Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors indulged in booking profits at prevailing levels. Besides, a weakening trend at other Asian markets following overnight losses in US markets, triggered by concerns over a strengthening dollar and falling oil prices, had a negative impact on domestic market. However, losses remained capped on report that foreign institutional investors (FIIs) bought shares worth a net Rs 1,723 crore on January 28, 2015. Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of futures and options expiry due later in the day.

On the global front, most of the Asian indices were broadly lower on Thursday, as a rout in energy stocks and a slew of disappointing corporate earnings weigh on regional markets. Furthermore, Overnight, US stocks declined as the energy sector expanded losses after U.S. crude settled down $1.78 at $44.45, its lowest since March 2009.  Back home, Indian Rupee fell by seven paise to 61.48 against the dollar in early trade due to appreciation of the Greenback against other currencies overseas.

Back on street, stocks from Realty, Oil & Gas and Capital Goods counters were supporting the markets’ uptrend, while those from Metal, TECK and PSU counters were adding to the underlying cautious undertone. In scrip specific development, shares of HDFC Bank surged after the Cabinet Committee on Economic Affairs (CCEA) approved HDFC Bank’s proposal to raise up to Rs 10,000 crore by selling shares to foreign investors. On the other hand, shares of Coal India have dipped after the government on Wednesday decided to sell up to 10% stake in the company through offer for sale (OFS).

The market breadth on BSE was positive, out of 2275 stocks traded, 1193 stocks advanced, while 991 stocks declined on the BSE.

The BSE Sensex is currently trading at 29455.22, down by 103.96 points or 0.35% after trading in a range of 29378.30 and 29526.33. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index up by 0.37%.

The gaining sectoral indices on the BSE were Realty up by 2.47%, Oil & Gas up by 1.27% and Capital Goods up by 0.32% while, Metal down by 0.91%, TECK down by 0.60%, PSU down by 0.58%, INFRA down by 0.39% and FMCG down by 0.30% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.46%, HDFC Bank up by 1.60%, Dr. Reddys Lab up by 1.19%, GAIL India up by 0.68% and Larsen & Toubro up by 0.61%. On the flip side, Coal India down by 3.88%, HDFC down by 2.43%, Bharti Airtel down by 2.37%, Sun Pharma down by 1.85% and ICICI Bank down by 1.67% were the top losers.

Meanwhile, in a bit of a disappointment for the sugar industry, the Food Ministry although in favour of extending export subsidy, will only do it to the extent of 1.4 million tonnes of raw sugar in the ongoing 2014-15 marketing year. Last year, the Centre had announced a subsidy for exports of raw sugar up to 4 million tonnes in order to help the cash-starved industry clear sugarcane arrears to farmers. However, the subsidy scheme ended in September 2014.

The sugar industry has been seeking extension of the export subsidy for this year as mills are facing liquidity crunch to make cane payment in the wake of depressed local prices due to higher production in the last few years. Sugar production in India, the world's second biggest producer after Brazil, has increased by 27.3 percent to 7.46 million tonnes in the first three months of the current 2014-15 season, according to the ISMA.

The industry is estimated to have incurred losses to the tune of Rs 3000 crore, resulting from imbalance between input costs and the output since cane prices continue to be regulated by government, while sugar prices continue to remain market determined. 

So far, the food ministry has reviewed the quantum of subsidy every two months. While, first fixed subsidy at Rs 3,300 per tonne for February-March, it has been later reduced to Rs 2,277 for April-May. Nevertheless, the same has been reinstated at Rs 3,300 for June- July before hiking it to Rs 3,371 for August-September period of last marketing year. Sugar mills have exported about 750,000 tonnes of raw sugar in 2013-14 marketing year (October-September) with an incentive of about Rs 200 crore.

The CNX Nifty is currently trading at 8885.25, down by 29.05 points or 0.33% after trading in a range of 8861.25 and 8902.05. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.50%, BPCL up by 1.88%, DLF up by 1.69%, Dr. Reddys Lab up by 1.51% and HDFC Bank up by 1.48%. On the flip side, Coal India down by 3.70%, Bharti Airtel down by 2.48%, HDFC down by 2.35%, Sun Pharma down by 1.85% and Jindal Steel & Power down by 1.81% were the top losers.

Asian equity indices were trading mostly in the red; Hang Seng declined 1.14%, Nikkei 225 slipped 0.51%, Taiwan Weighted decreased 0.84%, Shanghai Composite dropped 1.20%, FTSE Bursa Malaysia KLCI shed 0.66%, Jakarta Composite dipped 0.19% and KOSPI Index was down by 0.26%. On the flip side, Straits Times was up by 0.16%.