Markets pare opening gains on profit taking in banking stocks

Indian markets extending their gains made a positive start on Tuesday morning, traders taking cues from the surge in global markets went on buying spree, as fading concern about the geopolitical impact of the attacks in Paris spurred appetite for riskier assets. Good buying interest was visible among the fund houses as well as the retail investors. Traders were getting some encouragement with report of government working to mend relations with the Opposition to ensure smooth passage for stalled bills in the upcoming session of the Winter Session. Also, as the Finance Minister Arun Jaitley’s stated that low oil prices have created a favourable environment for the Indian economy as it helped to absorb the loss faced by oil companies and kept inflation under control. However, there was some cautiousness too, with the exports shrinking in October due to slowdown in global demand and led by a drop of 57% in petroleum products, 85.5% in iron ore, 11.65% engineering and 12.84% gems & jewellery. Back on street, some profit taking has started appearing in the banking stocks that led the benchmarks pare most of the gains. The broader markets were performing better than the benchmarks, while on sectoral front FMCG, realty, metal and healthcare were trading higher, on the other hand banking, IT and oil & gas were witnessing some profit taking.

In scrip specific actions, ICICI Bank was up by about a percent, as India's biggest private sector lender by assets is selling 6 per cent stake in its life insurance joint venture in two separate deals worth a combined Rs 1,950 crore ($296 million) to billionaire Azim Premji and Singapore state investor Temasek.

The BSE Sensex is currently trading at 25807.91, up by 47.81 points or 0.19% after trading in a range of 25799.21 and 25917.01. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index gained 0.56%.

The top gaining sectoral indices on the BSE were FMCG up by 1.37%, Realty up by 1.21%, Metal up by 1.17%, Power up by 0.54%, Capital Goods up by 0.37% while, IT down by 0.48%, TECK down by 0.37%, Oil & Gas down by 0.28%, Bankex down by 0.10%, Consumer Durables down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.84%, Hindalco up by 2.40%, ITC up by 2.04%, Tata Steel up by 1.41% and Sun Pharma Inds. up by 1.31%. On the flip side, Dr. Reddys Lab down by 2.07%, Infosys down by 1.81%, ONGC down by 1.32%, Bharti Airtel down by 1.15% and Axis Bank down by 0.70% were the top losers.

Meanwhile, in a bid to revive interest in oil and gas exploration by simplifying rules, the petroleum ministry's has floated a consultation paper titled “New Fiscal and Contractual Regime for Award of Hydrocarbon Acreages”, to invite comments from stakeholders. The government has proposed to introduce a revenue-sharing model with operators for exploration and development of oil and gas blocks, replacing the current profit-sharing mechanism.

The Oil Ministry said that in the recently announced marginal field policy, the government has provided pricing and marketing freedom for the natural gas. On similar lines, it is proposed to provide pricing and marketing freedom for the natural gas to be produced from the areas to be awarded under the new contractual and fiscal regime, in order to incentivise production from these areas. It also proposed Open Acreage Licensing Policy (OALP) allowing companies to choose the area for exploration rather than government identifying blocks and offering them in bid rounds.

The ministry has also proposed a uniform licensing policy that will allow operators to explore all forms of oil and gas resources, including coal-bed methane, shale gas and oil, tight gas and gas hydrates and suggested an open acreage licensing that will allow companies to bid for exploration blocks of their choice. Under open acreage licensing, which will replace the existing New Exploration Licensing Policy, the upstream regulator will apply its own geological data to authenticate the expressions of interest submitted by companies for an area and carve out blocks. This will be followed by invitation of bids from all interested parties.

At present, conventional oil and gas exploration is covered by the New Exploration Licensing Policy (NELP) while CBM exploration and production is governed by a separate regime. There is no licensing regime for shale oil and gas. The Comptroller and Auditor General (CAG) had questioned this regime and argued that it “does not provide adequate incentives to private contractors to reduce capital expenditure”.

The CNX Nifty is currently trading at 7822.45, up by 15.85 points or 0.20% after trading in a range of 7819.10 and 7850.15. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 3.13%, Hindalco up by 2.15%, ITC up by 2.02%, Tech Mahindra up by 1.66% and Sun Pharma Inds. up by 1.59%. On the flip side, Dr. Reddys Lab down by 2.37%, Infosys down by 1.74%, BPCL down by 1.46%, Bharti Airtel down by 1.37% and Bank Of Baroda down by 0.99% were the top losers.

All the Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 10.79 points or 0.65% to 1,666.79, KOSPI Index gained 26.64 points or 1.37% to 1,969.66, Shanghai Composite was higher by 51.11 points or 1.42% to 3,658.07, Jakarta Composite gained 70.71 points or 1.59% to 4,512.89, Taiwan Weighted increased 145.9 points or 1.76% to 8,441.30, Nikkei 225 surged 298.07 points or 1.54% to 19,691.76 and Hang Seng zoomed by 459.43 points or 2.09% to 22,470.25.