Sensex, Nifty continue to trade in red

Indian equities after slipping in the red from a modest positive start, continued to trade below yesterday's closing, in late morning session as profit booking emerged at higher levels after the recent rally. The trade is likely to turn choppy as the session progresses ahead of April series F&O expiry. Investors remained cautious ahead of the central bank's annual policy on May 3 where it is widely expected to cut rates by at least 25 basis points. On the global front, Asian equity indices were trading in red at this point of time with the latest figures from China adding to the growing concerns about the world’s number two economy. The flash HSBC Purchasing Managers’ Index for April fell to 50.5 in April from 51.6 in March but was still stronger than February’s reading of 50.4.

Back home, the traders were seen piling up positions in Metal, IT and Teck, while selling was seen in Bankex, Capital Goods and Auto sector. In scrip specific actions, Jet Airways soared as the company prepares for the Etihad deal and increased flights via Abu Dhabi. Cairn India slumped despite on reporting 17% rise in Q4 consolidated net profit. HDFC Bank dropped ahead of its results today. Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 5,800 and 19,100 levels respectively.

The market breadth on BSE was showing positive trend with advances to declines in ratio of 933: 671.

The BSE Sensex is currently trading at 19124.39, down by 45.44 points or 0.24% after trading in a range of 19210.26 and 19100.63. There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14% and Small cap index was up by 0.56%.

The top gaining sectoral indices on the BSE were, Metal up by 0.82%, IT up by 0.67%, Teck up by 0.47%, Power up by 0.23% and Oil & Gas up by 0.22% and while, Bankex down by 1.09%, Capital Goods down by 0.93%, Auto down by 0.36%, FMCG down by 0.36% and Realty down by 0.21%, were the losers on the BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.45%, Hindalco Industries up by 1.36%, Hero MotoCorp up by 1.30%  ,Sterlite Industries up by 1.01%, and Tata Steel up by 0.95%.

On the flip side, Tata Motors was down by 2.05%, L&T was down by 1.68%, SBI was down by 1.37%, ICICI Bank was down by 1.09% and  Bharti Airtel was down by 1.05% were the top losers on the Sensex.

Meanwhile, failing to level out inter-ministerial differences, the Government on April 22 turned down the proposal of coal price pooling by which prices of domestic and imported coal are averaged to make the fuel affordable to new power plants. The proposal was being opposed for various reasons by older power plants and domestic coal producers. The Cabinet Committee on Economic Affairs (CCEA) has passed the decision on the coal-price pooling mechanism to a group of ministers (GoM) panel scheduled to be held this week headed by either Finance minister P Chidambaram or Agriculture minister Sharad Pawar.

Private power producers favored the proposal to get a uniform fuel price to remove the disadvantage that new power projects faced as compared to older ones. As per the Cabinet Committee on Economic Affairs (CCEA) meeting, the power projects commissioned before 2009 will continue to get coal at pre-fixed (below market) rates. While, the new projects, commissioned after 2009 largely have a cost-plus mechanism for calculation of electricity tariff and so any higher imported cost of coal will be passed through to the consumers. This may lead to increase in electricity tariffs if the generation companies pass the rise in cost to the consumers.

However, the decision has been pending for a long time because of the conflict between the coal and power ministries on how the impact of higher imported coal prices will be shared between state miner Coal India (CIL) and power companies.  Earlier, in February, CCEA had given its in-principle approval for coal price pooling and had asked coal and power ministries to work out a formula. Various thermal power plants in the country have been stranded due to scarcity of coal and the decision on coal price pooling will help these plants. 

The CNX Nifty is currently trading at 5,816.50 down by 17.90 points or 0.31% after trading in a range of 5,843.35 and 5,808.90. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were JP Associate up by 3.90%, Sesa Goa up by 1.51%, Bajaj-Auto up by 1.50%, Hindalco up by 1.47%, and Hero Moto Co up by 1.05%.

On the flip side, IndusInd Bank down by 2.34%, Tata Motors down by 2.05%, IDFC down by 1.76%, Ambuja Cement down by 1.65% and Cairn down by 1.64%, were the major losers on the index.

All the Asian equity indices were trading in red; Shanghai Composite tumbled 49.58 points or 2.21% to 2,192.59, Hang Seng declined 236.08 points or 1.07% to 21,808.29, Jakarta Composite slipped 12.86 points or 0.26% to 4,984.07, KLSE Composite contracted 6.33 points or 0.37% to 1,700.35, Nikkei 225 dipped 31.44 points or 0.23% to 13,536.93 Straits Times decreased 15.69 points or 0.47% to 3,293.23, KOSPI Composite dropped 12.19 points or 0.63% to 1,914.12 and Taiwan Weighted was down by 41.29 points or 0.52% to 7,924.09.