Markets on path to recovery; Nifty still below 8500

Markets despite good recovery attempt continue to trade marginally in the red in the early noon session, there is good bounce back in the banking stocks that is supporting the markets in regaining some lost ground after witnessing massive sell-off in last session. Banking stocks were under pressure since morning after a global brokerage reduced weight on Indian Banks and suggested selling corporate lenders including SBI and PNB. They also cut the target price of the likes of Axis Bank and ICICI Bank and downgraded Bank of Baroda and Yes Bank to neutral. IT counter that dragged the markets lower despite good global cues, too has stablised, trading modestly in red. Traders were also eyeing the political development that was keeping the momentum cautious, a day after the controversial land bill was tabled in the Lok Sabha, uproar over it is likely to continue in the second half of the Budget Session with the Opposition protesting against the proposed changes in the bill. Back on street, broader markets managed to put themselves in green, while on the sectoral front, healthcare was the biggest laggard, down by over two percent mainly due to fall in Sun Pharma. Japan's Daiichi Sankyo Company  is selling its whole holding of shares worth up to $3.6 billion in Sun Pharmaceutical Industries. The stocks were trading lower by over 9%.

The BSE Sensex is currently trading at 27874.95, down by 11.26 points or 0.04% after trading in a range of 27687.07 and 27976.93. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were showing better recovery mood; the BSE Mid cap index was up by 0.46%, while Small cap index gained 0.24%.

The top gaining sectoral indices on the BSE were Realty up by 0.85%, Bankex up by 0.84%, Capital Goods up by 0.68%, Consumer Durables up by 0.57%, INFRA up by 0.55%, while Oil & Gas down by 0.33%, Auto down by 0.22%, FMCG down by 0.03%, IT down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.13%, Bharti Airtel up by 1.63%, ICICI Bank up by 1.41%, Tata Steel up by 1.09% and Coal India up by 1.09%. On the flip side, Sun Pharma Inds. down by 8.92%, Dr. Reddys Lab down by 2.27%, Maruti Suzuki down by 1.97%, Hindalco down by 1.84% and Hindustan Unilever down by 1.79% were the top losers.

Meanwhile, the government after garnering over Rs 2 lakh crore by auctioning off 29 blocks in two phases, may start the third round of coal mines auction as soon as next month and may come out with a notice inviting application for the mines for the next round of auction next week.

Coal Secretary Anil Swarup has said that most of the clearances of the coal blocks to be auctioned in the third round are there. The ministry may put up 23 blocks this time, earlier it was said that Coal Ministry will put up 16 mines in the third round, 11 in regulated and five in unregulated sector. The auction methodology would remain the same as in the earlier tranches. For the power sector mines it would be reverse bidding and forward bidding for the unregulated sectors.

In the current auctioning, monies to state governments accrued from two income streams - royalty at 14 per cent of the comparable Coal India grade price and the per-tonne price quoted in the winning bid. Swarup had earlier said that that states will receive Rs 466 crore as first tranche, while the Centre will not keep any revenue from the upfront payment by bidders. Once mining begins, state governments will also make additional sums from royalty. But this amount from operating mines accrued earlier too, as royalty rates are governed by regulations existing previously.

After the third tranche of auctions is over, the coal ministry is expected to commence allotment of coal blocks to mining PSUs of different states for selling fuel to coal-starved utilities.

The CNX Nifty is currently trading at 8449.60, up by 1.50 points or 0.02% after trading in a range of 8382.65 and 8469.35. There were 30 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.32%, Bharti Airtel up by 1.83%, Yes Bank up by 1.61%, Indusind Bank up by 1.56% and ICICI Bank up by 1.46%. On the flip side, Sun Pharma Inds down by 8.89%, HCL Tech. down by 3.70%, Dr. Reddys Lab down by 2.32%, Maruti Suzuki down by 2.11% and Hindustan Unilever down by 1.85% were the top losers.

Most of the Asian markets were trading in green, Straits Times was up by 3.93 points or 0.11% to 3,507.18, FTSE Bursa Malaysia KLCI increased by 7.45 points or 0.4% to 1,856.11, Jakarta Composite increased 21.95 points or 0.41% to 5,422.75, Shanghai Composite gained 27.77 points or 0.66% to 4,244.85, Nikkei 225 surged by 274.6 points or 1.4% to 19,909.09 and Hang Seng heaved 519.97 points or 1.92% to 27,614.90.

On the other hand, Taiwan Weighted lost 18.87 points or 0.2% to 9,533.98 and KOSPI Index was down by 1.92 points or 0.09% to 2,144.79.