Benchmarks make decent recovery after a negative start

Key domestic benchmarks have made a decent recovery to trade flat after starting off in red amid weak global cues. The US markets ended lower on Wednesday, reversing almost all their previous session’s gains on worries about the outlook for the Federal Reserve’s stimulus program. While, most of the Asian equity indices were trading in red with Japanese Nikkei tumbling over three percent to breach 14,000 level, dragged lower by the dollar’s decline to its lowest since May 10 against the yen which weighed on exporters.

Back home, investors remained on the sidelines as it been an F&O May series expiry day. Meanwhile, some concern related to economy too dampened the sentiments as the Organization for Economic Cooperation and Development (OECD) has said that the combined gross domestic product of the OECD’s 34 members will grow by 1.2% this year, rather than the 1.4% rate forecast in November. For India it has slashed its growth forecast to 5.3% in 2013 as against its earlier forecast of 5.9%. However, the markets made some decent recovery soon after the start as some buying was witnessed in power sector stocks as a group of ministers (GoM) has approved setting up of coal regulator that could potentially benefit the power companies that have been strained by the scarcity and poor quality of coal supplied to them. Additionally, public sector oil marketing companies viz. BPCL, HPCL and IOC edged higher on buzz of price hike due to sharp depreciation in rupee. 

On the sectoral front, auto witnessed the maximum gain in trade followed by healthcare and fast moving consumer goods while, realty, consumer durables and oil and gas remained the top losers on the BSE sectoral space. The broader indices too were trading flat while, the market breadth on the BSE was negative; there were 563 shares on the gaining side against 683 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex opened at 20,066.94; about 80 points lower compared to its previous closing of 20,147.64, and has touched a high and a low of 20,156.02 and 20,066.14 respectively.

The index is currently trading at 20,152.83, up by 5.19 points or 0.03%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a weak start with 43.01% stocks advancing against 52.18% declines. The broader indices were trading mixed; the BSE Mid cap indices up by 0.06% and Small cap indices down 0.11%. 

The top gaining sectoral indices on the BSE were, Auto up by 1.68%, Health Care up by 0.39%, FMCG up by 0.34%, Capital Goods up by 0.04% and Metal up by 0.02% while, Realty down by 1.55%, Consumer Durables down by 0.79%, Oil & Gas down by 0.73%, Bankex down by 0.37% and PSU down by 0.25% were the only losers on the sectoral index.

The top gainers on the Sensex were Tata Motors up by 3.60%, Mahindra & Mahindra up by 2.55%, Sun Pharma up by 0.93%, Tata Power up by 0.83% and ITC up by 0.66%.

On the flip side, ICICI Bank was down by 1.90%, Cipla was down by 1.82%, ONGC was down by 1.69%, Bharti Airtel was down by 1.45% and Infosys was down by 0.62% were the top losers on the Sensex.

Meanwhile, to increase domestic production of coal, the government is examining two-three models, suggested by Planning Commission and the Finance Ministry on having public-private-partnership (PPP) model in the coal sector. Coal Secretary S K Srivastava said that ministry has already convened 2-3 meetings on it and is trying to see as to how it can involve the private sector along with Coal India for improving the coal production in the country.

Earlier in March, the government had set up a nine-member committee under the chairmanship of Coal Secretary to devise a policy framework under PPP or increasing domestic coal production. The panel constituted members from various ministries including Law, Labour and Finance among others. 

Earlier, Finance Minster, in his Budget speech had stated the need to devise a PPP policy framework to reduce the country’s increasing dependence on imported coal in the medium to long-term. India imported around 135 million tonnes of thermal and coking coal in FY13, up around 28% from a year earlier, as domestic supply fell short of surging demand in Asia's third-largest economy.

Last fiscal, Coal India (CIL) which accounts for over 80 per cent of the domestic coal output, missed its production target of 464.1 million tonnes by 11.9 million tonnes. In India, coal is the main source for power production and the coal supply in country has failed to keep pace with the requirement of the domestic power sector.

The CNX Nifty opened at 6,072.15; about 32 points lower as compared to its previous closing of 6,104.30, and has touched a high and a low of 6,102.80 and 6,072.15 respectively.

The index is currently trading at 6,100.10, down by 4.20 points or 0.07%. There were 24 stocks advancing against 25 declines, while one stock remains unchanged on the index.

The top gainers of the Nifty were Tata Motors up by 3.54%, M&M up by 2.25%, NMDC up by 2.14%, Ranbaxy up by 1.27% and Sun Pharmaceuticals up by 0.95%.

On the flip side, Cipla down by 2.15%, ONGC down by 2.03%, JP Associate down by 2.02%, ICICI Bank down by 1.81% and Bharti Airtel down by 1.60%, were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dipped 6.78 points or 0.29% to 2,317.23, Hang Seng declined 110.37 points or 0.49% to 22,444.56, Jakarta Composite tumbled 58.46 points or 1.12% to 5,142.23, KLSE Composite contracted 7.59 points or 0.43% to 1,775.88, Nikkei 225 crumbled 467.89 points or 3.27% to 13,858.57, Straits Times dropped 47.08 points or 1.40% to 3,320.39 and Taiwan Weighted was down by 79.09 points or 0.95% to 8,258.81.

On the flip side, KOSPI Composite was up by 3.76 points or 0.19% to 2,004.96.