Markets slip into red zone again despite stronger Oct IIP numbers

Following a positive start and a subsequent retreat, Indian equity markets are trading lower despite a stronger than expected industrial production (IIP) data for October. India's annual industrial output growth measured by index of IIP, expanded by robust 8.2% at 171.3 for the month of October 2012 against contraction of 0.4% in the previous month. Back on street, the Sensex declined by 0.78 points, while Nifty was down by 7.45 points. In currency markets, Indian rupee moved higher against dollar in the late morning session amid increased capital inflows from Bharti Infratel IPO and expected dollar sale by state miner NDMC. On sectoral front, Information technology and automobile stocks were trading firm. Select consumer durables, healthcare and realty stocks too were trading higher. Realty, bank, metal, power and FMCG stocks were mostly subdued. In global markets, most Asian markets were trading higher on Wednesday, on the back of positive signs from both the US and Europe. Back home, the market breadth was slightly showing negative trend; there were 1224 shares on the gaining side against 1230 shares on the losing side while 103 shares remained unchanged.

The BSE Sensex is currently trading at 19386.36 down by 0.78 points after trading in a range of 19478.79 and 19369.00. There were 13 stocks advancing against 16 declines on the index and one remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15% and Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were, IT up by 1.04%, TECk up by 0.85%, Auto up by 0.77%, Consumer Durables up by 0.41% and Realty up by 0.26%.

On the other hand, PSU down by 0.40%, Power down by 0.32%, Capital Goods down by 0.27%, Metal down by 0.25%, and Bankex down by 0.24% were the top losers on the Sensex.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.05%, Bajaj Auto up by 1.40%, Hero MotoCorp up by 1.31%, Sun Pharma up by 1.20%, and TCS up by 1.10%. On the flip side, Hindustan Unilever was down by 2.06%, HDFC was down by 1.71%, GAIL was down by 1.26%, Jindal Steel was down by 0.97%, and Tata Power was down by 0.93% were the top losers on the Sensex.

Meanwhile, aiming a solution for the issue of pooling prices of domestic and international coal, the official in both the Power Ministry and the Coal Ministry are likely to meet again by next week. The meet is likely to resolve the deadlock over price pooling of coal and enable generation firms to ink fuel supply pacts before month end.

Earlier in October, on the request from Prime Minister's Office (PMO), both Coal India and CEA had started reworking on the coal price pooling mechanism and will be submitting the revised scheme to the Power Ministry for consideration. Price pooling was a mechanism to implement fuel supply agreement (FSA), the approval of then 15 percent supply of imported coal will be not in the cost plus method, but in pooling mechanism.

Coal India’s board had approved the modified FSA without price-pooling with 65 percent domestic coal and 15 percent imported coal at cost plus basis. The Planning Commission had also suggested that Coal India should adopt a pooling formula on prices by combining rates of imported and domestic coal.  

The S&P CNX Nifty is currently trading at 5,891.35, down by 7.45 points or 0.13% after trading in a range of 5,924.60 and 5,889.45. There were 20 stocks advancing against 29 declines on the index and one remained unchanged.

The top gainers of the Nifty were JP Associates up by 1.98%, M&M up by 1.88%, Hero Motocorp up by 1.23%, HCL Tech up by 1.20% and Bajaj Auto up by 1.16%.

On the flip side, Hindustan Unilever down by 2.23%, HDFC down by 1.85%, GAIL down by 1.45%, Ultratech cement down by 1.40% and Jindal Steel down by 1.30%, were the top losers on the index.

Most of the Asian markets trade in green, Hang Seng gained 0.68%, Jakarta Composite was higher by 0.20%, KLSE Composite was up by 0.32%, Straits Times was up by 0.72%, Seoul Composite was up by 0.45%, Nikkei 225 gained by 0.57% and Taiwan Weighted was trading higher by 1.00%.

On the other hand, Shanghai Composite was down by 0.21% was the only loser in Asian pack.