Indian equity add losses; Bankex, Auto drags

Indian equity markets added loss to continue their weak trade in the late afternoon session on account of selling in front line blue chip counters. The mood on the street was unaffected by Reserve Bank of India’s (RBI) hawkish tone whereby it reduced repo rate by 25 basis points from 7.5% to 7.25% with immediate effect, its lowest since May 2011, in order to prod the sputtering economy. C Rangarajan, chairman, PMEAC, welcoming the RBI’s move stated that economic growth is at early stages of recovery and the wholesale price index (WPI) inflation has shown sign of decline. Traders were seen piling position in Metal, Capital Goods and TECK stocks while selling was witnessed in Bankex, Auto and PSU sector stocks. In scrip specific development, Fortis Healthcare was trading in green after Nomura upgraded the company to buy from neutral citing recent underperformance and improvement in return ratios. Gujarat Pipavav was trading in green after the company posted around three-fold jump in its March quarter profit.

On the global front, the Asian markets were trading mixed while the European markets were too trading on mixed note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,000 and 19,700 levels respectively. The market breadth on BSE was negative in the ratio of 937:1249, while 124 scrips remain unchanged.

The BSE Sensex is currently trading at 19,614.64, down by 121.13 points or 0.61% after trading in a range of 19,744.85 and 19,552.55. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading in red; the BSE Mid cap index and Small cap index were trading down by 0.23% and 0.30% respectively.

The top gaining sectoral indices on the BSE were Metal up by 1.49%, Capital Goods up by 0.84%, TECK up by 0.56%, IT up by 0.46% and Health Care up by 0.27% while Bankex down by 1.73%, Auto down by 1.35%, PSU down by 1.27%, Consumer Durables down by 0.92% and Realty down by 0.78% remained the top losers on the sectoral space.

The top gainers on the Sensex were Jindal Steel up by 3.70%, Tata Steel up by 2.15%, Hindalco Industries up by 1.93%, Sun Pharma up by 1.89% and Sterlite Industries up by 1.73%. On the flip side, Tata Motors down by 3.12%, SBI down by 2.97%, Gail India down by 2.77%, ICICI Bank down by 2.72% and Bajaj Auto down by 2.69% were the top losers on the Sensex.

Meanwhile, after turning down the proposal of coal price pooling of domestic and imported coal, which would have made the fuel reasonably priced to new power plants, the government is now planning to pool coal supplies and pass higher import costs on to tariff. As per the Planning Commission Deputy Chairman Montek Singh Ahluwalia, the imported coal is more expensive than domestic coal, so the higher cost of imported coal will passed on in the tariff.

By adding further, Ahluwalia said that it would be some kind of average price as the available domestic coal, which is priced lower, will be distributed among different people and the balance (shortfall) will have to be made up through imports.  Last month, the Cabinet Committee on Economic Affairs (CCEA) had turned down the proposal of coal pricing pooling owing to sharp opposition to the scheme. The proposal was being opposed for various reasons by older power plants and domestic coal producers as the proposal will remove the advantage that old power projects enjoyed as compared to newer ones.

As per the 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. 

The CNX Nifty is currently trading at 5,955.30, down by 44.05 points or 0.73% after trading in a range of 6,000.30 and 5,930.15. There were 15 stocks advancing against 35 declines on the index.

The top gainers of the Nifty were Jindal Steel up by 3.65%, HCL Tech up by 2.20%, Tata Steel up by 2.20%, Sesa Goa up by 1.87% and Sun Pharma up by 1.84%. On the flip side, Tata Motors down by 3.55%, SBI down by 3.13%, BPCL down by 3.09%, Gail India down by 2.94% and ICICI Bank down by 2.78% were the major losers on the index.

The Asian equity indices were trading on a mixed note; Shanghai Composite surged 1.44%, Hang Seng rose 0.10%, KOSPI Composite increased 0.43% and Taiwan Weighted was up by 0.08%.

On the flip side, Jakarta Composite declined 1.33%, KLSE Composite dropped 1.10% and Straits Times was down by 0.91%. Japanese Nikkei remained shut for the trade today.

The European markets were trading on a mixed note; France’s CAC 40 lost 0.07%, Germany’s DAX gained 0.02% and United Kingdom’s FTSE 100 edged higher by 0.05%.