Markets pare some early gains; Sensex trades marginally in green

Indian bourses continued to trade in green in the afternoon session as buying momentum in the equities persisted, however marginal downfall from day's high levels was seen as selling appeared in metal, power and oil and gas stocks. Sentiments turned better as investors made fresh buying, tracking a mixed trend on other Asian markets ahead of the US Federal Reserve’s monetary policy meet. Further, gain in capital goods, banking and consumer durables stocks also provided support to domestic equity benchmarks. World’s bank statement that Indian economy has come back on growth track and is likely to grow by 5.6% in FY15 followed by further acceleration to 6.4% and 7.0% in FY16 and FY17 also added to optimistic sentiments. Broader indices too witnessed buying and both mid cap and small cap indices were trading in green territory.

Shares of Styrosolution ABS were up 4% at Rs 613 after Reliance Mutual Fund acquired over 100,000 shares of the company from the open market. Shares of construction and engineering company NCC has soared 12% to Rs 49.70 on back of heavy volumes on the bourses. Last week, NCC announced that the rights issue of equity shares aggregating to Rs 598.70 crore received very good response from the shareholders and has been oversubscribed.

On global front, Asian markets were trading mixed with Hang Seng up by 0.95% and Nikkei 225 down 0.39% as investors awaited the outcome of the US Federal Reserve's two-day meeting that begins later in the session for clues to the direction of US interest rates. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,900 and 26,500 levels respectively. The market breadth on BSE was positive, out of 2,432 stocks traded, 1,183 stocks advanced, while 1,136 stocks declined on the BSE.

The BSE Sensex is currently trading at 26781.04, up by 28.14 points or 0.11% after trading in a range of 26764.15 and 26865.11. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.01%, while Small cap index up by 0.35%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.43%, Bankex up by 0.42%, Consumer Durables up by 0.36%, Realty up by 0.18% and PSU up by 0.15%. On the other hand, Metal down by 0.70%, Power down by 0.65%, Oil & Gas down by 0.44%, FMCG down by 0.40% and INFRA down by 0.36% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.18%, ICICI Bank up by 1.72%, Sun Pharma Inds. up by 1.67%, SBI up by 1.42% and Cipla up by 1.17%. On the flip side, Bharti Airtel down by 2.00%, BHEL down by 1.75%, Hindustan Unilever down by 1.68%, Hero MotoCorp down by 1.60% and Reliance Industries down by 1.41% were the top losers.

Meanwhile, as the government is preparing for fresh auction of coal blocks cancelled by the Supreme Court, Industry Body Assocham has suggested the government to give preference in the auction to captive block allocatees whose end-use plants were operational at the time Supreme Court quashed allocations of mines.

Supreme Court had last month quashed allocation of 214 out of 218 coal blocks allotted to various companies since 1993, underscoring 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.

Assocham stated in a note submitted to the Prime Minister's Office (PMO) that coal blocks already allotted for end-use power projects should be auctioned only for power projects, while those for steel projects should be auctioned only for steel projects. Assocham is of the view that if coal block allocates to new bidder, it will lead to considerable delays in commencement of production from mines and adversely affect the end-use projects.

Industry body further noted that auctions should be opened for others only after coal for these projects is secured. Assocham further noted that reserve price and upfront payment should be based on actual mineable reserves and not on the basis of geological reserves. Bidding for end use power as well steel projects should be on the basis of upfront payment fixed by Ministry of Coal (MoC ) and extractable reserve linked payment quoted by the bidder in Rupee/tonne. Assocham also suggested that the auction process should accord the Right of First Refusal (RoFR) to the existing allocatees of the coal blocks who have end-use plants either operational or soon to be operational or to the allocatees that have taken substantial effective steps to set up end-use plants.

The CNX Nifty is currently trading at 7998.25, up by 6.55 points or 0.08% after trading in a range of 7995.05 and 8020.80. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.12%, Zee Entertainment up by 2.04%, Ultratech Cement up by 1.93%, Sun Pharma Inds. up by 1.88% and BPCL up by 1.65%. On the flip side, Jindal Steel & Power down by 2.49%, Bharti Airtel down by 2.36%, BHEL down by 2.06%, Lupin down by 1.79% and Hindustan Unilever down by 1.55% were the top losers.

Asian markets were trading mixed, Shanghai Composite up by 34.7 points or 1.52% to 2,325.14, Taiwan Weighted up by 145.77 points or 1.69% to 8,773.55, Hang Seng up by 219.42 points or 0.95% to 23,362.65. While, Nikkei 225 down 59.81 points or 0.39% to 15,328.91, Jakarta Composite down 20.84 points or 0.41% to 5,003.45, Straits Times down 10.48 points or 0.32% to 3,215.63, KOSPI Index down 6.29 points or 0.33% to 1,925.68, FTSE Bursa Malaysia KLCI down 1.8 points or 0.1% to 1,821.35.