Key benchmark indices trade flat with negative bias

Key benchmark indices continued to trade flat in noon session, on account of selling in frontline blue chip counters and tailing weak global counterparts. The sentiments remained under pressure with the report that economic think tank National Council of Applied Economic Research (NCAER) has lowered the country's growth forecast to 6.9% for the current fiscal on account of government’s demonetisation drive to curb black money and corruption. Depreciation in rupee value against the dollar coupled with the losses in Telecom, Banking, Auto, PSU and Basic Materials stocks, weighed on the sentiments. However, downside was capped as some support came with the Finance Minister Arun Jaitley’s statement that the demonetisation process is almost complete and it has been the smoothest possible replacement of currency anywhere in the world. In scrip specific development, INOX Leisure was up by over three percent after commencing commercial operations of Multiplex Cinema Theatre in Gujarat.

On the global front, Asian markets were trading mostly in red as investors looked ahead to U.S. President Donald Trump's speech to Congress this week for details of promised tax cuts and infrastructure spending.  Back home, the BSE Sensex is currently trading at 28900.56, up by 7.59 points or 0.03% after trading in a range of 28812.88 and 28961.83. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.09%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Energy up by 1.88%, Oil & Gas up by 0.73%, IT up by 0.67%, Consumer Durables up by 0.30% and TECK up by 0.28%, while Telecom down by 1.15%, Bankex down by 0.89%, Auto down by 0.75%, PSU down by 0.63% and Basic Materials down by 0.51% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 4.81%, Hindustan Unilever up by 1.24%, Infosys up by 1.18%, Bajaj Auto up by 0.58% and Wipro up by 0.56%. On the flip side, Axis Bank down by 2.91%, Power Grid down by 2.26%, Bharti Airtel down by 1.35%, Tata Motors down by 1.31% and Mahindra & Mahindra down by 1.18% were the top losers.

Meanwhile, with an aim to give more freedom to states to use their allocated coal, the power ministry has finally framed new rules to get electricity supply from most efficient independent power producers (IPP) in lieu of dry fuel. The new rules will replace the earlier rigid practice of allocation of coal to individual state-owned plants.

According to the new rules finalized by the government, the energy generated under this arrangement will be treated as transfer of coal. It is provided that the landed cost of power from IPP generating station at the buyer's periphery should be lower than the variable cost of generation of the state generating station whose power is to be replaced by that of IPP. Further, the landed cost of power shall be inclusive of the transmission charges and losses.

Under this arrangement, the IPP will make its own assessment about the availability of transmission corridor for the quantum of power offered and the period of supply before submitting price bids during e-reverse bidding. Besides, the rules provide that any restriction imposed by regional/states load dispatch centres (RLDCs/SLDCs) on scheduling of power due to breakdown of transmission and grid constraints shall be treated as force majeure without any liability on either side. Also, during the force majeure, no coal transfer shall be made to the seller.

The CNX Nifty is currently trading at 8924.60, down by 14.90 points or 0.17% after trading in a range of 8913.65 and 8951.80. There were 16 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 4.84%, Aurobindo Pharma up by 2.10%, Infosys up by 1.30%, Hindustan Unilever up by 1.25% and Lupin up by 0.69%. On the flip side, Axis Bank down by 3.00%, Zee Entertainment down by 2.55%, Power Grid down by 2.28%, Bharti Infratel down by 2.13% and Ambuja Cement down by 2.09% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 176.07 points or 0.91% to 19,107.47, Hang Seng declined 101.04 points or 0.42% to 23,864.66, Shanghai Composite shed 20.42 points or 0.63% to 3,233.02, KOSPI Index slipped 8.6 points or 0.41% to 2,085.52 and Jakarta Composite was down by 3.26 points or 0.06% to 5,382.65.

On the flip side, FTSE Bursa Malaysia KLCI was up by 3.31 points or 0.19% to 1,701.66.