Benchmarks extend losses; IT, Bankex drag

Indian equity markets extend losses and started trading near the lowest point of the day in the late afternoon session on account of selling in frontline blue chip counters. Investors have taken cautious approach after Saudi Arabia launched air strikes in Yemen. The tensions in the Middle East come at a time of rising concerns foreign investors will pare some of their positions in India. Traders were seen piling positions in Capital Goods stocks while selling was witnessed in IT, Bankex and TECK sector stocks. In scrip specific development, TVS Motor Company was trading in green after foreign brokerage firm reiterated its conviction list-buy after Tamil Nadu government has withdrawn the input VAT credit reversal on inter-state sales of goods. The market may remain volatile today as traders roll over positions in the Futures & Options (F&O) segment from the near month i.e. March 2015 series to next month i.e. April 2015 series. The near month March 2015 derivatives contracts will expire today i.e. March 26, 2015.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,450 and 27,700 levels respectively. The market breadth on BSE was negative in the ratio of 863:1766 while 115 scrips remained unchanged.

The BSE Sensex is currently trading at 27677.38, down by 434.45 points or 1.55% after trading in a range of 27677.38 and 27997.14. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.56%, while Small cap index down by 0.72%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.24% while, IT down by 2.00%, Bankex down by 1.66%, TECK down by 1.51%, Metal down by 1.46%, PSU down by 0.95% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.11%, Larsen & Toubro up by 0.61%, Hero MotoCorp up by 0.48%, GAIL India up by 0.34% and ITC up by 0.21%. On the flip side, HDFC down by 4.69%, Infosys down by 2.93%, Coal India down by 2.57%, HDFC Bank down by 2.09% and Wipro down by 2.07% were the top losers.

Meanwhile, the union Cabinet, with a view to improve the power situation in the country has approved the supply of cheap liquefied natural gas (LNG) for power plants, it will help to rescue investments worth Rs 60,000 crore that was on the verge of sinking because of fuel scarcity. 31-gas fired power plants that have been lying idle for a while now and for which the government has squarely blamed the fall in output from the KG-D6 field of Reliance Industries, may get out of their misery with the new policy.

As per the new formula, pooling of imported gas and domestic gas for gas based power plants has been approved. The formula incorporates support from pipeline companies such as GAIL which have agreed for a cut in pipeline tariff and marketing margins. Gas transporters and re-gasification terminals have agreed to reduce their transportation tariff, marketing margin and re-gasification charges on the incremental RLNG (Re-Gasified Liquefied Natural Gas). On the other hand, State governments have agreed on a cut in duties on gas and will provide a subsidy up to the power tariff of Rs 5.5 per unit for purchasing gas based power.

Piyush Goyal, Union minister for power and coal has further elaborated that companies that need fuel will compete in a reverse auction by bidding the lowest amount of subsidy they need to supply electricity at Rs 5.50 per unit. The ministry has also decided that gas-based power plants will be allowed to run at 30 per cent capacity by using expensive imported gas. However, no changes would be made in the existing allocation of natural gas.

The government will organise a reverse bidding process in the next 30-35 days, while an empowered committee will have the power to revise the power purchase price as well as the limit to which the plant load factor of the subsidised plants can be increased after an initial assessment of the requirements at the plants is made.

The CNX Nifty is currently trading at 8407.25, down by 123.55 points or 1.45% after trading in a range of 8400.70 and 8499.45. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.42% and Bharti Airtel up by 1.08%, Ultratech Cement up by 1.00%, Larsen & Toubro up by 0.69% and NMDC up by 0.56%. On the flip side, HDFC down by 4.40%, Infosys down by 3.10%, Coal India down by 2.49%, Wipro down by 2.37% and ICICI Bank down by 2.32% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 275.08 points or 1.39% to 19,471.12, Taiwan Weighted decreased 48.71 points or 0.5% to 9,619.12, Hang Seng decreased 31.15 points or 0.13% to 24,497.08, Jakarta Composite decreased 25.14 points or 0.47% to 5,380.35, KOSPI Index decreased 20.25 points or 0.99% to 2,022.56 and FTSE Bursa Malaysia KLCI decreased 0.07 points or 0% to 1,819.03.

On the other hand, Straits Times increased 11.62 points or 0.34% to 3,430.64 and Shanghai Composite increased 21.37 points or 0.58% to 3,682.10.

The European markets were trading in red; Germany’s DAX decreased 158.68 points or 1.34% to 11,706.64, France’s CAC decreased 31.42 points or 0.63% to 4,989.57 and UK’s FTSE 100 decreased 32.91 points or 0.47% to 6,958.06.