Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session on heavy selling by funds and investors amid global sell-off on worries about Eurozone and sinking oil prices. Sentiment on the street weakened further as dominating sector of India's economy grew at a slower rate in December than in the previous month due to subdued new business orders, showed the widely-tracked HSBC purchasing managers' index (PMI). However, losses remained capped from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 472 crore on January 07, 2014. Back on street, All BSE sectoral indices were trading significantly in the red with metal, realty, oil & gas and IT indices posting steep losses. Among them, metal index fell the most 2.39 per cent, followed by realty 2.13 per cent, oil & gas 2.12 per cent and IT 1.87 per cent. In scrip specific development, shares of Jubilant Life Sciences soared on receiving ANDA approvals from the US Food and Drug Administration (USFDA) for Mycophenolate Mofetil and Rizatriptan. On the other hand, shares of Deepak Fertilisers declined on selling 2.2% stake in the Vijay Mallya-led fertilizer firm Mangalore Chemicals and Fertilisers (MCFL).

On global front, Asian stocks fell as sliding oil prices and political uncertainty in Greece forced investors out of risk assets and into the safety of government bonds. Overnight, US stocks fell with energy shares leading the decline as global economic concerns were compounded by swooning oil prices. Back home, Indian rupee recovered by six paise to 63.35 against the US dollar in early trade amid sustained overseas capital inflows.

The market breadth on BSE was negative, out of 2250 stocks traded, 515 stocks advanced, while 1687 stocks declined on the BSE.

The BSE Sensex is currently trading at 27331.03, down by 511.29 points or 1.84% after trading in a range of 27230.17 and 27698.93. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.45%, while Small cap index down by 1.65%.

The losing sectoral indices on the BSE were Metal down by 2.39%, Realty down by 2.13%, Oil & Gas down by 2.12%, IT down by 1.87% and Capital Goods down by 1.86%, while there were no gainers on the BSE sectoral index.

The only gainer on the Sensex was Hindustan Unilever up by 0.36%. On the flip side, ONGC down by 3.37%, Tata Steel down by 3.16%, Tata Motors down by 3.15%, Sesa Sterlite down by 2.82% and Hindalco down by 2.74% were the top losers.

Meanwhile, After approving key reforms for coal and insurance sectors recently through ordinance route, the cabinet has opted the same route and approved promulgating an ordinance to auction iron ore and other mineral mines. The ordinance would pave the way for introduction of competitive bidding for allocation of iron ore and other non-coal mines and will also enable creating District Mineral Funds for the welfare of the project-affected people. Further, the ordinance would also enable greater decentralisation of power to states for allocation of resources and also focuses on attracting private investments and latest technology and eliminating delays in administration.

The Bill will also empower the government to prescribe different terms and conditions for auctions for different types of minerals and their application to different states. It also proposed higher prison term and hefty penalty of Rs 5 lakh, 20 times higher than the fine prescribed in the existing ACT for violating terms of mineral excavations.

The move to take the ordinance came as Mines Ministry could not table a Bill in the Winter session of Parliament to amend the Mines and Minerals (Development and Regulation) Act, 1957. However, the government wants to allocate mines as mining sector is one of the chosen segments for the ‘Make in India’ programme.

However, Industry body Federation of Indian Mineral Industries (FIMI) has been opposing the auction route, underscoring that auction route cannot pursued in any resource-rich country as it may result in cartelization and monopolistic practices. It may also lead to selective mining while leaving low grade minerals in the ground, wastage of resources and inflate the cost of final product making it uncompetitive vis-a-vis imports.

The CNX Nifty is currently trading at 8232.35, down by 146.05 points or 1.74% after trading in a range of 8197.30 and 8327.85. There were 2 stocks advancing against 48 stocks declining on the index.

The only gainers on Nifty were Hindustan Unilever up by 0.44% and Asian Paints up by 0.21%. On the flip side, ONGC down by 3.28%, NMDC down by 3.21%, Tata Steel down by 3.14%, Jindal Steel & Power down by 2.98% and Tata Motors down by 2.91% were the top losers.

Asian markets were trading in the red; Nikkei 225 tumbled 2.63%, Hang Seng declined 1.47%, Taiwan Weighted 2.23%, Straits Times shed 1.51%, Jakarta Composite slipped 0.72%, KOSPI Index dropped 1.73%, Shanghai Composite dipped 1.04% and FTSE Bursa Malaysia KLCI was down by 1.52%.