Benchmarks continue weak trade; Sensex slips below 19,500 mark

Indian equity markets added losses to continue weak trade in the late afternoon session on account of selling in frontline blue chip counters and taking cues from European counterparts. The sentiments were on pessimistic mood after growth rate of eight core infrastructure industries slipped to 2.3% in May mainly due to declining output of crude oil, coal, fertilizer and natural gas. Traders were seen piling positions in Consumer Durables and Health Care stocks while selling was witnessed in Realty, PSU and Oil & Gas sector stocks. In scrip specific development, Tata Power Company was trading in red after global credit rating agency Moody’s Investors Service downgraded the company’s outlook to negative from stable. Auto stocks were trading under pressure as stocks like Tata Motors, Bajaj Auto, Maruti Suzuki and Ashok Leyland reported lower sales numbers in June due to slow down in demand. Hectic activity was witnessed in telecom companies on buzz that the telecom commission is meeting later today to take a call on 100% FDI in the sector.

On the global front, most of the Asian markets were trading in red while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,900 and 19,500 levels respectively. The market breadth on BSE was negative in the ratio of 1011:1146, while 144 scrips remain unchanged. 

The BSE Sensex is currently trading at 19479.85, down by 97.54 points or 0.50% after trading in a range of 19589.14 and 19458.34. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading on a mixed note; the BSE Mid cap was down by 0.29% and Small cap indexes were trading up by 0.01%.

The gaining sectoral indices on the BSE were, Consumer Durables up by 1.53% and Health Care up 0.47%, while Realty down by 1.93%, PSU down by 0.84%, Oil & Gas down by 0.80%, Bankex down by 0.76% and Metal down by 0.66% were the top losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 3.02%, Gail India up by 3.02%, Sterlite Industries up by 1.96%, Bharti Airtel up by 1.93% and ICICI Bank up by 0.69%. On the flip side, Jindal Steel down by 4.52%, ONGC down by 1.68%, Tata Power down by 1.53%, HDFC Bank down by 1.39% and Coal India down by 1.36% were the top losers on the Sensex.

Meanwhile, industry body, the Association of Oil and Gas Operators (AOGO) has raised concern about the government’s decision to nearly double the price of domestically produced natural gas, however the association welcomed the effort to create  stability of pricing regime and delinking of gas prices from the demand side issues but has raised concerns over the government decision to nearly double the price of domestically produced natural gas, saying that it falls short of the recommendations made by the Rangarajan committee and wants the government to clearly lay the roadmap for free market pricing regime.

AOGO said that the Rangarajan panel had recommended for taking price of both long-term LNG contracts as well as spot prices to arrive at domestic rates but the Cabinet Committee on Economic Affairs (CCEA) deleted spot rates from the formula, which will reduce the volume and the correct reflection of imported LNG cost and will further affect domestic producer's price. Further, the Rangarajan Committee had recommended a transition to free market prices in 5 years, thus the industry association also hopes that the transition to free market shall start within next year and shall be completed within the 5 year time span.

Last week, the government has approved doubling of natural gas prices from the present $4.2 per million British thermal unit (mbtu) to $8.4 per mbtu from April 1, 2014, a move which will deliver a potential boost to the revenue of gas producers. New price will be uniformly applicable to all public and private sector producers alike.

The CNX Nifty is currently trading at 5,864.75, down by 34.10 points or 0.58% after trading in a range of 5,898.80 and 5,858.30. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Lupin up by 3.40%, BHEL up by 2.85%, GAIL up by 2.08%, Sesa Goa up by 1.95% and IDFC up by 1.74%. On the flip side, Jindal Steel down by 5.37%, DLF down by 3.28%, Reliance Infrastructure down by 2.89%, Axis Bank was down 2.60% and PNB down by 2.13% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng dipped 0.70%, Jakarta Composite declined 0.71%, KLSE Composite slipped 0.20%, KOSPI Composite was down by 0.04% and Taiwan Weighted was down by 0.25%.

On the flip side, Shanghai Composite was up by 0.57%, Nikkei 225 rose 1.78% and Straits Times surged 1.06%.

The European markets were trading in red; France’s CAC 40 was down 0.61%, Germany’s DAX lost 0.77% and the United Kingdom’s FTSE 100 edged lower by 0.24%.