Benchmarks gyrate in narrow band; Sensex trades sub 17000 crucial bastion

Benchmark equity indices oscillating in a tight band are sustaining early losses on account of portfolio positioning by domestic institutional investors ahead of the fiscal year-end this week and on account of derivatives expiry, the last settlement for the financial year 2011-12. Cautious approach of foreign investors has also kept local investors wary as Finance Minister’s clarification over GAAR has failed to calm jittery nerve. Meanwhile, negative global set up of the bourses is also pushing bears to the defensive.

On the global front, Asian stocks failing for a second day headed for the first monthly drop since November as U.S durable-goods orders and earnings trailed estimates. In the U.S, a key export market for Asia, the Commerce Department reported durable goods orders increased 2.2% in February, not enough to fully reverse January's revised 3.6% decline. Meanwhile, the US future indices continued to show downtick in the screen trade.

Back on the home turf, stocks from Information Technology, Technology and Capital Goods counters are leading the BSE sectoral chart from behind, thereby sinking Sensex sub its 17000 psychological mark. However, Bankex and Power index are depicting weakness. Banking index edged lower on worries of a rise in cost of funds and heavy government borrowing in the first half of next fiscal year starting in April. Meanwhile, the widely followed index of National Stock Exchange (NSE)-Nifty-too trading lackluster was oscillating sub 5200 level. The broader indices were depicting mixed trend. The overall market breadth on BSE is in the favour of declines which thumped advances in the ratio of 1068:1004, while 80 shares remained unchanged.

The BSE Sensex is currently trading at 16,993.52, down by 128.10 points or 0.75%. The index has touched a high and a low of 17,045.76 and 16,952.27 respectively.  There were 5 stocks advancing against 25 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index declined by 0.30% and small cap index rose 0.19%.The only gaining sectoral index on the BSE was CD up by 0.13%. On the flip side, IT down by 1.22%, TECk down by 1.06%, CG down by 0.98%, FMCG down by 03.82% and Power down by 0.60% were the top losers on the index.

The top gainers on the Sensex were Hero MotoCorp up by 1.19%, Coal India up by 1.13%, Jindal Steel up by 0.75%, NTPC up by 0.43% and RIL up by 0.12%.

On the flip side, Infosys down by 1.67%, Cipla down by 1.63%, Maruti Suzuki down by 1.58%, Hindalco Industries down by 1.55% and TCS down by 1.35% were the top losers on the Sensex.

Meanwhile, Public sector companies again dominated the ninth round of oil and gas acreages auction. ONGC got operating rights for four blocks, while a consortium led by Oil India won two blocks. Gail India led a consortium that was awarded one onshore block in the Cambay basin.

Under the ninth bid round of New Exploration Licensing Policy (NELP-IX), the government had received bids for 33 blocks out of 34 offered. Though private sector companies like Reliance Industries and Cairn India had put in their bids but they were unable to cash in.

Other companies awarded blocks in the ninth round were Sankalp Oil and Natural Resources, which won three, while one block each was won by Focus Energy, Pratibha Oil and Natural Gas, Pan India Consultants & Frost International, and Deep Energy, a subsidiary of Deep Industries which is based in the United States, in a consortium with other companies has got operatorship of three onshore blocks.

The winning of a majority of blocks by PSUs is not surprising as the process saw little participation from foreign companies. India is the world's fourth-largest oil importer and ships in 80% of its oil needs. Given the increasing demand for energy in the country, the government has been trying to woo foreign players. However foreign companies have been shying away from the Indian markets due to its poor track record of commercial discoveries and sluggish bureaucracy. The previous two licensing rounds were also dominated by Indian state-run firms.

On the 10th round of auction, Oil Minister Jaipal Reddy said, India will continue auctioning oil and gas blocks but won't switch to a new process of accepting bids for exploratory blocks at any time due to data-related issues. Unless we have a national data repository, we can't go in for open-acreage licensing. By adding more he said, ‘we want to go in for the 10th round as quickly as possible.’ 

The S&P CNX Nifty is currently trading at 5,153.40, lower by 41.35 points or 0.80%. The index has touched a high and a low of 5,163.95 and 5,139.45 respectively. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were Jindal Steel up by 1.02%, Hero MotoCorp up by 0.76%, Coal India up by 0.60%, Sun Pharma up by 0.57% and BPCL up by 0.20%.

On the flip side, Infosys down by 2.08%, Rpower down by 1.91%, Hindalco down by 1.87%, ACC down by 1.81% and Bharti Airtel down by 1.52%, were the major losers on the index.

Most of the Asian equities were trading in the red; Shanghai Composite declined by 0.58%, Hang Seng plunged by 1.20%, Jakarta Composite shed 0.21%, Nikkei 225 lowered by 0.89%, Straits Times  shed 0.32%, Seoul Composite plummeted 1.02% and Taiwan Weighted slipped by 2.24%.

On the flip side, KLSE Composite up by 0.03% was the sole gainer in the Asian pack.