Weakness persists on dalal street in early noon session

Bears have tightened their grip over Dalal Street in early noon session, tracking lackluster Asian markets. Selling in frontline blue chip stocks such as Tech Mahindra, Bajaj Auto and Indusind Bank restricted the markets to go up. However, broader indices, BSE Mid cap and Small cap are trading in green. On the sectoral front, steel sector companies are trading lower despite Indian Steel Association (ISA) Assistant Secretary General Arnab Hazra statement that the new year will be the year of hope for the Indian steel industry - ‘the breakout year’ for the sector - and stressed that resilience of the industry will stand out. The industry is hoping 2020 will see increased demand for steel, better prices and development of new products. Besides, energy sectors stocks were trading lower by over half a percent at this point of time as Ratings agency ICRA has revised its year-end outlook for India's renewable energy (RE) sector from stable to negative. It pointed out that the sector is facing headwinds because of the long delays in making payments by the state-owned distribution utilities (discoms), delays in projects bid out over the past two years, difficulties in acquiring land for projects, securing transmission connectivity and financing in a timely manner.

On the global front, Asian markets were trading mostly in red, as investors locked in gains made since the US and China reached a preliminary trade deal earlier this month. Back home, In scrip specific development, Coal India shined on planning to ramp up daily output to meet 660 MT production target for FY20 and Chalet Hotels zoomed on extending collaboration with Marriott International Inc.

The BSE Sensex is currently trading at 41383.49, down by 174.51 points or 0.42% after trading in a range of 41349.61 and 41607.49. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.10%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Utilities up by 0.51%, Realty up by 0.34%, Telecom up by 0.27%, Power up by 0.27% and PSU was up by 0.26%, while Auto down by 0.68%, Energy down by 0.59%, Bankex down by 0.40%, Consumer Discretionary down by 0.32% and IT was down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 0.95%, Power Grid Corporation up by 0.66%, Titan Company up by 0.54%, NTPC up by 0.39% and Sun Pharma Industries was up by 0.30%. On the flip side, Tech Mahindra down by 1.66%, Bajaj Auto down by 1.16%, Indusind Bank down by 1.02%, Reliance Industries down by 0.98% and Kotak Mahindra Bank was down by 0.96% were the top losers.

Meanwhile, Ratings agency ICRA has revised its year-end outlook for India's renewable energy (RE) sector from stable to negative. It pointed out that the sector is facing headwinds because of the long delays in making payments by the state-owned distribution utilities (discoms), delays in projects bid out over the past two years, difficulties in acquiring land for projects, securing transmission connectivity and financing in a timely manner.

Given the ongoing challenges, ratings agency expects renewable energy capacity addition to remain at about 8.5-9 GW for FY2020, which is similar to the capacity added in FY2019. It also said the headwinds related to payment delays, uncertainty over resolution of tariff issue for projects in Andhra Pradesh, as well as execution and financing related challenges for under-construction projects have impacted investor sentiments in the sector. It noted that this is reflected from the slowdown in tendering of wind and solar PV projects by 37 percent to 10.6 GW in 9 months CY2019 from 16.7 GW in the corresponding period of previous year. Moreover, it said many of bids called by central nodal agencies remained under-subscribed.

According to the report, the capacity addition in FY2020 will be primarily driven by the solar power segment. However, it said compared to 5.6 percent in FY15, the share of RE based generation in the overall generation mix at all India level is rising, as seen from an increase to 9.2 percent in FY2019. Besides, it said the share of RE is expected to reach closer to 10 percent in FY2020, owing to the large sized capacity addition witnessed in the wind and solar power segments during this period, driven by policy support from the central and state governments as well as the significantly improved tariff competitiveness of wind and solar power vis-a-vis conventional power sources.

The CNX Nifty is currently trading at 12203.10, down by 52.75 points or 0.43% after trading in a range of 12195.05 and 12247.10. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 1.30%, Coal India up by 1.26%, Bharti Infratel up by 1.14%, Axis Bank up by 1.01% and NTPC was up by 0.64%. On the flip side, Tech Mahindra down by 1.83%, Bajaj Auto down by 1.17%, Eicher Motors down by 1.12%, Indusind Bank down by 1.06% and Kotak Mahindra Bank was down by 1.05% were the top losers.

Asian markets are trading mostly in red, Hang Seng decreased 129.64 points or 0.46% to 28,189.75, Taiwan Weighted dropped 44.35 points or 0.37% to 12,009.02 and Shanghai Composite declined 3.34 points or 0.11% to 3,036.68. On the flip side, Straits Times was up by 0.39 points or 0.01% to 3,222.83.