Benchmarks extend losses; Power, Metal drag

Indian equity markets extend losses and continue to trade weak in the late afternoon session on account of selling in frontline blue chip counters and taking cues from regional counterparts. On the macro-front, India’s Current Account Deficit (CAD) for the second quarter of the current financial year widened to $10.1 billion against $5.2 billion on Y-o-Y basis, which translated into 2.1% of GDP against 1.2% in the same quarter the previous year, added to some selling pressure. Global credit rating agency Fitch, in its latest Global Economic Outlook, highlighted that India will be the only BRIC country where growth picks up in 2014 to 5.6% and further accelerates to 6.5 % in 2015 and 6.8 % in 2016, failed to add optimism on the street. Traders were seen selling in Power, Metal and PSU sector stocks. In scrip specific development, Jet Airways (India), India’s second largest airline by passengers carried, and SpiceJet were trading in green on hopes that fall in international crude oil prices may improve the margins of these companies.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,400 and 27,900 levels respectively. The market breadth on BSE was negative in the ratio of 858:1904 while 104 scrips remained unchanged.

The BSE Sensex is currently trading at 27877.29, down by 242.11 points or 0.86% after trading in a range of 27862.11 and 28157.53. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.35%, while Small cap index down by 1.40%.

The losing sectoral indices on the BSE were Power down by 2.49%, Metal down by 2.39%, PSU down by 2.05%, Infra down by 2.02%, Consumer Durables down by 1.73%.

The top gainers on the Sensex were Sun Pharma up by 1.60%, Dr. Reddy’s Lab up by 0.93%, HDFC up by 0.46%, TCS up by 0.34% and HDFC Bank up by 0.26%. On the flip side, Sesa Sterlite down by 4.38%, ONGC down by 3.99%, Tata Power down by 3.81%, NTPC down by 3.68% and Hindalco down by 3.36% were the top losers.

Meanwhile, Coal Ministry has proposed a minimum floor price of Rs 150 per tonne for auctioning coal mines to steel, cement as well as captive power plants and a reserve price of Rs 100 a tonne for mines to be allotted to government companies and power stations through the reverse auction method.

According to proposal, the final floor and reserve price will be different for each block depending on the grade of the coal, using Coal India’s notified price for various types of the fuel. The floor price of the blocks would be worked out by computing their net present value (NPV) through the discounted cash flow method. Winners from steel, sponge iron and captive power plant industries would have to pay 10% of the floor price upfront. The ministry also suggested a cap on the auction price for the blocks being auctioned to the power sector where capacity has been set up under tariff-based bidding and with a cost-plus power purchase agreement.

The government is set to auction coal blocks, including operational and several others close to production, after the Supreme Court in September cancelled all mine allotments since 1993. The government will offer around 92 blocks during the first round of auction of which 59 have been reserved for the power sector. Of these 59, 25 blocks will be put out on auction and 34 will be allocated to Central and State public sector firms.

The CNX Nifty is currently trading at 8373.40, down by 64.85 points or 0.77% after trading in a range of 8356.65 and 8444.50. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.80% and Mahindra & Mahindra up by 0.82% and Dr. Reddy’s Lab up by 0.80% and HDFC up by 0.70% and HDFC Bank up by 0.49%. On the flip side, Sesa Sterlite down by 4.23%, ONGC down by 3.88%, Tata Power down by 3.65%, NTPC down by 3.50% and Hindalco down by 3.17% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 561.84 points or 2.34% to 23,485.83, Shanghai Composite decreased 163.99 points or 5.43% to 2,856.27, Nikkei 225 decreased 122.26 points or 0.68% to 17,813.38, Taiwan Weighted decreased 58.39 points or 0.64% to 9,128.90, Jakarta Composite decreased 11.33 points or 0.22% to 5,132.68 , KOSPI Index decreased 8 points or 0.4% to 1,970.95 and FTSE Bursa Malaysia KLCI decreased 4.32 points or 0.25% to 1,736.52.

On the other hand, Straits Times increased 13.79 points or 0.42% to 3,311.63.

The European markets were trading in red; Germany’s DAX decreased 106.27 points or 1.06% to 9,908.72, France’s CAC decreased 46.13 points or 1.05% to 4,329.35 and UK’s FTSE 100 decreased 65.17 points or 0.98% to 6,606.98.