Benchmarks paring early gains trade flat in afternoon session

Indian equity benchmarks pared all early gains and were trading flat in afternoon session dragged down by selling in front line blue chip stocks such as Tata Motors, HUL and ONGC among others. Weak Asian cues also dampened the sentiments and most of the sectoral indices were trading in red with reality as the top losing index. Broader indices too witnessed selling and both mid cap and small cap indices were trading down by over 0.10%. However, market losses remained capped as investors were seen piling up positions in capital good, banking and power stocks. Investors’ sentiment remained upbeat amid hopes that the government would announce more reforms in coming future. Sector specific, shares of defence companies have rallied by up to 7% after the government cleared defence projects worth Rs 80,000 crore.

Shares of HMT has surged around 13% to Rs 34.55 on back of heavy volumes on reports that the government may rethink its decision to close the loss-making HMT Watches as demand for watches is picking up. Indusind Bank is trading higher by around 3% to Rs 703 on reports that the Foreign Investment Promotion Board (FIPB) has allowed the bank to raise foreign institutional investors (FII) limit to 74%.

On global front, most of the Asian markets were trading in red with Hang Seng down 0.74% and Jakarta Composite down 0.65%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,000 and 26,500 levels respectively. The market breadth on BSE was negative, out of 2,432 stocks traded, 1,118 stocks advanced, while 1,218 stocks declined on the BSE.

The BSE Sensex is currently trading at 26837.45, down by 13.60 points or 0.05% after trading in a range of 26827.08 and 26994.96. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.36%, while Small cap index down by 0.11%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.72%, Bankex up by 0.61%, Power up by 0.19% and PSU up by 0.15%. On the other hand, Realty down by 3.47%, Oil & Gas down by 0.90%, Auto down by 0.68%, TECK down by 0.58% and FMCG down by 0.57% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.27%, Dr. Reddys Lab up by 2.10%, GAIL India up by 1.16%, HDFC up by 0.98% and Sesa Sterlite up by 0.90%. On the flip side, Tata Motors down by 2.22%, Hindustan Unilever down by 1.24%, ONGC down by 1.15%, Wipro down by 1.15% and Reliance Industries down by 0.82% were the top losers.

Meanwhile, With an aim to enhance country’s oil and gas production and increase investments in the sector, Oil Ministry is planning to overhaul the exploration policy. Ministry is also planning to set stiff targets for state explorers like ONGC to reverse the declining trend in oil and gas output in recent years.

Oil Minister Dharmendra Pradhan has asserted that oil ministry will replace the 15-year old production sharing regime, which has produced more controversies and less oil and gas. Among 252 allocated blocks, only 3 have come to production stage. Oil Minister added that new exploration regime to encourage investors’ confidence to invest more in oil and gas exploration and production and require minimal government intervention. ONGC and Oil India have been given a 10 percent improvement target and top most on priority is monetisation of small and marginal fields lying with ONGC with help of private investment as well as technology.

Dharmendra Pradhan further added that natural gas pipeline network in the country will be doubled to 30,000 kilometres by 2019 to expand the reach of environment-friendly fuel. Also, state refineries are being asked to improve efficiencies to become globally competitive even as fuel retailing is opened up for competition.

At present, India spends around $145 billion annually to import crude oil mainly from Iran, Saudi Arabia and Iraq. India currently is the fourth largest oil consumer in the world behind the US, China and Japan, and imports around 80 percent of its oil needs. It is estimated that India will become the world's largest oil importer by 2020. So far, the country had not invested much in intensive exploration and exploitation of untapped oil and gas reserves in the country. Presently, only around 0.93 million sq km area in India is held under exploration and production as compared to total estimated sedimentary area of 3.14 million square kilometres.

The CNX Nifty is currently trading at 8010.10, down by 4.45 points or 0.06% after trading in a range of 8009.95 and 8064.40. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.43%, Indusind Bank up by 2.45%, Dr. Reddys Lab up by 2.17%, Kotak Mahindra Bank up by 1.73% and Bank Of Baroda up by 1.44%. On the flip side, DLF down by 8.00%, Jindal Steel & Power down by 7.51%, Cairn India down by 2.96%, Zee Entertainment down by 2.31% and Tata Motors down by 2.13% were the top losers.

Asian markets were trading in green, FTSE Bursa Malaysia KLCI up by 4.97 points or 0.27% to 1,823.83, KOSPI Index up by 6.28 points or 0.33% to 1,931.97 and Nikkei 225 up by 85.48 points or 0.56% to 15,377.12. While, Hang Seng down 173.08 points or 0.74% to 23,129.12, Jakarta Composite down 32.95 points or 0.65% to 5,040.12, Taiwan Weighted down 18.23 points or 0.21% to 8,627.78, Shanghai Composite down 10.25 points or 0.45% to 2,292.03 and Straits Times down 0.76 points or 0.02% to 3,221.79