Benchmarks trade choppy in afternoon deals

Indian equity benchmarks are trading choppy in afternoon deals with frontline gauges somehow managing to keep their head above water. Markets have erased their early gains on account of profit booking. Traders failed to draw any sense of relief with Fitch Ratings’ statement that India is better placed than many of its peers after the American central bank, the US Federal Reserve, raised its key interest rates. On the global front, Asian markets are rallying at this point of time, as investors chose to take an historic hike in US interest rates as a mark of confidence in the world's largest economy, lifting the dollar and piling on the pain for oil prices.

Back home, select stocks from metal and mining counter edged higher as the government has approved allotment of coal blocks to public sector entities for commercial mining, taking the industry a step closer to complete deregulation and allowing private entry. However, industrial commodities including base metals and energy might decline further following a 25 basis point interest rate hike by the US Federal Reserve. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1,612 shares on the gaining side against 754 shares on the losing side while 193 shares remain unchanged.

The BSE Sensex is currently trading at 25500.20, up by 5.83 points or 0.02% after trading in a range of 25448.32 and 25659.32. There were 18 stocks advancing against 11 stocks declining on the index while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.70%, while Small cap index up by 0.99%.

The top gaining sectoral indices on the BSE were Metal up by 1.13%, Healthcare up by 0.74%, Realty up by 0.60%, Capital Goods up by 0.47% and Power up by 0.36%, while Auto down by 0.35%, FMCG down by 0.29%, Consumer Durables down by 0.08% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.74%, Hindalco up by 1.34%, SBI up by 1.19%, Sun Pharma up by 1.15% and Hero MotoCorp up by 0.91%. On the flip side, ONGC down by 1.99%, Mahindra & Mahindra down by 1.24%, BHEL down by 0.89%, Tata Motors down by 0.85% and Maruti Suzuki down by 0.80% were the top losers.

Meanwhile, considering the high demand of coal in the country than the current level of production and supply, the Cabinet Committee on Economic Affairs (CCEA) has given its approval for allotment of coal blocks to central and state public sector undertakings (PSUs) for the sale of the fossil fuel mainly to medium, small and cottage, under the provisions of the Coal Mines (Special Provisions) Act, 2015. This has ended the 41-year-old monopoly of the central government over mining and sale of coal.

This move is expected to improve domestic production of coal in order to meet growing demand of the economy, potentially cutting down imports. The move is likely to benefit the mineral-rich states to earn surplus revenue, which were until now earning royalty from private companies mining coal for captive use. Currently, states are allotted coal blocks but with specified end-use such as power production, steel and iron production etc.

The coal bearing States shall be getting additional revenue from such coal mines equal to the amount of royalty on the quantity of coal produced on a monthly basis during the lease period/life of the mine as well as one time upfront payment which is 10 percent of the intrinsic value of coal in the mine in three installments in the first year of allotment. It is expected that the incremental coal produced from such coal mines would cater to the unmet demand of the coal in the country, especially of medium, small and micro industries and bridge the gap between demand and supply considerably.

In the last fiscal year 2014-15, the domestic production of coal was 612.4 million tonnes (Provisional) ,as against a total consumption of 825.6 million tonnes (provisional).The gap between consumption and domestic supply is met through imports. Due to sustained efforts for increase in domestic production, import of coal that was showing positive growth since 2011-12, registered a negative growth of 12.2 percent during April-November 2015. However, the gap between the demand and the supply continues to be, large.

The CNX Nifty is currently trading at 7752.60, up by 1.70 points or 0.02% after trading in a range of 7737.55 and 7800.15. There were 32 stocks advancing against 17 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Tata Steel up by 3.02%, Tata Power up by 2.10%, Yes Bank up by 2.03%, PNB up by 1.45% and Hindalco up by 1.27%. On the flip side, Bosch down by 2.07%, ONGC down by 2.03%, Cairn India down by 1.87%, Idea Cellular down by 1.52% and Mahindra & Mahindra down by 1.22% were the top losers.

Asian markets were trading in green; KOSPI Index rose 8.56 points or 0.43% to 1,977.96, FTSE Bursa Malaysia KLCI increased 15.33 points or 0.94% to 1,649.46, Shanghai Composite soared 54.03 points or 1.54% to 3,570.21, Jakarta Composite surged 54.57 points or 1.22% to 4,538.02, Hang Seng gained 72.82 points or 0.34% to 21,774.03, Taiwan Weighted strengthened 135.01 points or 1.65% to 8,319.67 and Nikkei 225 was up by 303.65 points or 1.59% to 19,353.56.