Benchmarks continue to trade weak; RBI keeps key rates unchanged

Indian equity benchmarks continued to trade weak in afternoon session as the RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0 per cent. Consequently, the reverse repo rate remains unchanged at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0 per cent. Though most of the sectoral indices were trading in green, sharp selling witnessed in auto, teck and IT kept the major indices in the negative territory.  However, major indices recouped from their intraday low level as RBI Governor Raghuram Rajan said that a rate cut was likely early next year if the inflation momentum continue to follow downward path. Gains in capital goods, metal and PSU stocks also provided support to domestic benchmarks.

Sentiments also got some support as core sector output in the month of October rose to four-month high of 6.3 percent in October as compared to 1.9% in September. Sector wise, shares of airline companies such as Jet Airways and SpiceJet were down 4-7% amid profit taking at higher levels after recent gains post decline in global crude oil prices. In scrip specific movement, shares of Fulford (India) was locked in lower circuit of 20% at Rs 1,417 after Dashtag, its promoter, has dropped plans to de-list the company due to abnormal upward spurt in the share price of the company.

On global front, most of the Asian markets were trading mixed with Straits Times up by 0.75% and Shanghai Composite up by 1.8%.  Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,500 and 28,500 levels respectively. The market breadth on BSE was negative, out of 2,575 stocks traded, 1,078 stocks advanced, while 1,387 stocks declined on the BSE.

The BSE Sensex is currently trading at 28535.75, down by 23.87 points or 0.08% after trading in a range of 28386.46 and 28576.39. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.31%, while Small cap index up by 0.12%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.04%, Metal up by 0.60%, PSU up by 0.49%, INFRA up by 0.48% and Power up by 0.40%. On the flip side, IT down by 0.89%, Auto down by 0.65%, TECK down by 0.52% and Consumer Durables down by 0.28% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 1.59%, Larsen & Toubro up by 1.47%, Bharti Airtel up by 1.35%, NTPC up by 0.86% and SBI up by 0.83%. On the flip side, Infosys down by 2.09%, Bajaj Auto down by 1.25%, Mahindra & Mahindra down by 1.05%, HDFC down by 1.00% and Dr. Reddys Lab down by 0.95% were the top losers.

Meanwhile, As global oil rates hit a five-year low to around $67.53 a barrel, losses on sale of subsidised LPG and kerosene have dropped by 21 percent to Rs 148 crore. As per the government’s notification, state-owned fuel retailers are losing Rs 25.69 on sale of every litre of kerosene through the Public Distribution System (PDS) and Rs 279.91 per 14.2-kg on domestic cooking gas, lower than Rs 27.60 a litre loss oil firms were incurring on sale through PDS in November, and Rs 393.50 per LPG cylinder.

Further, oil marketing companies (OMCs), effective December 1, 2014, are now incurring combined daily under-recovery of about Rs 148 crore on the sale of PDS kerosene and domestic LPG as against Rs 188 crore daily under-recoveries during previous month. During the first half of current fiscal, under-recovery or the revenue loss incurred on selling fuel below cost was recorded at Rs 51,110 crore. Under recovery was Rs 139,869 crore for full year in the 2013-14.

The price of non-subsidised cooking gas (LPG) was further cut by a steep Rs 113 per cylinder on November 1 and jet fuel (ATF) by 4.1 percent amid falling international oil rates. A 14.2-kg cylinder of non-subsidised LPG will now cost Rs 752, down from Rs 865 previously, in Delhi. This is the fifth straight reduction in rates of non-subsidised or market priced LPG, which the customers buy after exhausting their quota of 12 cylinders at subsidised rates, since August.

The government had decontrolled petrol in June 2010, while, diesel was deregulated on October 18. Since deregulation, diesel rates have been cut thrice, leading to price coming down to around Rs 52.51 a litre. 

The CNX Nifty is currently trading at 8549.05, down by 6.85 points or 0.08% after trading in a range of 8504.65 and 8560.20. There were 30 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 3.39%, PNB up by 3.28%, Cairn India up by 2.22%, Bank Of Baroda up by 2.10% and Sesa Sterlite up by 1.61%. On the flip side, BPCL down by 3.03%, Asian Paints down by 2.51%, Infosys down by 2.08%, Bajaj Auto down by 1.23% and Dr. Reddys Lab down by 1.13% were the top losers.

Most of the Asian markets were trading in green, KOSPI Index up by 0.61 points or 0.03% to 1,965.83, Jakarta Composite up by 22.57 points or 0.44% to 5,186.86, Straits Times up by 24.68 points or 0.75% to 3,330.32, Shanghai Composite up by 48.16 points or 1.8% to 2,728.31, Nikkei 225 up by 80.17 points or 0.46% to 17,670.27 and Hang Seng up by 146.7 points or 0.63% to 23,514.15. While, Taiwan Weighted down 82.92 points or 0.91% to 9,034.79, FTSE Bursa Malaysia  and KLCI down 7.56 points or 0.43% to 1,770.71.