Key domestic bourses continue to trade lower in noon deals

Key domestic benchmarks continued to reel under pressure after losing further ground in noon deals, pressurized by feeble global cues. Frontline gauges were trading way below their crucial 6,000 (Nifty) and 20,000 (Sensex) levels as investors remained on sidelines ahead of the expiry of July derivative contracts. Sentiments remained down-beat since morning on report that foreign institutional investors (FIIs) sold shares worth a net Rs 404.50 crore on July 24, 2013. Some pressure also came in from selling in fast moving consumer goods counter as investors booked profit in HUL and ITC after three days continuous rally.

Selling got intensified, after European markets opened in the red with CAC, DAX and FTSE all edged lower in early deals. Most of the Asian equity indices too were trading in the red with Japanese Nikkei tumbling 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. Back home, stocks of cement companies clobbered out of shape led by over 10% fall in Ambuja Cement. The cement major has reported 30.86% fall in its net profit at Rs 324.20 crore for the quarter as compared to Rs 468.90 crore for the same quarter in the previous year.

On the sectoral front, auto and oil and gas remained the only gainers on the BSE sectoral index, while FMCG, capital goods and power remained the top losers. The broader indices too were struggling to get some traction, while the overall market breadth on BSE is in the favour of declines which thumped advances in the ratio of 1255: 706; while 128 shares remained unchanged.

The BSE Sensex is currently trading at 19959.62, down by 131.06 points or 0.65% after trading in a range of 20110.81 and 19910.08. There were 11 stocks advancing against 19 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.75% and Small cap index lost 0.56%.

The top gaining sectoral indices on the BSE were, Auto up by 0.67% and Oil & Gas up by 0.22%, while FMCG down by 2.35%, Capital Goods down by 1.25%, Power down by 1.18%, Realty down by 1.00% and Metal down by 0.99% were the top losers on the sectoral index.

The top gainers on the Sensex were Hero MotoCorp up by 3.78%, Dr Reddys Lab up by 1.47%, ONGC up by 1.07%, Mahindra & Mahindra up by 1.00% and HDFC up by 0.73%. On the flip side, Wipro was down by 4.49%, BHEL was down by 3.19%, ITC was down by 3.05%, Hindustan Unilever was down by 2.82% and Tata Power was down by 2.60% were the top losers on the Sensex.

The government has recently issued another Presidential directive to state-owned Coal India to enter into fuel supply agreements (FSAs) with power plants for a capacity of 78,000 MW. Still out of the total 131 power plants, 52 of are yet to sign FSA with State-owned CIL, long after the passing of the second deadline set by the Prime Minister’s Office for signing of FSAs by early this year. Only 79 power plants, so far, have entered into the fuel supply agreements with CIL.

The 52 power firms had earlier this year, failed to meet the second deadline set by the PMO for signing FSAs. PMO had in December last year directed that the remaining FSAs should be signed within a month’s time. The directive in December, 2012 came after the November, 2012 deadline for signing of FSAs was missed.

Last year, the Coal Ministry had issued a Presidential directive for the first time to CIL to sign FSAs with the power producers assuring them of at least 80 per cent of the committed coal delivery. Earlier, some power firms including NTPC had refused to enter into FSAs with CIL over quality issues of the dry- fuel supplied to it. NTPC had also stopped payment to Coal India’s subsidiary -- Eastern Coalfields. Responding to that, the world’s largest coal miner had temporarily stopped supply of fuel to NTPC which was resolved later following government’s intervention. Uptill now, NTPC and CIL have inked FSAs for 28 units, with one remaining. While, the companies are yet to complete FSA for a 500 MW joint venture thermal power plant of NTPC and SAIL at Bhilai.

The CNX Nifty is currently trading at 5,956.25, down by 34.25 points or 0.57% after trading in a range of 5,990.65 and 5,954.35. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Hero MotoCorp up by 4.01%, BPCL up by 3.02%, Dr Reddys Lab up by 1.65%, ONGC up by 1.20% and PNB up by 1.19%. On the flip side, Ambuja Cements down by 11.04%, JP Associate down by 9.84%, ACC down by 4.36%, BHEL down by 3.22% and Hindustan Unilever down by 3.13% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dipped 0.33%, Hang Seng declined 0.33%, Jakarta Composite contracted 0.88%, Nikkei 225 decreased 1.14%, Straits Times shed 0.71%, Seoul Composite was down by 0.13% and Taiwan Weighted was down by 0.40%.

On the flip side, KLSE Composite rose 0.02%. 

European markets have got off to a negative start; with CAC 40 declining 0.17%, FTSE 100 sliding by 0.12% and DAX losing 0.47%.