Weak trade continues on street; CD, Realty and Bankex drags

Indian equities trimmed losses but continued its weak trade in the late afternoon session on back of selling in frontline counters. The sentiments in the market got a hit with the outcome of Second Quarter Review of Monetary Policy 2012-13, where world’s most aggressive central bank, extending its battle against inflation left key policy rates unchanged thereby hurting interest rate sensitive stocks. Besides, the PSU banks were worst hit as the RBI increased the amount of provisioning against restructured loans to 2.75% from 2%, effective immediately, as part of its monetary policy review. Traders were seen piling some position in IT and TECk sector while selling was witnessed in Consumer Durables (CD), Realty and Bankex sector. In the scrip specific development, crisis hit Kingfisher Airlines was trading firm in weak market as Chairperson Vijay Mallya met Civil Aviation Secretary KN Srivastav to brief him about the airline’s revival plans. ONGC is trading under pressure as foreign brokerage house Credit Suisse downgraded the company to underperform from neutral and lowered its target price on earning concerns. SKS Microfinance is locked in lower circuit limit on reporting loss of Rs 262.16 crore in Q2 and on being slapped with Rs 34 crore service tax notice.

On the global front, Asian markets were trading in green barring Hang Seng and Nikkei 225, while the European markets were trading on optimistic note. The European Central Bank President Mario Draghi stated that he fully backed German Finance Minister Wolfgang Schaeuble’s proposal for giving the EU Commissioner for Economic and Monetary Affairs a direct say in national budgets. Besides, Spain agreed to set up Asset Management Company that will take over risky assets from banks and the new company will be in place on December 1. The agreement paves the way for banks to receive a loan of up to €100 billion to recapitalize its banks. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,650 and 18,500 levels respectively. The market breadth on BSE was negative in the ratio of 861:1752 while 114 scrips remain unchanged.

The BSE Sensex is currently trading at 18,490.48, down by 145.34 points or 0.78% after trading in a range of 18,718.28 and 18,426.46. There were 8 stocks advancing against 22 declines on the index.

The broader indices continue to witness profit-booking; the BSE Mid cap and Small cap indices were trading lower by 0.97% and 0.92% respectively.

The top gainers on the BSE sectoral space were, IT up by 0.73% and TECk up by 0.47%, while, Consumer Durables down by 2.10%, Realty down by 1.93%, Bankex down by 1.88%, Capital Goods down by 1.70% and Auto down by 1.46% were the top losers on sectoral space.

The top gainers on the Sensex were Dr Reddy’s Lab up by 1.58%, Hindustan Unilever up by 1.43%, Infosys up by 1.05%, Wipro up by 0.86% and TCS up by 0.72%. On the other hand, SBI down by 3.64%, Tata Motors down by 3.39%, Jindal Steel down by 2.67%, Hero MotoCorp down by 2.46% and L&T down by 2.31% were the top losers on the Sensex.   

Meanwhile, to decide on fixing reserve prices for 54 coal mines, which are to be allocated through competitive bidding route, the Ministries of Power and Steel has approached CRISIL for suggestions. Ministers are likely to approach the coal ministry with their final draft by end of the month, after holding meetings with CRISIL. A linkage to international prices while considering valuation of coal reserves was proposed by the government appointed panel, which was in charge of preparing draft proposal on coal mine allocation.

CRISIL had urged government to provide discount for mines allocated to power sector and other public sector companies reasoning that if not done so will lead to increase in electricity tariff. The centre had affirmed that it would begin the process of allocating coal blocks through competitive bidding route by the year-end. While the Ministry of Coal has identified about 54 new coal blocks for auction to the bidders for captive use in different sectors, nearly 16 is for power, 12 for steel and 12 for government firms in other sectors.

CRISIL has been directed to provide the ratings, research, and risk and policy advisory services while preparing the methodology as its been identified as the lowest financial bidder for the Coal Ministry's contract. The Comptroller and Auditor General had come up with the report that private allottees might have the financial impact on their benefits by about Rs 1.86 lakh crore, on 57 coal block allocation.

The S&P CNX Nifty is currently trading at 5,612.30, down by 53.30 points or 0.94% after trading in a range of 5,689.90 and 5,592.70. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were Dr. Reddy’s Lab up by 2.16%, HUL up by 1.36%, Infosys up by 1.06%, Wipro up by 0.96% and BHEL up by 0.88%. While, Bank of Baroda down by 4.99%, SBI down by 3.65%, Tata Motors down by 3.60%, JP Associates down by 3.57% and PNB down by 3.34% were the top losers on the index.

Asian equity indices were trading mostly in the green; Taiwan Weighted surged 1.28%, Kospi Composite added 0.43%, Shanghai Composite rose 0.17%, Jakarta Composite advanced  0.30%, Straits Times rose 0.14% and KLSE Composite gained 0.06% while Hang Seng down by 0.38% and Nikkei 225 lower by 0.98% were the only losers amongst Asian pack.

The European markets were trading in green with, France’s CAC 40 added 0.79%, Germany’s DAX ascended 1.05% and the United Kingdom’s FTSE 100 gained 0.78%.