Key benchmark indices continue to trade lower

Key benchmark indices continued to trade lower in early afternoon session amid growing uncertainty over the outcome of the U.S. presidential election. Losses in the Metal, Realty, Capital Goods, Consumer Durables and PSU stocks dampened the mood. Traders were unable to get any comfort with report that in a major breakthrough for rollout of the Goods and Services Tax (GST) regime from April 1 next year, the government has finalized four-tier GST tax structure of 5, 12, 18 and 28 percent that aims to lower tax incidence on most goods and keep out essential items. Meanwhile, Chief Economic Advisor Arvind Subramanian has said that the GST Council’s decision to peg the tax rate on items of mass consumption at 5 per cent will bring down prices and soften inflation. In scrip specific development, Larsen & Toubro was down by around 2 percent after the government decided to sell about 3 percent stake in the company held by the SUUTI through a block deal, as early as Friday.

On the global front, Asian markets were trading mostly in red as investors remained cautious ahead of the U.S. presidential election next week as well as the release of the U.S. jobs data for October later in the day.

The BSE Sensex is currently trading at 27379.98, down by 50.30 points or 0.18% after trading in a range of 27300.02 and 27498.91. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.95%, while Small cap index down by 1.89%.

The only gaining sectoral indices on the BSE were FMCG up by 1.88% and IT up by 0.14%, while Metal down by 1.90%, Realty down by 1.68%, Capital Goods down by 1.27%, Consumer Durables down by 1.15% and PSU down by 1.11% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 4.24%, Mahindra & Mahindra up by 1.90%, Hindustan Unilever up by 1.81%, Axis Bank up by 1.69% and Asian Paints up by 1.46%. On the flip side, Sun Pharma Inds. down by 6.13%, Dr. Reddys Lab down by 5.40%, Lupin down by 4.59%, Coal India down by 3.26% and Maruti Suzuki down by 2.20% were the top losers.

Meanwhile, in order to bring down coal imports at a faster rate, government said that power sector public sector units (PSUs) will follow 'zero coal imports' policy from the next fiscal onwards, this will also boost domestic coal production. The government has also set a target to produce 1.5 billion tonnes of coal domestically by 2020. Coal Ministry Secretary Anil Swarup has said that in the power sector, there will be zero coal imports by all the public sector entities by March 31 of this fiscal year and there will be no imports thereafter.

The Coal Secretary said that this year, they should be able to reduce imports by 15 million tones, as they have done a detailed analysis of how to handle imports and the strategy related to both power and non-power sector. Further, on private sector he said that to discourage coal imports by private sector, they are increasing the amount of coal which is available through e-auction. Since, e-auction prices have come down, the coal is available at a much cheaper rate. He added that with the firming up of international prices, chances increase that this coal (coal available through e-auction) would be picked up.

Regarding commercial mining, Swarup said the ministry is going in steps. The first steps have already been taken through allocations of coal mines to state governments. But in terms of offering mines to private sector for commercial purposes, he said the ministry is ‘working towards it’. He said that there has been a paradigm shift in the problem from a phase of supply shortage to a phase of demand shortage and this demand shortage was due to low generation of the generation companies at Plant Load Factor (PLF) not more than 59-60 percent. In a demand shortage scenario, the inventory benchmark for the power plants has come down to 15 days from 20-25 days and this has happened because coal is available.

The CNX Nifty is currently trading at 8455.90, down by 29.05 points or 0.34% after trading in a range of 8432.50 and 8504.00. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were ITC up by 4.24%, HCL Tech. up by 2.29%, Axis Bank up by 1.90%, Hindustan Unilever up by 1.86% and Mahindra & Mahindra up by 1.85%. On the flip side, Sun Pharma Inds. down by 6.12%, Dr. Reddys Lab down by 4.95%, Bharti Infratel down by 4.67%, Lupin down by 4.45% and Aurobindo Pharma down by 4.06% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 229.32 points or 1.34% to 16,905.36, Jakarta Composite shed 21.88 points or 0.41% to 5,307.62, Shanghai Composite was down by 8.71 points or 0.28% to 3,120.22, KOSPI Index decreased 1.78 points or 0.09% to 1,982.02 and FTSE Bursa Malaysia KLCI slipped 0.63 points or 0.04% to 1,647.45.

On the flip side, Taiwan Weighted increased 0.88 points or 0.01% to 9,068.15 and Hang Seng was up by 10.88 points or 0.05% to 22,694.39.