Markets continue to reel under pressure; Nifty slips below 8700 mark

Markets continued to reel under pressure as investors reduced their exposure in local equities ahead of the release of Federal Reserve's policy statement due later in the day that is expected to give direction on interest rates there. The Federal Reserve on Wednesday is expected to lay the groundwork for its first interest rate hike in nearly a decade, as it continues to weigh whether the U.S. recovery can hold up against collapsing oil prices and a soaring dollar. Besides, absence of positive trigger at home front also encouraged market-participants to stay light in equities. Off the day’s low, both Sensex and Nifty were trading below crucial 28,650 and 8,700 levels respectively, with losses of around half a percent. However, broader indices outperforming larger counterparts were up with gains in the range of 0.20-0.45%.

On the global front, most of the Asian pacific region was trading into positive territory, lifted by Stocks in Shanghai which climbed to near a seven-year high Wednesday, as hopes for further stimulus from Beijing encouraged investors to return to the market following a correction earlier this year on worries over slowing growth. Meanwhile, European stocks which rose in early trade on Wednesday, bouncing back after the previous session’s pull-back, led by a rally in Inditex shares after the Spanish fashion giant reported a rise in 2014 profit, had now succumbed to selling pressure.

Closer home, most of the sectoral indices on BSE were trading into negative territory, however stocks from Power, Auto and Information Technology counters were the prominent losers of the session. On the flip side, banking, Metal and Oil & Gas counters witnessing much of the demand had emerged as the top gainers of the session. Metal shares rose amid expectations that China will announce further stimulus measures aimed at boosting economic growth, while IT stocks declined for yet another session on rupee’s strength. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1592:1182; while 119 shares remained unchanged.

The BSE Sensex is currently trading at 28615.46, down by 120.92 points or 0.42% after trading in a range of 28581.38 and 28806.97. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.28%, while Small cap index up by 0.41%.

The gaining sectoral indices on the BSE were Bankex up by 0.54%, Metal up by 0.41%, Oil & Gas up by 0.22%, Realty up by 0.14%, Consumer Durables up by 0.12% while, Power down by 0.94%, Auto down by 0.67%, IT down by 0.65%, Capital Goods down by 0.58%, FMCG down by 0.54% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 2.10%, SBI up by 1.70%, Hero MotoCorp up by 0.85%, Tata Power up by 0.62% and GAIL India up by 0.57%. On the flip side, NTPC down by 3.36%, BHEL down by 2.18%, Tata Motors down by 2.01%, Hindustan Unilever down by 1.64% and ONGC down by 1.48% were the top losers. Meanwhile, amid speculation of cartelisation during their bidding process in the coal block auctions, the government is re-examining the bids for nine coal blocks, including those where Jindal Steel and Balco emerged the top bidders, and a final decision on their fate would be taken by this weekend.

Coal Secretary Anil Swarup, though has said that the government wasn’t looking at cartelisation aspect at the moment and it was only re-examining and not reviewing, “because there was no decision taken. Review happens when you take a decision.” He further stated that if some irregularities are found the government can re auction the mines, it can allot the mines to the state or it can give the blocks to Coal India.

The bids of four coal blocks of the schedule II mines (ready to produce) which are being re-examined are Gare Palma IV 2, Gare Palma IV 3, Gare Palma IV-1 and Marki Mangli III, while for schedule III mines are Brinda and Sasai mine (one bid was invited for both the mines), Meral mine, Dumri mine, Tara mine and Mandla South mine. Earlier, there were reports that some bidders could have indulged in cartelisation to keep the prices low for the concerned mines. So far, a total of 33 coal blocks have been auctioned in two tranches, while in the first lot 19 coal mines were auctioned, in the second lot 14 coal blocks went for sale.

The CNX Nifty is currently trading at 8693.60, down by 29.70 points or 0.34% after trading in a range of 8670.35 and 8747.25. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 4.17%, BPCL up by 2.84%, Sesa Sterlite up by 2.26%, Jindal Steel & Power up by 1.84% and SBI up by 1.75%. On the flip side, NTPC down by 3.33%, Asian Paints down by 2.46%, BHEL down by 2.44%, Tata Motors down by 1.89% and Hindustan Unilever down by 1.68% were the top losers.

Asian markets were trading higher; with FTSE Bursa Malaysia KLCI trading higher by 8.88 points or 0.5% to 1,796.75; Shanghai Composite trading higher by 74.46 points or 2.13% to 3,577.30; Nikkei 225 trading higher by 107.48 points or 0.55% to 19,544.48; Taiwan Weighted trading higher by 113.99 points or 1.19% to 9,653.43 and Hang Seng trading higher by 218.59 points or 0.91% to 24,120.08.

On the flip side, Jakarta Composite down by 15.65 points or 0.29% to 5,423.51; Straits Times down by 5.16 points or 0.15% to 3,364.79 and KOSPI Index down by 1.46 points or 0.07% to 2,028.45.

European markets turned mixed after positive close; with UK’s FTSE 100 trading higher by 24.56 points or 0.36% to 6,862.17, while Germany’s DAX was trading lower by 9.16 points or 0.08% to 11,971.69; France’s CAC was trading lower by 0.93 points or 0.02% to 5,028.00.