Sensex and Nifty extends early losses; Maruti Suzuki down by over 5%

Tracking weakness in global markets, Indian equity markets extended early losses and currently trading near low point of the day in late morning session. The BSE - Sensex and NSE - Nifty fell further on the back of fall in index heavyweights. In currency market, rupee depreciated to one-week low against American currency, as euro fell to its lowest level. On sectoral front all were trading in red. However, Maruti Suzuki fell over 5.1% as the company declared an indefinite lockout at its Manesar plant in Haryana following the violence since Wednesday, while Reliance Communications shares plunged, after shelving a planned Singapore initial public offering for its undersea cable unit, citing unfavorable market conditions. In global markets, Asian shares tumbled, as Spain sparked concerns about its ability to sustain a sovereign bailout after two indebted regions sought financial assistance from the central government. Back home, the market breadth favoring negative trend; there were 876 shares on the gaining side against 1,475 shares on the losing side while 105 shares remained unchanged.

The BSE Sensex is currently trading at 16,962.87 down by 195.57 points or 1.14% after trading as high as 17047.73 and as low as 16,962.57. There were 2 stocks advancing against 28 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index down 0.89% while Small cap index was down 0.58%.

On the BSE sectoral space, there was no gainer on the index  while Metal down by 2.58%, Realty down by 1.94%, Power down by 1.79%, Capital Goods down by 1.79%, and Consumer Durables down by 1.63% were top losers on the index.

Dr Reddys Lab up by 0.76% and Tata Power up by 0.45% were only gainers on the Sensex, while Maruti Suzuki down by 5.60%, Sterlite Industries down by 3.67%, Hindalco Industries down by 3.28%, Tata Steel down by 2.98% and BHEL down by 2.86% were major losers on the index.

Meanwhile, with a view to counterbalance the impact of expensive imported fuel on power generation, Power Ministry has okayed the Coal Ministry’s price pooling model proposal for coal to ensure uniformity in the rates of the essential raw material across the country. The model, if given Prime Minister's Office (PMO) nod, would be adopted by the state run Coal India in its board meeting, scheduled to be held on July 31.

According to the model, around 30% of total requirement in imported coal for power plants around the coastal areas will be met, while those within 300 km of the coastline will be supplied with 15% of their total requirement. Meanwhile, rest of the power generators will use 100% domestic coal.

However, once the price pooling model is adopted, power tariffs for plants located in the coastal regions of east are expected to shoot up higher in comparison to the units that are located in west. Although units in the east mostly use domestic coal, they will have to pay more for coal under the price pooling mechanism, which fundamentally means common pricing of similar grade coal. This price is derived by taking the average price of imported and domestic coal. The model proposes that all consumers equally share the common price.

The S&P CNX Nifty is currently trading at 5,144.10, down by 61.00 points or 1.17% after trading as high as 5,164.20 and as low as 5,143.20. There were 4 stocks advancing against 46 declines on the index.

The top gainers on the Nifty were DR Reddy up by 0.74%, ACC up by 0.56%, Tata Power up by 0.35% and Ambuja cement up by 0.03%, while, Maruti down by 6.05%, Sterlite Industries down by 3.81%, Hindalco down by 3.64%, Sesa Goa down by 3.30% and Tata Steel down by 3.21% were the major losers on the index.

All the Asian equity indices were trading in red; KLSE Composite down 0.28%, Hang Seng index down by 2.58%, Kospi Composite Index down  1.84%, Jakarta Composite down by 1.43%, Nikkei 225 down 1.86%, Straits Times down 0.91%, Taiwan Weighted down 1.90% and Shanghai Composite down 1.04%.