Indian equities cut losses; trade continues in red

Indian equities trim losses but continued its weak trade below neutral line in the late afternoon session on account of selling spree by domestic investors. The market may also remain volatile as traders roll over positions from the near-month July 2012 series to August 2012 series. The July 2012 derivatives contracts will expire tomorrow i.e. July 26, 2012. Traders were seen piling up position in IT, Realty and TECk sector while selling was witnessed in Metal, Consumer Durable and Power sector. In the scrip specific development, HCL Technologies was seen trading firm with gain of around seven percent after the company posted a rise of 70.84% in its net profit at Rs 658.75 crore for the quarter ended June 30, 2012 as compared to Rs 385.59 crore for the same quarter in the previous year. Jindal Steel & Power hit 52-week low after posting a fall of 58.06% in its net profit (consolidated basis) at Rs 385.33 crore for the quarter ended June 30, 2012 as compared to Rs 918.79 crore for the same quarter in the previous year. OMDC was locked at upper circuit limit on receiving environment clearance from Ministry of Environment and Forest for production of 3 million tonnes per annum (mtpa) of Iron Ore (ROM) and 0.24 mtpa of Manganese Ore (ROM) for its KoIha-Roida Iron and Manganese Mines.

On the global front, the Asian markets were trading in red barring Jakarta Composite and KLSE Composite while the European markets were trading on optimistic note. EU officials believe Greece will have to restructure some 200 billion euros (around $242 billion) in debt, placing more strain on the European Central Bank and euro-zone members. Separately, Moody’s Investors Service lowered the outlook on Germany’s triple-A rating to negative from stable, citing mounting uncertainties arising from the euro-zone debt crisis. On the home turf, the NSE Nifty and BSE Sensex were trading below their psychological 5,150 and 16,900 levels respectively. The market breadth on BSE was negative in the ratio of 964:1638 while 122 scrips remained unchanged.

The BSE Sensex is currently trading lower by 50.83 points or 0.30% at 16867.25 after trading as high as 16899.01 and as low as 16736.60. There were 10 stocks advancing against 20 declines on the index.

The broader indices too continued its weak trade; the BSE Mid cap and Small cap indices were down by 0.63% and 0.78% respectively.

The top gainers on the BSE sectoral were IT up 0.43%, Realty up 0.29%, TECk up 0.11% and Bankex up 0.01%, while Metal down by 1.65%, Consumer Durable down by 1.22%, Power down by 1.06%, PSU were down by 0.85% and Oil & Gas down by 0.64%, were the top losers on the index.

ITC up by 0.86%, HDFC Bank up by 0.78%, ICICI Bank up by 0.53%, TCS up 0.31% and HDFC up by 0.30% were major gainers on the Sensex, while Jindal Steel down by 3.06%, HUL down by 2.32%, Wipro down by 1.94%, Bharti Airtel down by 1.70% and NTPC down by 1.64%, were the major losers in the index.

Meanwhile, Defense Minister A K Antony will now head the reconstituted Empowered Group of Ministers (EGoM) on natural gas and allocation, which will decide if the price of natural gas produced by Reliance Industries (RIL) from KG-D6 fields can be revised before 2014. Antony, who was not a part of the EGoM, has been included following Pranab Mukherjee’s resignation from finance ministry for contesting in Presidential election. Minister of State for Finance, Namo Narain Meena on the EGoM will be representing the finance ministry.

RIL has demanded a market price of KG-D6 gas instead of $4.205 per million British thermal unit rate, which was fixed for five years ending March 31, 2014. The company began its output from KG-D6 by April 1, 2009 and it has seen output halve to less than 30 million standard cubic meters per day in past two years. Now the company seeks market price, which will help it to deploy deep sea technologies to exploit difficult sections of the reservoir.

India imports liquefied natural gas (LNG) at three times the price fixed for KG-D6 gas and RIL is seeking that price for the eastern offshore fields. The Oil Ministry is, however, opposed to any revision in rates before timeline is fixed by the EGoM.

Apart from the two ministers, the EGoM also includes Petroleum Minister, Jaipal Reddy, Power Minister, Sushil Kumar Shinde, Fertiliser and Chemicals Minister, M K Alagiri, Law and Justice Minister, Salman Khurshid and Planning Commission deputy chairman, Montek Singh Ahluwalia.

The S&P CNX Nifty is currently trading lower by 15.60 points or 0.30% 5112.60, after trading as high as 5,121.60 and as low as 5,076.60. There were 12 stocks advancing against 38 declines on the index.

The top gainers on the Nifty were HCL Tech up by 7.09%, Ambuja Cement up by 3.81%, DLF up by 2.02%, ACC up by 1.36% and ITC up by 1.00%. While, SAIL down by 3.89%, Jindal Steel  down by 3.47%, HUL down by 2.36%, Reliance Infrastructure down by 2.35% and Hindalco Industries down by 2.09% were the major losers on the index.

Majority of Asian equity indices were trading in red; Hang Seng index skid 0.14%, Nikkei 225 plunged 1.44%, Taiwan Weighted slipped by 0.42%, Shanghai Composite down by 0.49%, Kospi Composite Index plunged 1.37% and Straits Times descended by 0.12%. On the other hand, Jakarta Composite inched higher by 0.05% and KLSE Composite added 0.02%.

The European markets were trading in green with, France’s CAC 40 ascended 0.53%, Germany’s DAX added 0.33% and the United Kingdom’s FTSE 100 gained 0.02%.