Benchmarks trim substantial portion of losses; Sensex enters into green territory

Shaving entire losses, benchmark 30-share index, Sensex, has jumped into green albeit with slim gains, with a positive opening of European markets too aiding markets in recovering the lost ground in the highly volatile session of trade. In the see-saw session of trade, although, Sensex, jumping in green is trading comfortably past the crucial 20,000 level, 50-share index, Nifty, trading with marginal loss, is oscillating above its psychological 6,050 level. Meanwhile, broader indices too gaining traction are outperforming the larger peers. Support which has emerged at lower levels is mainly arresting the selling pressure at D-street. Meanwhile, European shares rose on Tuesday, rebounding after a two-day drop are trading in green with investors in Britain catching up with the previous day's gains after returning from a long weekend, and with comments by a top European Central Bank official improving sentiment.

Closer home, much of the support was rendered by stocks belonging to Public Sector Undertaking (PSU), Power and Realty counters. Led by gains of BHEL and GAIL, PSU counter is witnessing strong demand. However, the downtrend of Auto, Bankex and Health Care counter is limiting the further upside of the bourses. The overall market breadth on BSE is in favour of declines, which have thumped advances in the ratio of 1035:1026: while 150 shares remain unchanged.

The BSE Sensex is currently trading at 20,032.13, up by 1.36 points or 0.01% after trading in a range of 20,139.28 and 19,963.23. There were 14 stocks advancing against 16 declines on the index.

The broader indices too enticed some traction; the BSE Mid cap and Small cap index were trading higher by 0.42% and 0.39% respectively.

The top gaining sectoral indices on the BSE were, PSU up by 1.21%, Power up by 1.17%, Realty up by 0.83%, Oil & Gas up by 0.74%, and Metal up by 0.46%, while Auto down 0.33%, Bankex down 0.26%, Health Care down 0.25%, IT down by 0.08% and Capital Goods down by 0.25% were the top losers on the sectoral index.

The top gainers on the Sensex were Coal India up by 3.51%, Gail India up by 2.09%, BHEL up by 1.88%, Bharti Airtel up by 1.78% and NTPC up by 1.64%. On the flip side, Sun Pharma down by 1.66%, Sterlite Industries down by 1.56%, Mahindra & Mahindra down by 1.51%, HDFC was down by 1.35% and L&T down by 1.11% were the top losers on the Sensex.

Meanwhile, to re-allocate coal bed methane (CBM) blocks with substantial coal deposits to power producers, the coal ministry has asked the Ministry of Petroleum and Natural Gas to hand over the relinquished CBM blocks that were earlier allocated for exploring gas. As per the coal ministry, these CBM blocks have been relinquished because of inadequate gas reserves but have potential coal reserves, which can be mined and used for electricity generation.

The government is targeting to facilitate captive coal blocks to power producers to meet their fuel requirement. Both the Ministries have already discussed the issue. As per the Petroleum and Natural Gas Ministry, which has allocated blocks for CBM exploration through competitive bidding, 33 contracts were signed and it is not immediately known how many of these have been relinquished by the contractors.

Meanwhile, at present, the coal ministry is not willing to go for simultaneous mining of exploring gas and coal in these blocks due to the regulatory hurdles, which would further delay the process. So the coal ministry can directly allocate the relinquished blocks to power companies.   

CBM is a form of natural gas drilled from virgin coal beds. It is expected that total CBM production will go up to 7.4 mmscmd by the year 2013-14 from a current level of a total CBM production of 0.15 mmscmd in the country.

The CNX Nifty is currently trading at 6,078.15, down by 5.00 points or 0.08% after trading in a range of 6,111.35 and 6,055.40. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Coal India up by 3.31%, JP Associate up by 3.04%, GAIL up by 2.42%, Hero MotoCorp up by 2.09% and BHEL up by 1.90%. On the flip side, UltraTech Cement down by 2.07%, Sesa Goa down by 1.65%, M&M down by 1.57%, HDFC down by 1.54% and Sun Pharma down by 1.45% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose  1.12%, Hang Seng increased 0.44%, Jakarta Composite surged 1.90%, KLSE Composite added 0.54%, Nikkei 225 soared 1.20%, Straits Times jumped 0.26% and KOSPI Composite was up by 0.32%. On the flip side, Taiwan Weighted down by 0.21% was the lone loser.

Most of the European markets got to a positive start with, France’s CAC 40 up by 1.27%, Germany’s DAX up by 0.81% and the United Kingdom’s FTSE 100 up by 1.16%.