Markets pare early losses in afternoon session; Trades still continue in red

Indian bourses continued to trade in red in the afternoon session as selling momentum in the equities persisted, however the losses were capped and marginal recovery from day's low levels was seen as buying appeared in metal, consumer durables and infra stocks. Profit-booking by funds and retail investors after recent gains and lack of directional cues from the global market, which are mostly closed today influenced the sentiments and restricted the domestic markets in the negative territory. Macro-economic announcement that India’s fiscal deficit widened to 99% at Rs 5.25 lakh crore during April-November this fiscal as against Rs 5.31 lakh crore Budget Estimates for 2014-15 also dampened the sentiments. Though most of the major indices were trading in green and metal was the top gaining index up by around 0.72%. Broader indices outperformed the major indices as both mid cap and small cap indices were trading up by over 0.50%.

Kalpataru Power Transmission has gained over 5% to Rs 227.15 on receiving new orders worth Rs 560 crore. Further, Essar Oil has gained over 2% to Rs 108.85 after commissioning second Hydrogen Manufacturing Unit (HMU) at company's refinery.

On global front, all the major Asian markets remained closed on account of New Year’s Holiday.  Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,250 and 27,400 levels respectively. The market breadth on BSE was positive, out of 2,388 stocks traded, 1,493 stocks advanced, while 798 stocks declined on the BSE.

The BSE Sensex is currently trading at 27475.63, down by 23.79 points or 0.09% after trading in a range of 27395.34 and 27493.37. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index up by 1.01%.

The gaining sectoral indices on the BSE were Metal up by 0.72%, Consumer Durables up by 0.68%, INFRA up by 0.57%, Capital Goods up by 0.47% and PSU up by 0.34%. On the flip side, FMCG down by 0.14%, Bankex down by 0.08%, and Oil & Gas down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 1.77%, Bharti Airtel up by 1.32%, BHEL up by 1.17%, Cipla up by 0.83% and Tata Steel up by 0.83%. On the flip side, HDFC down by 0.91%, Dr. Reddys Lab down by 0.82%, Coal India down by 0.82%, GAIL India down by 0.66% and NTPC down by 0.66% were the top losers.

Meanwhile, amid rising concerns over the declining coal supplies, Coal Ministry has notified that it is working in tandem with the Railway Ministry for expeditious laying of three critical rail lines in three states include Jharkhand, Odisha and Chhattisgarh to transport the dry fuel. The country is witnessing with short supply of dry fuel with as many as 41 thermal power plants facing significant coal shortages and state run miner Coal India has been asked to ramp up production and supply of coal.

The Ministry further notified that the focus of the ministry to increase coal production to the maximum extent possible by facilitating environment and forest clearances expeditiously and pursuing with state government for assistance in land acquisition.  On the issue of poor quality coal supply to power plants, Coal Ministry stressed that to resolve the disputes regarding quality of coal, it has agreed to provide an option to test at third party laboratories with test data being collected at unloading points. Moreover, in order to clamp down coal pilferage, it has proposed to establish a national coal dispatching centre and Radio-frequency identification (RFID) tag for all coal movements.

India, despite being world's fifth largest in terms of reserves and the third-largest producer of coal, has failed to keep pace with increasing domestic demand. At present, Indian coal demand is around 35 percent higher than domestic supply. Coal shortage in the country has become a concern for Indian power sector as coal-fired plants account for 59% of India's installed electricity capacity. Presently, the Coal India (CIL) is the only producer of domestic coal accounting for around 80% of the domestic production. Amid rising domestic demand, annual target of the coal production for Coal India has been increased to 630.25 million tonnes for the current fiscal. Further, the government had also set a target of one billion tonnes of coal production for CIL by 2019 from the current levels of 500 million tones.

The CNX Nifty is currently trading at 8277.20, down by 5.50 points or 0.07% after trading in a range of 8248.75 and 8278.80. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 1.94%, Sesa Sterlite up by 1.68%, Bharti Airtel up by 1.35%, BHEL up by 1.34% and NMDC up by 1.14%. On the flip side, HDFC down by 0.94%, Dr. Reddys Lab down by 0.87%, Coal India down by 0.81%, Zee Entertainment down by 0.79% and NTPC down by 0.73% were the top losers.All the major Asian markets remained closed on account of New Year’s Holiday.