Benchmarks trade lower ahead of July F&O expiry

Extending southward journey, Indian equity benchmarks are trading lower in early deals on Thursday pressurized by weak global cues. Sentiments also remained somber on report that foreign institutional investors (FIIs) sold shares worth a net Rs 404.50 crore on July 24, 2013. Meanwhile, investors opted to stay away from piling up positions in risky assets ahead of expiry of July derivative contracts. Selling in Metal counter continues for second straight day with shares of NMDC, Hindustan Zinc, Hindalco and Sterlite Industries edging lower after a private survey showed manufacturing weakened further in July in China. Sentiments also got dented after cement companies plunged, led by 13% fall in Ambuja Cement after Swiss parent Holcim announced a major restructuring of its India operations on July 24, 2013. Weak Q2 earning also weighed on the stock.

Shares on Wall Street ended tad lower overnight, retreating further from their record highs on disappointing results from several top companies, while stronger-than-expected US and European factory data led to selling in safe-haven US and German government debt, sending their yields higher. Asian markets too were trading mostly lower Japanese markets declined over half a percent, led by over 6% fall in shares of the camera maker Canon after it lowered sales forecasts by 10 per cent late Wednesday.

Back home, on the sectoral front, software witnessed the maximum gain in trade followed by technology and oil and gas, while power, FMCG and metal remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the market breadth on the BSE was positive; there were 468 shares on the gaining side against 690 shares on the losing side while 47 shares remain unchanged.

The BSE Sensex opened at 20,062.00; about 28 points lower compared to its previous closing of 20090.68, and has touched a high and a low of 20,110.81 and 19,910.08 respectively. The index is currently trading at 20030.33, down by 60.35 points or 0.30%. There were 7 stocks advancing against 23 declines on the index.

The overall market breadth has made a weak start with 38.63% stocks advancing against 57.41% declines. The broader indices too were trading in red; the BSE Mid cap and Small cap indices were down by 0.53% and 0.26% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 0.37%, Teck up by 0.18% and Oil & Gas up by 0.15%, while Power down by 1.17%, FMCG down by 0.83%, Metal down by 0.77%, Consumer Durables down by 0.72% and Health Care down by 0.70% were the top losers on the sectoral index.

The top gainers on the Sensex were Hero MotoCorp up by 4.11%, ONGC up by 1.20%, Infosys up by 0.94%, Cipla up by 0.29% and Dr Reddys Lab up by 0.20%. On the flip side, Tata Power was down by 2.92%, BHEL was down by 2.42%, Hindalco Industries was down by 1.50%, Hindustan Unilever was down by 1.30% and Sun Pharma was down by 1.26% were the top losers on the Sensex.

Meanwhile, Petroleum and Natural Gas Minister Veerappa Moily has ruled out reconsidering over gas pricing policy, saying that the Cabinet Committee on Economic Affairs has taken the decision and there was no proposal before the government to reconsider the new gas pricing policy. Moily said that, the government doesn’t want to change it as the enhancement of gas price is in the favour of nation’s development, although, the decision of gas price hike has attracted criticism, particularly from the Left parties.

Moily further added that, in a bid to raise energy production to 800 MW from 32 MW at present, ONGC would accord priority to make available 20 lakh cubic metres of gas per day to the Puducherry Power Corporation in Karaikal and the state run company has agreed to fulfill this obligation on a priority basis and would also ensure transportation of the gas within two years. The state run PSU company would also associate itself with the state government in setting up a super speciality hospital at Karaikal.

This issue was discussed with Lt. Governor of Puducherry Veerendra Kataria and Minister of State in PMO V Narayanasamy too was keen on augmenting power generation in the state. Minister of State for Petroleum and Natural Gas, Panabaka Lakshmi too supported the same. Meanwhile, Chief Minister N Rangasamy had assured that accelerating government’s initiatives like acquiring land and other allied work will boost energy production.

Further, Veerappa Moily said that GAIL’s pipeline project would help people of Tamil Nadu, particularly, farmers and would not have negative impact on agriculture. Such project, covering around 16,000 km all over the country, has already benefited farmers, apparently referring to the objections by the Tamil Nadu government in this regard.

The CNX Nifty opened at 5,970.40; about 20 points lower as compared to its previous closing of 5,990.50, and has touched a high and a low of 5,990.65 and 5,958.30 respectively.

The index is currently trading at 5,962.05, down by 28.45 points or 0.47 %. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were Hero MotoCorp up by 4.39%, ONGC up by 1.31%, HCL Tech up by 1.01%, Asian Paint up by 0.96% and Infosys up by 0.91%. On the flip side, Ambuja Cements down by 13.08%, JP Associate down by 5.08%, ACC down by 4.51%, UltraTech Cement down by 3.32% and Tata Power down by 2.87% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dipped 2.01 points or 0.10% to 2,031.32, Hang Seng declined 63.48 points or 0.29% to 21,905.45, Jakarta Composite contracted 40.26 points or 0.85% to 4,677.85, Nikkei 225 decreased 77.99 points or 0.53% to 14,653.29, Straits Times shed 28.92 points or 0.88% to 3,245.84 and Taiwan Weighted was down by 19.66 points or 0.24% to 8,176.53.

On the flip side, KLSE Composite rose 0.71 points or 0.04% to 1,810.71 and Seoul Composite was up by 0.66 points or 0.03% to 1,912.74.