorers and consumers as this while fetching some profits to explorers would also be minimizing the burden of consumers.

Modifying the Rangarajan formula on gas pricing, the centre hiked the natural gas price to $5.61 per mmBtu from the existing $4.2/mmBtu rate, which was way lower than the demanded price hike of $8.4/ MmBtu, approved by the previous UPA government.

Justifying government’s stand on this issue, Jaitley added that he was not against business and did not consider words like ‘profits’ as wrongful, however emphasized that he did not favour ‘windfall profits’. Further, he unveiled that gas price decision was taken professionally as a committee of secretaries discounting irrelevant factors in the Rangarajan formula, approved by the previous UPA government, took into consideration only the relevant ones.  Lastly, he added that gas price has been revised biannually and rather has a realistic approach.

The CNX Nifty is currently trading at 7875.30, down by 4.10 points or 0.05% after trading in a range of 7875.15 and 7934.50. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 5.39%, GAIL India up by 4.47%, Sesa Sterlite up by 3.87%, BHEL up by 3.29% and Wipro up by 2.23%. On the flip side, PNB down by 3.76%, ONGC down by 2.46%, Mahindra & Mahindra down by 1.96%, Lupin down by 1.93% and BPCL down by 1.69% were the top losers.

Asian markets were trading mostly in red; with Nikkei 225 trading down by 306.95 points or 2.03% to 14,804.28; Hang Seng trading down by 80.73 points or 0.35% to 22,989.53; Shanghai Composite trading down by 17.42 points or 0.74% to 2,339.31; Jakarta Composite trading down by 15.6 points or 0.31% to 5,024.93; KOSPI Index trading down by 14.78 points or 0.77% to 1,915.28; Taiwan Weighted trading down by 8.5 points or 0.1% to 8,654.64; FTSE Bursa Malaysia KLCI trading down by 6.08 points or 0.34% to 1,797.06. On the flip side, Straits Times up by 8.02 points or 0.25% to 3,189.07 was the sole gainer amongst Asian pack.

European markets were trading mostly lower; with Germany’s DAX trading lower by 27.09 points or 0.31% to 8,690.67; UK’s FTSE 100 slipping by 26.46 points or 0.42% to 6,240.61 and France’s CAC sliding by 5.69 points or 0.14% to 3,985.55.