Markets continue to trade weak after slipping into negative territory

After slipping into negative territory, markets continue to trade weak in absence of positive trigger, which could heave the markets higher. Besides, mixed regional counterparts, prevailing caution ahead of October CPI data was weighing on the sentiment; however bit of hopes that lower rate of inflation would allow RBI to unveil rate cuts sooner, limited further downtrend of bourses. At day’s low, both Sensex and Nifty were trading below psychologically crucial 27,850 and 8,350 levels respectively, with losses of around one tenth of a percent. Meanwhile, broader indices also depicting contradictory trend, were trading mixed at this point of time.

On the global front, Asian pacific shares giving away early gains were trading mixed this point of time. The shares edged higher in early deals after positive economic data from Japan, which showed that Japan’s current account surplus rose more than expected in September from a year earlier as income from investment overseas bolstered the balance of payments. The surplus stood at 963 billion yen against street expectation of a figure above 500 billion yen.

Closer home, most of the sectoral indices on BSE succumbed to selling pressure, nevertheless prominent losers were stocks from Information Technology, Consumer Durables and PSU counters. On the flip side, stocks from Auto, Infrastructure and banking space were the top gainers for the session. Meanwhile,  shares in non-banking finance companies gain after the RBI tightened rules for 'shadow banks', which were in line with expectation. RBI tightened the rules by raising capital adequacy requirement and net owned fund limit, among others. India’s Apex Bank also has restricted deposits with a set of changes that it hopes will protect consumers and the market without stifling growth. The overall market breadth on BSE was in the favour of declines which were outpacing advances in the ratio of 1048:935, while 24 shares remained unchanged.

The BSE Sensex is currently trading at 27843.79, down by 30.94 points or 0.11% after trading in a range of 27790.40 and 27996.92. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.12%, while Small cap index down by 0.11%.

The gaining sectoral indices on the BSE were Auto up by 0.42%, INFRA up by 0.12%, Bankex up by 0.07% and Capital Goods up by 0.04% while, IT down by 0.50%, Consumer Durables down by 0.45%, PSU down by 0.44%, Power down by 0.44% and TECK down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.40%, GAIL India up by 1.66%, Tata Steel up by 1.52%, Axis Bank up by 0.91% and Sun Pharma Inds. up by 0.90%. On the flip side, BHEL down by 3.23%, Infosys down by 1.23%, ITC down by 1.16%, Bharti Airtel down by 1.10% and ONGC down by 0.96% were the top losers.

Meanwhile, an inter-ministerial panel is likely to meet on Tuesday to discuss the methodology for fixing reserve price for auction of coal blocks. The committee, comprising secretaries of ministries of finance, power, steel, law, mines, petroleum, industrial policy and promotion and coal, in the meeting would deliberate upon the auction start price or the reserve price for allotting coal blocks, whose allocation was cancelled by the Supreme Court recently.

This development comes after Supreme Court (SC) on September 24 had cancelled allocation of 204 coal blocks to various companies between 1993 and 2009. Out of these, 37 were running coal mines and another five were ready to produce by April, 2015.

Auctions of these cancelled blocks were planned since there were many existing power plants, which were linked to these mines, or power plants, which have no tie-up for coal and would either have cost-plus power purchase agreements or would have contracted agreements to sell electricity on the basis of bid tariff. Nevertheless, the government sensed the need to revise the methodology decided by the IMC previously.

The government had in 2012 constituted an IMC to consider and examine the formulation of methodology for fixing floor/reserve price of coal blocks to be allocated through auction.

However, based on recommendations of consultant Crisil, it proposed allotting coal blocks only to government companies or to power plants with tariff-based bidding, to ensure that the benefit of cheaper domestic coal is passed on to consumers.
 
The CNX Nifty is currently trading at 8336.35, down by 7.90 points or 0.09% after trading in a range of 8321.85 and 8378.70. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.51%, Mahindra & Mahindra up by 2.36%, IDFC up by 1.69%, Tata Steel up by 1.58% and GAIL India up by 1.49%. On the flip side, BHEL down by 3.15%, NMDC down by 1.57%, Bharti Airtel down by 1.38%, ITC down by 1.32% and Jindal Steel & Power down by 1.32% were the top losers.

Asian markets were trading mixed; with KOSPI Index trading higher by 4.77 points or 0.24% to 1,963.00; Hang Seng advanced by 62.21 points or 0.26% to 23,806.91; Jakarta Composite surged by 66.7 points or 1.34% to 5,032.09 and Nikkei 225 rallied by 343.58 points or 2.05% to 17,124.11. On the flip side, Taiwan Weighted declined by 15.84 points or 0.18% to 9,034.14;  Shanghai Composite slid by 5.72 points or 0.23% to 2,467.95; Straits Times shed 3.4 points or 0.1% to 3,297.60 and FTSE Bursa Malaysia KLCI slid 3.22 points or 0.18% to 1,824.71