Markets widen the losses; FMCG drag

Markets have slipped further into red in the early noon trade, though not much damage has been done but still both the major indices are down by around a quarter percent. Profit booking has emerged in selective counters lacking any major supportive cues that dragged the markets lower. Broader markets that have been resisting selling pressure since morning, too have given up and were trading marginally in red. The major cut was being witnessed in the defensive sector FMCG, while banking power and oil & gas too were trading in red. However, some support was coming from IT and tech stocks with dollar weakness after the Federal Reserve's latest meeting minutes showed policymakers were concerned about hiking interest rates too soon, although there was not much trend of the Indian rupee as the money markets remained closed on account of a local holiday. There was some cheer in the jewellery stocks as the Reserve Bank of India (RBI) permitted banks to resume lending against gold to jewellers. The RBI has also lifted the ban on imports of gold coins and medallions. PC Jewellers has surged by around 4%, Gitanjali Gems and Thangamayil Jewellery were up by around 3% and Titan was trading up by 1%.

The BSE Sensex is currently trading at 29260.10, down by 60.16 points or 0.21% after trading in a range of 29165.12 and 29469.86. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices too were trading in red; the BSE Mid cap index was down by 0.16%, while Small cap index was lower by 0.08%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.63%, Capital Goods up by 0.62%, IT up by 0.58%, TECK up by 0.33%, Metal up by 0.33% while, FMCG down by 1.29%, Bankex down by 1.10%, INFRA down by 0.80%, Power down by 0.73%, Oil & Gas down by 0.57% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.65%, HDFC up by 1.41%, Infosys up by 1.32%, Maruti Suzuki up by 0.88% and Mahindra & Mahindra up by 0.82%. On the flip side, ICICI Bank down by 1.90%, Tata Power down by 1.80%, ITC down by 1.73%, NTPC down by 1.54% and Bajaj Auto down by 1.39% were the top losers.

Meanwhile, the Oil Ministry has moved a proposal to pool or average out prices of domestic natural gas and imported LNG used by fertilizer plants, to make the cost of fuel uniform and affordable. The proposal moved for inter-ministerial consultations, before being put up to the Cabinet Committee on Economic Affairs (CCEA), calls for averaging of different rates of domestic and imported gas to ensure supply of fuel to all urea plants at a uniform delivery cost.

Fertilizer plants consume about 42.25 million standard cubic meters per day of gas for manufacture of subsidised urea. Out of this, 26.50 mmscmd comes from domestic fields and the rest 15.75 mmscmd is imported liquefied natural gas (LNG). The cost of gas varies from plant to plant owing to differential rates at which imported LNG is contracted as well as cost of transportation.

It has been reported that the ministry has proposed waiver of customs duty on import of LNG for fertilizer units and natural gas being covered under 'Declared Goods' thereby drawing levy of 4 per cent central sales tax and not differential rates of state sales tax or VAT. The ministry has proposed to make state-owned gas utility GAIL India as the pool operator. The Department of Fertilizer will determine the total requirement of natural gas and draw plant-wide requirement, which would then be informed to the pool operator, GAIL. The pool operator will tie-up imports after considering domestic availability and after averaging out price of both, delivery the fuel at uniform rate to all plants.

The ministry wants the pooling mechanism to be effective from April 1. Pooling of gas would help in focusing on improving plant efficiency and may help in price advantage in sourcing of LNG. The government is already considering a proposal to pool gas prices for power plants.

The CNX Nifty is currently trading at 8833.25, down by 35.85 points or 0.40% after trading in a range of 8809.60 and 8902.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.71%, Tata Steel up by 1.59%, Infosys up by 1.19%, HDFC up by 1.11% and Asian Paints up by 0.93%. On the flip side, Bank Of Baroda down by 3.22%, Tata Power down by 2.03%, ICICI Bank down by 2.03%, Cairn India down by 1.99% and Power Grid Corpn. down by 1.94% were the top losers.

The lone trading major Asian market Nikkei 225 surged by 65.62 points or 0.36% to 18,264.79.