Domestic bourses trade flat ahead of RBI’s policy review

Indian benchmarks have made a muted start ahead of the Reserve Bank of India’s (RBI) credit policy which is to be announced later in the day today. The central bank faces growing pressure to cut interest rates later in the day post the government’s move to initiate stalled reforms and rein in fiscal deficit. However, the persistence of high inflation may weigh against any decision to cut rates. Meanwhile, the global cues remained supportive as Asian markets were trading mostly in the green terrain. Japanese market was trading higher on hopes of more stimulus, as the country’s industrial production fell more than forecast. The Trade Ministry reported that output declined 4.1 percent in September from the previous month. Though, the US markets remained closed on Monday and will remain closed on Tuesday as well in a safety precaution of Hurricane Sandy, which may become the worst to hit the US Northeast in 100 years.

Back home, the bourses were getting some support from buying by funds in rate sensitive banking and realty stocks on hopes of a rate cut by the RBI in its policy review later today. Meanwhile, some support also came in from drug maker Dr Reddy’s which surged about a percent ahead of its quarterly earnings today. However, BHEL continues to face the heat of selling pressure consecutively for the second day after reporting disappointing second quarter numbers. The company registered a fall of 9.74% in its net profit at Rs 1274.45 crore for the quarter ended September 30, 2012 as compared to Rs 1412.03 crore for the same quarter in the previous year.

On the sectoral front, technology witnessed the maximum gain in trade followed by software and banking while, consumer durables, oil and gas and auto remained the top losers on the BSE sectoral space. The broader indices too were trading marginally in the green while, the market breadth on the BSE was positive; there were 920 shares on the gaining side against 624 shares on the losing side while 80 shares remain unchanged.

The BSE Sensex opened at 18,642.01; about 7 points higher compared to its previous closing of 18,635.82, and has touched a high and a low of 18,666.23 and 18,614.67 respectively.

The index is currently trading at 18,654.70, up by 18.88 points or 0.10%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a positive start with 56.65% stocks advancing against 38.42% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices rose 0.32% and 0.26% respectively.

The top gaining sectoral indices on the BSE were, TECk up by 0.65%, IT up by 0.62%, Bankex up by 0.60%, Realty up by 0.60% and Healthcare up by 0.12%. While, CD down by 0.43%, Oil and Gas down by 0.31%, Auto down by 0.24%, CG down by 0.20% and FMCG down by 0.14% were the top losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 1.02%, ICICI Bank up by 0.98%, Infosys up by 0.89%, Dr Reddy up by 0.82% and SBI up by 0.63%.

On the flip side, Hero MotoCorp was down by 0.98%, Coal India was down by 0.76%, ITC was down by 0.73%, Maruti Suzuki was down by 0.73% and Tata Motors was down by 0.72% were the top losers on the Sensex.

Meanwhile, with an aim to tackle the stringent coal availability, Power Ministry has urged Coal India to allow power plants run by the same promoter to swap coal among the plants. This will permit the companies having projects at multiple locations to transfer or swap allocated domestic coal linkages among its own plants and hence ensures smooth business activity.

The proposal reached to the Coal Ministry for vetting after the approval from the Power Ministry and Central Electricity Authority (CEA), while it was initially put forth by the Association of Power Producers (APP), a group of private power producers. The ministry also confirmed that the risk associated with the swap agreement would be borne by the power producer including less availability of coal for particular plant after coal mix optimization.

The private power producers anticipate that the proposed process will curtail the generation cost by pared freight charges and optimized plant performance. They also claim that the activity ensures that no review of Power Purchase Agreement (PPA) or its tariff is required and no additional obligation is claimed on Coal India.

The S&P CNX Nifty opened at 5,656.35; about 9 points lower compared to its previous closing of 5,665.60, and has touched a high and a low of 5,674.70 and 5,655.90 respectively.

The index is currently trading at 5,671.35, up by 5.75 points or 0.10%. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were JP Associates up by 1.23%, PNB up by 1.15%, Bharti Airtel up by 1.02%, ICICI Bank up by 1.00% and IDFC up by 0.92%.

On the flip side, Hero MotoCorp down by 0.93%, Tata Motors down by 0.84%, Sun Pharma down by 0.73%, ITC down by 0.64% and Cipla down by 0.63%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up by 0.66 points or 0.03% to 2,059.60, Jakarta Composite gained 10.37 points or 0.24% to 4,341.63, KLSE Composite was up by 3.71 points or 0.22% to 1,676.18, Nikkei 225 gained 36.66 points or 0.41% to 8,966.00, Kospi Composite was up by 10.82 points or 0.58% to 1,902.17, Straits Times was up by 5.14 points or 0.17% to 3,034.90 and Taiwan Weighted surged by 92.49 points or 1.30% to 7,183.72.

On the other hand, Hang Seng was the lone loser, down by 32.68 points or 0.15% to 21,478.37.