Sensex, Nifty continues weak trade

Indian equities added losses to continue its weak trade below neutral line in the late afternoon session on account of selling in frontline counters and taking cues from European counterparts. Traders were seen piling some position in Oil & Gas, Auto and Health Care sectors while selling was witnessed in Capital Goods, FMCG and Bankex sectors. Hectic activity was seen in telecom stocks as the empowered group of ministers (EGoM) on Spectrum concluded its meet, Union minister for telecommunication Kapil Sibal announced that the EGoM had proposed the 2G auction price to be 30 percent lower than that decided in November 2012. In the scrip specific movement, Hindustan Motors is locked in upper circuit limit on reports that the company is mulling restructuring. Oil marketing companies Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) extended its previous rally on hopes of hike in diesel price by Re 1 per month. Maruti Suzuki India is trading in green after the foreign brokerage firm CLSA in its report stated that the earnings outlook of the company is finally improving and upgraded the stock to buy. On the global front, Asian markets were trading in red barring Shanghai Composite and KLSE Composite while the European markets were too trading on pessimistic note.

Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,050 and 19,800 levels respectively. The market breadth on BSE was negative in the ratio of 1661:1147 while 128 scrips remain unchanged.

The BSE Sensex is currently trading at 19,762.39, down by 21.69 points or 0.11% after trading in a range of 19,856.43 and 19,741.69. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.63% and 0.89% respectively.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 0.77%, Auto up by 0.72%, Health Care up by 0.71%, Metal up by 0.65% and TECk up by 0.48%, while, Capital Goods down by 1.06%, FMCG down by 0.47%, Bankex down 0.32% and Power down by 0.07% were the only losers on the index.

The top gainers on the Sensex were Maruti Suzuki India up by 3.07%, Cipla up by 2.57%, Hindalco Industries were up 1.81% ONGC were up by 1.42% and M&M up by 1.35%. 

On the flip side, L&T down by 1.82%, HDFC was down by 1.54%, HDFC Bank was down by 1.26%, HUL down by 1.11% and Coal India was down by 0.69% were the top losers on the Sensex.

Meanwhile, planning commission member B K Chaturvedi headed meeting to oversee the massive debt restructuring scheme for ailing electricity distribution companies is scheduled on January 9. Representatives from Power and Finance Ministries as well as from some distribution companies among others will participate in the first meeting of a central panel for discussing concerns over power sector woes.

Measures mooted in debt restructuring scheme include significant tariff hikes and conversion of 50 per cent of their short-term debt into bonds backed by respective states, while one of the key proposals in the scheme is to ensure regular rationalization of tariff to cover cost of services. Low tariff is a major factor hurting the financials of discoms.

The accumulated losses of electricity distribution companies are estimated to be whopping Rs 2.46 lakh crore as on March 2012 and it was pegged at around Rs 1.9 lakh crore till March 2011.

Meanwhile, power ministry said that ‘the restructuring/re-scheduling of loan is to be accompanied by concrete and measurable action by the discoms/states to improve the operational performance of the distribution utilities.’ The Power Ministry had notified the financial restructuring scheme for state-owned discoms on October 5.

However, in the last 15 months, minimum 18 states have announced significant tariff increases during the period, with Tamil Nadu proposing as much as 37 per cent hike to improve the financial health of electricity distributing companies. The uncertain financial health of discoms has also raised concerns of loan defaults in the financial system. 

The S&P CNX Nifty is currently trading at 6,008.55, down by 7.60 points or 0.13% after trading in a range of 6,042.15 and 6,001.35. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were BPCL up by 4.10%, Maruti Suzuki up by 3.37%, Cipla up by 2.58%, Cairn India up by 2.03% and Hindalco Industries up by 1.81%.

On the flip side, L&T down by 1.83%, HDFC down by 1.58%, HUL down by 1.40%, HDFC Bank down by 1.25% and JP Associates down by 1.19% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng was trading flat with negative bias down by 0.01%, Nikkei 225 was trading lower by 0.83%, Straits Times edged lower by 0.08%, KOSPI Composite lost 0.03%, Taiwan Weighted declined by 0.65% and Jakarta Composite slips 0.37%. On the flip side, Shanghai Composite advanced 0.37% and KLSE Composite gained 0.02%. 

The European markets were trading in red with, France’s CAC 40 lost 0.17%, Germany’s DAX descended 0.23% while the United Kingdom’s FTSE 100 dropped 0.21%.