Benchmarks sink to intra-day’s low level; IMG meet to review the status of 58 coal blocks eyed

Indian equity markets have clearly squandered a firm start as benchmark equity indices have further sank into red, on account of persistent weakness in Realty, Oil & Gas and Metal counters. Meanwhile soft European markets start also has dented the sentiment in home markets, with reports highlighting manufacturing sector activity slowing to nine month low, dragging benchmark’s to fresh intra-day’s low. 30 share barometer index, Sensex, offloading over 50 points us trading sub 17400 level, while Nify, too shedding over 10 points is trading sub 5250 level, its lowest point of the session. However, broader indices have managed to hold their neck upright in green.

According to the HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at the slowest pace in the nine months to 52.8 in August, 2012. On the global front, European stocks have opened slightly lower Monday as focus shifts from the Federal Reserve to the European Central Bank's next policy move. On the flip side, mostly positive regional counterparts are limiting the downside of the bourses.

Back home, some sense of caution is also seen ahead of an Inter-Ministerial Group (IMG) to meet later today to review the status of 58 coal blocks which both public and private firms failed to develop within stipulated time frame. However, gains of Consumer Durable, Power and Auto stocks are providing a cap to the losses of the bourses.

The BSE Sensex is currently trading at 17,375.32, down by 54.24 points or 0.31% after touching a high of 17509.99 and low of 17,349.57. There were 11 stocks advancing against 19 declines on the index. The overall market breadth on BSE is in the favour of advances which outnumbered declines in the ratio of 1268:1171, while 109 shares remained unchanged.

The broader indices managed to hold their neck upright in green; the BSE Mid cap index was sustaining with gains of 0.13%, while Small cap index was trading in green by 0.04%.
The top gainers on the BSE sectoral space were, CD up by 0.34%, Power up by 0.17%, Auto up by 0.05%. On the flip side, Realty down by 0.98%, Oil & Gas down by 0.92%, Metal down by 0.57%, Bankex down by 0.41% and Health Care (HC) down by 0.38% were top losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 2.64%, NTPC up by 1.31%, Maruti Suzuki up by 1.26%, Cipla up by 1.19% and BHEL up by 0.77%. On the flip side, Jindal Steel down by 1.83%, Tata Power down by 1.71%, Tata Motors down by 1.60%, Reliance down by 1.22% and Tata Steel down by 1.08% were the top losers on the Sensex.

Mean while, opening up about 5 million tonnes production of iron-ore a year again, the Supreme Court has lifted the ban on iron ore mining from 18 Category ‘A’ mines in Karnataka, the country's second-largest supplier, after a suspension of over a year on environment concerns. However, the court has permitted mining subject to statutory compliance, as the legal clearances in respect of some A category mines would be coming to an end in October.

Citing environmental violations, the apex court in 2011, banned iron ore mining in Bellary, Chitradurga and Tumkur districts of Karnataka and asked a federal government body to carry out an environmental impact assessment.

In an attempt to boost iron-ore production, the apex court allowed 18 mines to resume iron ore mining in Karnataka, as clamp down on illegal mining combined the nation's capital desire to keep supplies for domestic steel mills, had began to eat into the iron-ore production.

Asia’s third largest economy used to produce about 200 million tonnes a year of iron ore, with exactly half of that being exported. However, the potential increase in output from Karnataka is unlikely to affect flagging global iron ore prices unless the state allows exporters to ship the raw material overseas. Furthermore, the order is unlikely to mean further exports as the steel making ingredient is deficit domestically and with 30 percent export tax and excessive freight rates, not making shipments a feasible option. However, the output from the re-started mines will be in addition to state-run NMDC's 1 million tonnes per month, which was permitted by the Supreme Court for production from August 6, 2011.

The S&P CNX Nifty is currently trading at 5248.10, down by 10.40 points or 0.20% after trading in a range of 5,295.80 and 5243.15. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Bajaj-Auto up by 4.80%, Ranbaxy up by 2.27%, Cipla up by 1.65%, Hero Motocorp up by 1.50% and BHEL up by 1.76%. On the flip side, Jindal Steel down by 1.75%, Ambuja Cements down by 1.73%, Tata Motors down by 1.26%, Siemens down by 1.18% and Gail India down by 1.11%, were the major losers on the index.

Most of the Asian indices were trading in green; Hang Seng index added 0.31%, Shanghai Composite up by 0.56%, Jakarta Composite advanced 0.86%, Kospi Composite Index rose 0.40%, Taiwan Weighted gained 0.72% and KLSE Composite jumped by 0.48%, while Straits Times declined 0.09% and Nikkei 225 slid 0.63% were only losers.

European markets have now turned green; CAC 40 added 0.80%, DAX rose 0.22% and FTSE 100 added 0.47%.