Benchmarks continue to hold their head above water

After recovering from day’s low, benchmark equity indices were holding their head above water and trading up with modest gains of around 0.04%-0.03%, on emergence of buying by funds and retail investors in select stocks. Sentiment on the street improved with Minister of State for Finance Jayant Sinha’s statement that a high-powered committee to suggest revenue neutral GST rate will submit its report in the first week of December. The government is hoping to get the bill approved in the winter session beginning on November 26 and complete the other necessary legislative work by March 31. Appreciation in Indian rupee too supported the sentiments. The rupee recovered from over two-month low by rising 13 paise to 66.34 against the dollar in early trade on fresh selling of the US currency by exporters and banks. However, investors remained cautious ahead of the derivatives expiry for the month of November and the commencement of winter session of the Parliament. Holding slender gains, both Sensex and Nifty were trading above their crucial 25,800 and 7,850 levels respectively. The broader markets traded with smart gains with the BSE midcap and BSE smallcap indices up by 0.30 and 0.48 per cent, respectively.

On the global front, Asian markets trading mostly in red, as investors treading cautiously following the weak cues overnight from Wall Street and European markets. Besides, lower commodity prices weighed on resources stocks. Copper, which has fallen 12 per cent so far this month, stood at $4,490 per tonne, near 6 1/2-year low of $4,443.50 hit on Monday.

Back home, shares of Oil & Gas companies gained ground after the report that Qatar has agreed to waive USD 1 billion penalty on India for breaking a long-term LNG contract, and has also consented to change the pricing formula. Furthermore, Metal stocks were trading higher after Finance Minister Arun Jaitley’s statement that government is considering “proactive steps” to improve the health of steel and aluminium sectors which are reeling under the impact of decline in global prices.  In scrip specific development, shares of MRF gained after the company has received the formal approval from the State Government to set up the manufacturing facility in Medak district of Telangana. On the other hand, shares of Max India have dipped after the company’s board of directors approved to divest 23% stake in its health insurance company Max Bupa to its foreign partner Bupa for Rs 191 crore.

The market breadth on BSE was positive, out of 2260 stocks traded, 1301 stocks advanced, while 803 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25830.34, up by 11.00 points or 0.04% after trading in a range of 25703.86 and 25898.23. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.37%, while Small cap index up by 0.41%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.73%, Realty up by 0.69%, PSU up by 0.65%, FMCG up by 0.32% and Metal up by 0.29%, while TECK down by 0.47%, IT down by 0.42%, Capital Goods down by 0.39% and Auto down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.16%, HDFC up by 1.52%, Hindustan Unilever up by 1.44%, Coal India up by 0.57% and Cipla up by 0.52%. On the flip side, Maruti Suzuki down by 1.09%, Infosys down by 0.99%, Sun Pharma down by 0.80%, Larsen & Toubro down by 0.77% and Tata Motors down by 0.75% were the top losers.

Meanwhile, in a positive move for the domestic oil & gas sector, after months of intense negotiations RasGas of Qatar has agreed to waive $1 billion penalty on India for breaking a long-term liquefied natural gas (LNG) contract. Besides, RasGas has in-principle agreed to changing the current pricing formula based on a 60-month average of a basket of Japanese crude oil prices to a 3-month average of brent crude. This move will lower cost of LNG to $7-8 per million British thermal unit as compared to $12-13 currently.

India's biggest importer of LNG, Petronet LNG, has to pay for buying only 68 per cent of the contracted 7.5 million tons this year. As Petronet was taking only 68 percent of the volumes it agreed to in 25-year contracts with RasGas after a slump in global energy prices led to gas being available in spot or current market a roughly half that rate. The reduced offtake by the buyers forced Petronet to cut its purchase from RasGas

Earlier, state-owned GAIL India, Indian Oil Corp (IOC) and Bharat Petroleum Corp (BPCL) have committed to buy all of the 7.5 million tonne a year of LNG that Petronet is to import from Qatar. But with slump in global prices, they have opted to buy gas from spot market rather than use the long-term LNG. This resulted in idling of three cryogenic ships it had chartered hired for ferrying gas in its liquid form at sub-zero temperatures from Qatar to its import terminal at Dahej in Gujarat. According to the current deal negotiated, Petronet will take the quantities it did not take this year during the remainder of the contract period.

In the past year, the price of delivered spot LNG delivered tumbled more than 50 per cent to about $6.80 per million Btus. Whereas, the price of benchmark natural gas futures in the US tumbled 38 per cent in the past year, falling to lowest in more than three years.

The CNX Nifty is currently trading at 7851.50, up by 2.25 points or 0.03% after trading in a range of 7812.65 and 7867.50. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.42%, Ambuja Cement up by 1.89%, HDFC up by 1.83%, Cairn India up by 1.67% and Hindustan Unilever up by 1.62%. On the flip side, Bosch down by 2.49%, GAIL India down by 1.73%, Adani Ports &Special down by 1.25%, Infosys down by 1.10% and Maruti Suzuki down by 1.06% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 0.92%, Taiwan Weighted down by 0.87%, Shanghai Composite down by 0.73% and Jakarta Composite was down by 0.02%. On the flip side, Nikkei 225 was up by 0.24%, KOSPI Index up by 0.3% and FTSE Bursa Malaysia KLCI was up by 0.52%.