Benchmarks add losses; Nifty slips below 8600 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 150 points and Nifty falling below the 8600 level, on sustained selling by investors amid a weak global trend. Investors turned edgy due to the lack of positive domestic triggers and weak earnings forecast. Some traders remained on the sidelines and refrained from any buying activity, focusing on domestic developments included the ongoing budget session in Parliament. Besides, depreciation in Indian rupee too weighed down sentiments. However, losses remained capped as Reserve Bank of India (RBI) Governor Raghuram Rajan has doubled the cheers of worried investors and India Inc by saying that India is ready to deal with any foreign fund outflows as a result from the rate hike.  Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,428.72 crore on March 19, 2015.

On global front, Asian stock markets were mostly lower after a slide in oil prices drove a Wall Street decline. Wall Street sentiment was dampened by data Thursday showing that weekly applications for unemployment aid edged up last week. That came after stocks surged Wednesday on news the Federal Reserve was in no hurry to raise ultra-low interest rates that have helped lift stock and bond prices. Back home, the rupee depreciated by five paise at 62.57 against the US dollar in early trade on fresh demand for the American currency from importers.

Back on street, stocks from IT and Teck counters were supporting the markets’ uptrend, while those from Power, Realty and PSU counters were adding to the underlying cautious undertone. In scrip specific development, shares of Wipro strengthens on bagging 5-year deal from Greater Cincinnati Water Works. On the other hand, shares of IRB Infrastructure Developers have declined after the company fixed the discounted floor price at Rs 230.54 for the qualified institutional placement (QIP).

The market breadth on BSE was negative, out of 2221 stocks traded, 616 stocks advanced, while 1531 stocks declined on the BSE.

The BSE Sensex is currently trading at 28315.54, down by 154.13 points or 0.54% after trading in a range of 28307.97 and 28484.36. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.91%, while Small cap index down by 1.18%.

The gaining sectoral indices on the BSE were IT up by 0.53% and TECK up by 0.24% while, Power down by 2.07%, Realty down by 1.86%, PSU down by 1.72%, Consumer Durables down by 1.41% and Infrastructure down by 1.38% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.83%, Infosys up by 1.06%, TCS up by 0.40%, HDFC up by 0.27% and Coal India up by 0.15%. On the flip side, NTPC down by 6.60%, GAIL India down by 3.08%, BHEL down by 2.45%, ICICI Bank down by 1.92% and Tata Motors down by 1.73% were the top losers.

Meanwhile, Crisil Research, the research arm of the global credit rating agency, Crisil has come up with a report stating that the recent coal block auctions might have addressed some fuel supply issues, but private power producers with nearly 10,000 MW capacity may have to face under-recovery to the extent of 65 paise per unit because of aggressive bidding. The under recovery of 65 paise per unit will translate to a total under recovery of Rs 1350 crore in the next financial year.

In its report, Crisil Research has said that players who went for aggressive bidding could clock under-recovery of Rs 1,350 crore in FY16 because variable tariffs will not cover mining costs and production-linked payments to Government “The aggressive bids indicate the big premium on fuel security. Bid winners have agreed to forego, on average, mining costs of Rs 650 per tonne and pay an additional premium of Rs 400 per tonne to States in FY16.” To offset the resultant 65 paise per unit under-recovery in the variable tariff, recently commissioned or under-construction projects will require an average first-year fixed tariff of close to Rs 3.5 per unit.

Crisil further estimates that deficit or under-recovery could rise to more than Rs 4,500 crore once allotted coal blocks reach peak production. It said that around 22-25 GW of power projects-both operational and expected to be commissioned by 2016-17-are untied and will compete for new PPAs. For those power producers who are yet to sign PPAs, intense competition will make it difficult to pass on the high coal cost through the fixed cost option.

The CNX Nifty is currently trading at 8590.55, down by 44.10 points or 0.51% after trading in a range of 8589.75 and 8627.90. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Wipro up by 1.80%, Infosys up by 1.19%, HDFC up by 0.67%, TCS up by 0.49% and Sun Pharma up by 0.41%. On the flip side, NTPC down by 6.27%, GAIL India down by 3.13%, BPCL down by 2.47%, BHEL down by 2.45% and NMDC down by 2.22% were the top losers.

Asian markets were trading mostly in the red; Hang Seng dipped 0.25%, Jakarta Composite decreased 0.39%, Taiwan Weighted slipped 0.12%, FTSE Bursa Malaysia KLCI declined 0.44%, Shanghai Composite shed 0.19%, KOSPI Index dropped 0.39% and Nikkei 225 was down by 0.05%. On the flip side, Straits Times was up by 0.63%.