Benchmarks recover from intra-day’s low; gloomy trend prevail

Following dip to intra-day’s low level and subsequent recovery, benchmark equity indices continue to trade down beat tracing weaker Asian shares, also as investors remain cautious ahead of corporate earnings season for the last quarter of 2012 and the European Central Bank's policy meeting later in the week. Further, plunge of Consumer Durable, Metal and Capital Goods counters too are adding to the selling pressure. Oil companies have succumbed to profit-taking after a recent rally, Hindustan Petroleum Corp lost 1.5 percent after adding 13.54 percent in previous four sessions while Bharat Petroleum Corp too was trading lower with cut of half a percent. Oscillating near intra-day’s low, benchmark 30 share index, Sensex, is trading sub 19650 level, while 50 share index, Nifty, too is trading above 5950 bastion, with loss of over quarter percent. Meanwhile, broader indices too have lost some additional ground.

On the global front, Asian shares too were under pressure as investor maintained caution ahead of corporate earnings season for the last quarter of 2012. Meanwhile, US earnings season unofficially will kick off when aluminum maker Alcoa reports its results after Tuesday's market close.

Closer home, select buying in stocks from defensive Fast Moving Consumer Goods and HealthCare combined with rate sensitive Auto counters, are restricting the downside of the bourses. Meanwhile, Sugar stocks were showing mixed trend after reports suggested of government likely raising the levy price of sugar - the rate at which it buys the sweetener from mills to sell through ration shops - by over Rs 2 to about Rs 22 per kg for the current year. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1471:1106, while 132 shares remained unchanged.

The BSE Sensex is currently trading at 19648.16, down by 43.26 points or 0.22% after trading in a range of 19710.74 and 19632.59. There were 12 stocks advancing against 18 declines on the index.

The broader indices too lost additional ground; the BSE Mid cap and Small cap index were down by 0.44% and 0.56% respectively.

The top gaining sectoral indices on the BSE were, FMCG up by 0.78% HealthCare up by 0.73%, and Auto up by 0.10% while, Consumer Durables down by 1.70%, Metal down by 1.60%, Capital Goods down by 1.26%, Realty down by 0.98% and Information Technology down by 0.87% were the top losers on the index.

The top gainers on the Sensex were ITC up by 1.72%, Cipla up by 1.30%, Sun Pharma up by 1.29%, Dr Reddys Lab up by 1.02% and Mahindra & Mahindra up by 1.00%.

On the flip side, Sterlite Inds down by 2.16%, Hindalco down by 2.08%, Infosys down by 1.97%, Tata Steel down by 1.96% and L&T down by 1.75% were the top losers on the Sensex.

Meanwhile, only six coal blocks would be put up for auction against the twelve coal blocks explored so far due to  various reasons like some of them being Coal Bed Methane blocks, among others. The Coal Ministry has identified 54 new coal blocks for auction to the bidders for captive use in different sectors including 16 for power and 12 for steel. In last month, government started the process of allotting coal mines and invited proposals from PSUs for allotting 17 blocks to them, mostly for captive power plants.

Following CAG report terming potential losses of Rs 1.86 lakh crore to the exchequer on account of blocks allotment to 57 private firms without auction, government has decided to make transparent coal mines allotment.

Earlier, Coal Secretary S K Srivastava had said that out of the 54 coal mines identified to be allocated through auction and government dispensation route, only 12 have been explored so far. While, Srivastava, refused to give a timeframe for conducting auction of these blocks and stated that there were issues which have long-term implications and needs more and more consultations.

Meanwhile, the environment ministry has turned down the coal ministry's request for grant of 'in-principle' clearances to mines identified for auction. According to the environmental ministry, in-principle environment and forest clearances to mines, which are to be auctioned, cannot be accorded to the environmental ministry guidelines and thus it is legally not enforceable.

Further, coal secretary Srivastava said that the government had advised CRISIL to consult ministry of environmental and forest (MoEF) for in-principal clearance to mines and consult the planning commission regarding pricing issue. CRISIL had in October submitted a draft report on methodology for fixing floor and reserve price of coal blocks to be auctioned. 

The S&P CNX Nifty is currently trading at 5,967.55, down by 20.85 points or 0.35% after trading in a range of 5,990.65 and 5,964.40. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were ITC up by 1.59%, Dr Reddys Lab up by 1.18%, Cipla up by 1.21%, Sun Pharma up by 1.38% and HCL Tech up by 1.07%.

On the flip side, IDFC down by 2.39%, Sesa Goa down by  2.15%, Hindalco down by 2.12%, Tata Steel down by 2.11% and Axis Bank down by 1.97%, were the major losers on the index.

Most Asian equity indices were trading lower; Shanghai Composite down by 0.75%, Hang Seng dropped 0.94%, KLSE Composite slipped 0.34%, Nikkei 225 was down by 0.86%, Straits Times declined 0.47%, KOSPI Composite contracted 0.66% and Taiwan Weighted was down by 0.43%. On the flip side, Jakarta Composite up by 0.05% was the lone gainer amongst Asian pack.