Markets pare gains, manages to hold in green

Indian markets though pared their gains but have recovered from their day’s low in early noon session. Trade has turned cautious with traders remaining on sidelines ahead some major events scheduled later in the week, also on the global front the Federal Reserve Chair Janet Yellen's testimony before the House and Senate is being closely watched by the global markets, keeping the undertone cautious for the local market.  On the domestic front traders were concerned eyeing the developments in Parliament with the ruckus erupted on the second day of budget session, as Opposition parties upped the ante against the government over land bill. The government is going to introduce the land acquisition amendment bill 2015 to replace the ordinance in Lok Sabha. The Opposition has remained firm that the ordinance, along with five more, would not be allowed to go through Parliament. Back on street selling in banking, oil & gas and metal stocks was weighing on the sentiments. Banking stocks were negatively reacting to the decision to increase the wages of their employees by 15 per cent, a move that can impact their profitability. On the other hand FMCG and realty have taken the lead and were supporting the markets.

The BSE Sensex is currently trading at 28991.03, up by 15.92 points or 0.05% after trading in a range of 28917.63 and 29054.82. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were underperforming the benchmarks; the BSE Mid cap index was down by 0.18%, while Small cap index lost 0.55%.

The top gaining sectoral indices on the BSE were Realty up by 1.18%, FMCG up by 1.11%, Capital Goods up by 0.56%, IT up by 0.34%, TECK up by 0.21%, while Oil & Gas down by 1.11%, Metal down by 0.80%, PSU down by 0.32%, Auto down by 0.26%, Bankex down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.65%, Hindustan Unilever up by 1.57%, NTPC up by 1.51%, ITC up by 1.50% and Larsen & Toubro up by 1.09%. On the flip side, ONGC down by 2.55%, Sesa Sterlite down by 2.51%, Tata Motors down by 1.59%, Tata Steel down by 1.51% and Reliance Industries down by 1.03% were the top losers.

Meanwhile, Power and Coal Minister Piyush Goyal, after the successful completion of the first round of the auction of 19 coal blocks has said that power consumers in the country stand to gain over Rs 30,000 crore over a period of time by way of a cut in electricity tariff. Goyal said that 'The first round of coal block auctions for 19 mines will fetch the government over Rs 1.3 lakh crore of which over Rs 30,000 crore will be savings from reduction in power tariff.'

In the auction process, while there was forward bidding for the unregulated sectors, there was reverse bidding process for power sector end-use, where the government had set a ceiling price that was representative of production cost of Coal India. If the ceiling price is Rs 1,000 and the bidder bids Rs 800, then the benefit of Rs 200 is directly passed on to consumers. This would mean if the power is sold at Rs 3.50, out of which is Re 1 is cost of coal the same will become 80 paise because of pass through benefit of Rs 200. Thus the new price of power will be Rs 3.30 per unit. Under the forward bidding, the companies were required to mention the price which they were willing to give to States.

Block wise, benefits to consumers in terms of power tariff reduction would be to the tune of Rs 657 crore from Talabira I mine, Rs 3,527 crore from Sarisatolli mine, Rs.7,571 crore from Trans Damodar mine, Rs 8,784 ccrore from Amelia North mine, Rs 5,041 crore from Tokisud North mine and Rs 11,469 crore from Gare Palma IV 2& IV 3 mines. The second round of auction in which government has put on sale 21 mines will begin from February 25.

The CNX Nifty is currently trading at 8764.00, up by 9.05 points or 0.10% after trading in a range of 8736.90 and 8777.40. There were 28 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 2.44%, Zee Entertainment up by 2.06%, BHEL up by 1.67%, Hindustan Unilever up by 1.55% and NTPC up by 1.44%. On the flip side, Jindal Steel & Power down by 3.46%, Bank Of Baroda down by 3.02%, Sesa Sterlite down by 2.82%, Cairn India down by 2.79% and ONGC down by 2.49% were the top losers.

The Asian markets were mostly in green, FTSE Bursa Malaysia KLCI gained 4.4 points or 0.24% to 1,813.79, KOSPI Index was up by 7.73 points or 0.39% to 1,976.12, Straits Times increased 8.42 points or 0.25% to 3,429.72, Jakarta Composite was higher by 18.24 points or 0.34% to 5,421.52, Taiwan Weighted added 99.86 points or 1.05% to 9,629.37, Nikkei 225 surged by 136.56 points or 0.74% to 18,603.48. On the other hand Hang Seng lost 104.53 points or 0.42% to 24,731.77.