Benchmarks add losses; Nifty slips below 7800 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 150 points and Nifty falling below the 7800 level, on account of selling in front line blue chip counters. The selling was witnessed mainly in IT stocks after the sharp hike in H-1B and L-1 visas by the US Congress. Further, Private banking stocks were subdued following the RBI directive on the new lending rate regime from April 1, 2016, while Oil stocks remained sluggish tracking weakness in global crude oil prices. Besides, weak trend in Asian stocks coupled with depreciation in rupee value also weighed on the sentiment. However, investors got some support with the Finance Ministry stating that India is well prepared to deal with the impact of the US Federal Reserve interest rate hike and the end of uncertainties will actually help policy makers in emerging economies. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 638 crore on December 17, 2015. 

On the global front, Asian shares took their cue from Wall Street and slipped in early trade, as the rout in oil prices returned to centre stage, with commodity-linked shares again taking a hit. US crude futures continued to slip in Asian trading, down 0.2 per cent at $34.89 a barrel. US rate rise sent the greenback rallying on Wednesday and Thursday, making oil more expensive for customers using weaker currencies. Japanese stocks returned to negative territory after briefly jumping on the central bank's statement that it would expand parts of its stimulus programme.

Back on street, stocks from Consumer Durables, Realty and Capital Goods counters were supporting the markets’ uptrend, while those from IT, Metal and Banking counters were adding to the underlying cautious undertone. In scrip specific development, shares of Aurobindo Pharma gained after the company has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Loperamide Hydrochloride Tablet, 2 mg. This product is expected to be launched in Q4 FY2015-16. On the other hand, shares of Somany Ceramics have dropped after the company set the floor price of Rs 357.24 per share for its qualified institutional placement (QIP) issue.

The market breadth on BSE was positive, out of 2276 stocks traded, 1088 stocks advanced, while 1016 stocks declined on the BSE.

The BSE Sensex is currently trading at 25638.63, down by 165.15 points or 0.64% after trading in a range of 25637.75 and 25789.51. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.21%, while Small cap index down by 0.01%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.90%, Realty up by 0.32%, Capital Goods up by 0.32%, FMCG up by 0.17% and Power up by 0.16%, while IT down by 0.98%, Metal down by 0.87%, TECK down by 0.76%, Bankex down by 0.63% and Oil & Gas down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.18%, Hindustan Unilever up by 0.79%, Cipla up by 0.61%, Larsen & Toubro up by 0.48% and Mahindra & Mahindra up by 0.17%. On the flip side, Vedanta down by 2.47%, Bajaj Auto down by 1.59%, Infosys down by 1.42%, HDFC down by 1.26% and Reliance Industries down by 1.20% were the top losers.

Meanwhile, Transport minister Nitin Gadkari has said that in order to curb pollution levels in metropolitan cities, he will issue a policy on flexible fuel engines by January 26. This move will help absorb extra ethanol supplies in the country and reduce pollution while providing a new market for the sugar sector. He also said that he will seek to convince the petroleum industry about the merits of biofuel.

Gadkari said that ‘We are working on a policy on flexi-fuel vehicles, which can run entirely on ethanol, but also have the option for petrol. I've told my officials to expedite work on this so that I can announce this before January 26.’ He further said that not much research or study is required to finalise the policy as countries like the US and Brazil are already implementing.

The minister has asked Germany's biggest car maker, Volkswagen, to make flexi-fuel vehicles for India. Emphasizing the need to boost ethanol production in the country to meet demand once the flexi-fuel system is in place, Gadkari said that its proportion in blended petrol should rise to 22% from the current 10%.

So far, there is less than 5 per cent ethanol blending with petrol in the country. In order to increase ethanol blending to the 100 per cent level, sugar mills need to raise production capacity from the current level. Stressing on the need to convert all mills towards ethanol production, Gadkari said that at present, 130 out of 500 sugar mills are manufacturing ethanol in India.

The CNX Nifty is currently trading at 7796.00, down by 48.35 points or 0.62% after trading in a range of 7795.05 and 7836.15. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.25%, Hindustan Unilever up by 0.79%, Adani Ports & Special up by 0.64%, BPCL up by 0.63% and Cipla up by 0.52%. On the flip side, Vedanta down by 2.52%, Ultratech Cement down by 2.04%, Bajaj Auto down by 1.76%, Infosys down by 1.41% and Ambuja Cement down by 1.36% were the top losers.

Asian markets were trading mostly in red, Jakarta Composite was down by 1.52%, Taiwan Weighted down by 0.48%, Nikkei 225 down by 0.53%, KOSPI Index was down by 0.13%, FTSE Bursa Malaysia KLCI down by 0.5% and Shanghai Composite down by 0.02%. On the flip side, Hang Seng down by 0.11%.