Benchmarks trim losses; trade continues in green

Indian equity markets trimmed losses and started trading in green in the late afternoon session on account of buying in frontline blue chip counters. Investors have started taking cautious approach ahead of October CPI data which is weighing on the sentiment; however there is a bit of hope that lower rate of inflation would allow RBI to unveil rate cuts sooner.  Traders were seen piling positions in Oil & Gas, Auto and Capital Goods sector while selling was witnessed in Consumer Durables, FMCG and IT sector stocks. Hectic buying activity was witnessed in shares of Non-Banking Financial Companies (NBFC) after the central bank announced a revised regulatory framework for non-banking financial companies yesterday. In scrip specific development, Hindustan Construction Company (HCC) was trading firm after its realty arm Lavasa Corporation has received market regulator SEBI’s approval for raising Rs 750 crore through an initial public offer (IPO).

On the global front, the Asian markets were trading on a mixed note while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,300 and 27,800 levels respectively. The market breadth on BSE was positive in the ratio of 1450:1416 while 104 scrips remained unchanged.

The BSE Sensex is currently trading at 27890.54, up by 15.81 points or 0.06% after trading in a range of 27790.40 and 27996.92. There were 14 stocks advancing against 16 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 0.21%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.76%, Auto up by 0.57%, Capital Goods up by 0.56%, Realty up by 0.35%, Bankex up by 0.32% while, Consumer Durables down by 0.78%, FMCG down by 0.62%, IT down by 0.38%, TECK down by 0.31%, Power down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.30%, GAIL India up by 1.64%, Reliance Industries up by 1.51%, Tata Steel up by 1.32% and Axis Bank up by 1.09%. On the flip side, BHEL down by 2.53%, ITC down by 1.69%, Infosys down by 1.12%, Bharti Airtel down by 0.97% and Cipla down by 0.79% 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 8346.50, up by 2.25 points or 0.03% after trading in a range of 8321.85 and 8378.70. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.28%, IDFC up by 2.22%, Mahindra & Mahindra up by 2.17%, GAIL India up by 1.69% and PNB up by 1.67%. On the flip side, BHEL down by 2.73%, ITC down by 1.83%, NMDC down by 1.63%, Cairn India down by 1.55% and Bharti Airtel down by 1.29% were the top losers.

The Asian markets were trading on a mixed note; KOSPI Index increased 4.77 points or 0.24% to 1,963.00, Hang Seng increased 63.58 points or 0.27% to 23,808.28, Jakarta Composite increased 74.06 points or 1.49% to 5,039.45 and Nikkei 225 increased 343.58 points or 2.05% to 17,124.11.

On the other hand, Taiwan Weighted decreased 15.84 points or 0.18% to 9,034.14, Straits Times decreased 10.2 points or 0.31% to 3,290.80, Shanghai Composite decreased 4 points or 0.16% to 2,469.67 and FTSE Bursa Malaysia KLCI decreased 3.51 points or 0.19% to 1,824.42.

The European markets were trading in green; UK’s FTSE 100 increased 10.89 points or 0.16% to 6,622.14, France’s CAC increased 16.74 points or 0.4% to 4,239.56 and Germany’s DAX increased 41.36 points or 0.44% to 9,393.23.