Firm trade prevails; Auto, Bankex lead

Indian equity markets continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters. Investors have started taking cautious approach ahead of release of crucial macro-economic data, i.e. September IIP data and October CPI data, which is scheduled to be released later in the day. Traders were seen piling positions in Auto, Bankex and FMCG sector while selling was witnessed in Power, Oil & Gas and Capital Goods sector stocks. In scrip specific development, Bayer CropScience was trading firm after the company’s net profit rose 51.15% to Rs 176.10 crore on 17.65% rise in total income to Rs 1268.70 crore in Q2 September 2014 over Q2 September 2013.

On the global front, the Asian markets were trading mostly in green while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,350 and 28,000 levels respectively. The market breadth on BSE was positive in the ratio of 1551:1346 while 111 scrips remained unchanged.

The BSE Sensex is currently trading at 28022.60, up by 112.54 points or 0.40% after trading in a range of 27958.64 and 28126.48. 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 0.78%, while Small cap index up by 0.49%.

The gaining sectoral indices on the BSE were Auto up by 1.29%, Bankex up by 1.14%, FMCG up by 0.51%, Infra up by 0.24%, Consumer Durables up by 0.20% while, Power down by 0.87%, Oil & Gas down by 0.38%, Capital Goods down by 0.32%, Metal down by 0.32%, PSU down by 0.20% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.46%, Axis Bank up by 2.28%, Tata Motors up by 1.94%, HDFC up by 1.87% and Hero MotoCorp up by 1.53%. On the flip side, NTPC down by 2.02%, Cipla down by 1.89%, Tata Steel down by 1.42%, Tata Power down by 1.29% and Larsen & Toubro down by 1.23% were the top losers.

Meanwhile, marking the first steps towards coal block re-allocation, an inter-ministerial panel in its meeting decided the methodology for fixing the reserve price for coal e-auction and now is planning to seek Cabinet approval for the same. Since the government would be auctioning 74 blocks in Phase I,  it is the coal ministry, which will now suggest the method of calculating the reserve and floor price of coal in the 74 cancelled coal blocks, which will go under the hammer through e-auction next month.

The price, which is expected to be announced within a fortnight, will be determined on the basis of the current value of the asset on offer, the international mine head price, and the three-year average of imported coal price. While a component for deriving the reserve price will be based on asset valuation, it will also factor in the gross calorific value (GCV) of coal for computing the net value to avoid any adverse impact on power tariffs.

The committee, comprising secretaries of ministries of finance, power, steel, law, mines, petroleum, industrial policy and promotion and coal, scheduled a meeting on Tuesday to 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 came 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.

Re-allocation 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 8385.80, up by 23.15 points or 0.28% after trading in a range of 8377.95 and 8415.05. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.37%, Axis Bank up by 2.32%, IDFC up by 2.23%, Tata Motors up by 2.10% and Ambuja Cement up by 1.97%. On the flip side, Power Grid Corporation down by 3.45%, NTPC down by 2.06%, Cipla down by 2.01%, Jindal Steel & Power down by 1.90% and Tata Steel down by 1.48% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 4.27 points or 0.22% to 1,967.27, Jakarta Composite increased 12.76 points or 0.25% to 5,045.05, Shanghai Composite increased 24.8 points or 1% to 2,494.48, Nikkei 225 increased 72.94 points or 0.43% to 17,197.05 and Hang Seng increased 129.9 points or 0.55% to 23,938.18.

On the other hand, Taiwan Weighted decreased 115.19 points or 1.28% to 8,918.95, Straits Times decreased 11.43 points or 0.35% to 3,280.72 and FTSE Bursa Malaysia KLCI decreased 5.71 points or 0.31% to 1,819.40.

The European markets were trading in red; Germany’s DAX decreased 62.87 points or 0.67% to 9,306.16, France’s CAC decreased 19.33 points or 0.46% to 4,224.77 and UK’s FTSE 100 decreased 16.12 points or 0.24% to 6,611.28.