Domestic bourses drift lower in early trade

Indian benchmarks have edged lower in the early trade on Monday as investors remained on the sidelines awaiting the quarterly earnings from index bellwether Reliance Industries (RIL) and banking major Axis Bank. Traders are also waiting for September inflation data to be released later in the day as it is one of the major deciding factors for RBI’s upcoming policy stance. Economists are expecting the inflation to have accelerated slightly after the government increased the diesel prices. Meanwhile, it has been reported that foreign institutional investors (FIIs) poured over Rs 10,000 crore into the stock market so far in the month of October.

On the global front, the US markets made a mixed closing on Friday, though the consumer sentiments improved to their best in last five years but traders remain concerned about the growth outlook and the earnings season. While, most of the Asian equity indices were trading in the red at this point of time on growth concerns ahead of the third-quarter corporate earnings season, lifting the safe-haven dollar which in turn undermined commodities. Back home, shares of cement manufacturer rallied on the bourses on reports that the Competition Appellate Tribunal (COMPAT) has asked the fair trade regulator Competition Commission of India (CCI) to give fresh copies of its order levying over Rs 6,300 crore in penalties on 11 cement companies in June this year for cartelisation, providing them with complete details on production, pricing and sales.

On the sectoral front, realty witnessed the maximum gain in trade followed by oil and gas and healthcare while, banking, capital goods and auto remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 1,012 shares on the gaining side against 671 shares on the losing side while 84 shares remain unchanged.

The BSE Sensex opened at 18,690.99; about 15 points higher compared to its previous closing of 18,675.18, and has touched a low of 18,600.66 while, high remained its opening.

The index is currently trading at 18,629.91, down by 45.27 points or 0.24%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has made a positive start with 57.27% stocks advancing against 37.97% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.21% and 0.52% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 0.50%, Oil and Gas up by 0.24%, HC up by 0.24%, Metal up by 0.07% and IT up by 0.05%. While, Bankex down by 0.49%, CG down by 0.40%, Auto down by 0.38%, CD down by 0.31% and PSU down by 0.23% were the top losers on the index.

The top gainers on the Sensex were Dr Reddy up by 0.92%, Jindal Steel up by 0.85%, Hindalco up by 0.64%, Tata Steel up by 0.37% and RIL up by 0.36%.

On the flip side, BHEL was down by 1.37%, Bharti Airtel was down by 1.19%, Maruti Suzuki was down by 0.87%, Tata Motors was down by 0.85% and Coal India was down by 0.72% were the top losers on the Sensex.

Meanwhile, in line with the decision to import coal in order to bridge the supply gap amid stringent availability, the Director-General, Association of Power Producers, Ashok Khurana has sought Coal India (CIL) to pool the price of imported coal with domestic produce, to ensure lifeline to power producers, mainly for those from private sector. While, the board of directors of CIL has strongly opposed the proposal, by reasoning the possible financial risk it has to face, if the existing power sector consumers raise objections against allowing subsidy to newly commissioned generation capacities.

Even though, Khurana has opined that subsidizing the imported coal by taking advantage of the arbitrage opportunity between domestic and imported coal, is inevitable to make the proposition economically viable. He also cautioned that India is likely to face a shortfall of about 200 million tonne of coal by the end of the current Plan period (2012-17).

Malay De, Principal Secretary, West Bengal Power Department, has countered Khurana stating that cross-subsidizing a segment of coal consumers is against the principles of market economy that opened doors to private producers to invest in the power generation sector. He also criticized the private power producers for seeking relaxation during the fixed tariff regime of 25 years.

The S&P CNX Nifty opened at 5,674.25; about 2 points lower compared to its previous closing of 5,676.05, and has touched a high and a low of 5,676.85 and 5,651.05 respectively.

The index is currently trading at 5,659.90, down by 16.15 points or 0.28%. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were JP Associates up by 1.51%, Dr Reddy up by 1.13%, Ambuja Cement up by 1.12%, Jindal Steel up by 0.78% and Power Grid up by 0.63%.

On the flip side, BHEL down by 1.47%, Bharti Airtel down by 1.42%, Tata Motors down by 1.42%, PNB down by 0.93% and Maruti Suzuki down by 0.91%, were the major losers on the index.

Asian equity indices were trading mostly in the red; Shanghai Composite was down by 11.26 points or 0.54% to 2,093.67, Hang Seng declined by 44.98 points or 0.21% to 21,091.44, Jakarta Composite was marginally down by 3.00 points or 0.08% to 4,307.96, KLSE Composite declined by 2.66 points or 0.16% to 1,650.90, Kospi Composite was lower by 6.23 points or 0.32% to 1,927.28 and Taiwan Weighted declined by 35.59 points or 0.47% to 7,402.36.

On the other hand, Nikkei 225 was marginally up by 1.56 points or 0.02% to 8,535.68 and Straits Times was up by 0.78 points or 0.03% to 3,042.53.