Markets continue cautious trade; realty major laggard

Following a lower opening on weak global cues, the Indian equity markets were trading flat in the late morning session on Thursday. Investors remained cautious ahead of release of GDP data for the January-March 2013 quarter. The Sensex was up 0.26 points, while the Nifty was down 6 points. In currency market, rupee recovered from 10-month’s low and appreciated against greenback on the back of euro’s gains against the American currency overseas, after a report showed business confidence in Germany unexpectedly rose for the first time in three months in May. On the sectoral front, realty, oil, metal, bank and information technology stocks were among the notable losers. Power and capital goods stocks were also trading weak, while select automobile, FMCG and capital goods stocks were up in positive territory with notable gains.

On the global front, Asian shares were trading lower after Wall Street indices retreated as investors tried to figure out the extent of damage the US Federal Reserve's potential rollback of global asset buys would have on the markets. Back home, the market breadth was favoring negative trend; there were 775 shares on the gaining side against 1,131 shares on the losing side, while 126 shares remain unchanged.

The BSE Sensex is currently trading at 20,147.90, up by 0.26 points after trading in a range of 20,156.02 and 20,066.14. There were 11 stocks advancing against 18 declines on the index while one remains unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.22% and Small cap index was down by 0.38%.

The top gaining sectoral indices on the BSE were, Auto up by 1.10%, FMCG up by 0.66% and Capital Goods up by 0.03%, while Realty down by 2.61%, Consumer Durables down by 1.18%, Oil & Gas down by 0.86%, TECK down by 0.52% and Metal down by 0.47% were the top losers on the BSE.

The top gainers on the Sensex were Tata Motors up by 3.03%, Mahindra & Mahindra up by 2.11%, ITC up by 1.39%, HDFC up by 1.18% and Sun Pharma up by 0.82%.

On the flip side, Cipla was down by 3.37%, ICICI Bank was down by 2.11%, Tata Steel was down by 1.61%, Bharti Airtel was down by 1.57% and ONGC was down by 1.20% were the top losers on the Sensex.

Meanwhile, in order to set-up an independent regulatory authority for the coal sector, the Group of Ministers (GoM) has approved a bill which will address controversial coal issues such as quality, pricing and supply. Coal Regulatory Authority Bill will be sent to the cabinet within 10 days for its approval. Creation of an independent regulator for the coal sector is important for fixing guidelines for price revision, improving competitiveness in the e-auctions, setting trading margins, and increasing transparency in the allocation of reserves.

Power Minister Jyotiraditya Scindia said that GoM had a very successful meeting on both issues of Coal Regulatory Authority Bill and pass-through mechanism for supply of coal and has approved the coal regulatory authority bill. Further, some of the major functions of the proposed authority would be related to pricing, quality and supply of coal. By adding further, he said that the proposed regulator protects the interest of all stakeholders and at the same time gives a very judicious balance to the regulatory authority to be able to supervise the supply and demand of coal in the country.

The GoM has achieved closure on pass-through mechanism structure as well in which the price charged from electricity distribution companies will absorb the rising cost instead of being cross-subsidised by pooling of or absorbed by the power-generating companies. Moreover, the regulator will be empowered to resolve disputes including those arising out of fuel supply agreements (FSAs), however, it will not determine fuel rates, a job that will continue to be vested with the producers.

The CNX Nifty is currently trading at 6,097.65 down by 6.65 points or 0.11% after trading in a range of 6,103.40 and 6,072.15. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Tata Motors up by 3.03%, M&M up by 2.15%, PNB up by 1.59%, NMDC up by 1.41% and ITC up by 1.30%.

On the flip side, JP Associate down by 3.54%, Cipla down by 3.41%, DLF down by 2.87%, ICICI Bank down by 2.01% and Tata Steel down by 1.81% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dipped 0.29%, Hang Seng declined 0.11%, Jakarta Composite tumbled 1.06%, KLSE Composite contracted 0.42%, Nikkei 225 crumbled 5.15%, Straits Times dropped 1.22%, KOSPI Composite was up by 0.05% and Taiwan Weighted was down by 1.13%.