Indian equities continue to trade weak in late morning session

Volatility ruled the roost on street as the benchmarks once again turned in red terrain, in late Morning trade after touching the positive trajectory for a brief period in early deals, as the rupee weakened in early trade due to dollar buying by state-run banks to meet demand of importers. Meanwhile, Inflation likely edged up to a sixth-month high in August, driven by higher food prices and as the battered rupee made key imports such as fuel costlier

On the global front, Global cues remained mixed as the US markets continued their rally overnight, extending their gains for yet another day amid cautious optimism that the Syrian crisis could be resolved without US military action. However, the Asian equity indices were trading in the mixed at this point of time as investors booked some profit after recent rallies. Chinese benchmark was trading in the green terrain after data on Tuesday showed that Chinese auto sales, factory output and investment all improved in August.

Back home, traders were buying, Capital Goods, Realty and Metal while selling were seen in FMCG, Oil & Gas and Banking on the BSE. Meanwhile, the benchmarks NSE Nifty and BSE Sensex were trading near the psychological 5,850 and 19,900 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in the ratio of 1023: 600.

The BSE Sensex is currently trading at 19947.55, down by 49.54 points or 0.25% after trading in a range of 20055.53 and 19820.24. There were 16 stocks advancing against 14 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.91% and Small cap index up by 0.55%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.51%, Realty up by 1.30%, Metal up by 1.24%, Health Care up by 0.67% and TECK up by 0.61%, while FMCG down by 1.12%, Oil & Gas down by 0.46%, Bankex down by 0.37%, Power down by 0.36% and PSU down by 0.30% were the top losers on the sectoral index.

The top gainers on the Sensex were Maruti Suzuki up by 2.90%, Hindalco Industries up by 2.77%, L&T up by 2.33%, Hero MotoCorp up by 2.11%, Tata Steel up by 1.91% and On the flip side, ONGC was down by 2.16%, Hindustan Unilever was down by 1.80%, Tata Motors was down by 1.62%, ITC was down by 1.55% and ICICI Bank was down by 1.33% were the top losers on the Sensex.

Meanwhile, Oil Minister M Veerappa Moily has said that the government’s move for doubling of natural gas prices will halve the demand of gas in the country. At present, most of the domestically produced gas is sold at $4.2 per million British thermal unit (mmBtu) and delivered up to price $6.5, which generates an additional demand of 204 million standard cubic metres per day (mmscmd) over and above present consumption of 145.7 mmscmd.

Moily, quoting a recent study on the gas sector, said that total gas demand would increase to around 260-350 mmscmd, if delivered gas prices continue at $5.8-6.5 per mmBtu. By adding further he said that in case the prices rises to $10-12 per mmBtu, potential domestic gas demand would be lower at around 180 mmscmd, generating additional demand of only 72 mmscmd, whereas at prices above $12 and up to $18 per mmBtu, the potential demand would be limited to 38 mmscmd only. High natural gas prices would neither benefit the buyers nor the producers/suppliers and there is no doubt that high prices would drift the demand away from LNG to other competing fuels. At present, the share of natural gas in the total energy consumption in the country is at 11 percent, which is expected to increase 20 percent by 2025.

As per the study commissioned by the Petroleum and Natural Gas Regulatory Board (PNGRB), domestic gas production, which was 101.1 mmscmd in 2012-13, is projected to rise to 156.7 mmscmd in 2016-17 and to 182 mmscmd in 2021-22 on back of desired policy support and correct pricing signals.

Earlier, in June, the government had approved the pricing of all domestically produced gas at an average of international hub rates and cost of imported LNG, which will translate into a price of $8.4 per mmBtu, while, the delivered price will be over $10 mmBtu. However, the gas price hike has been opposed by user industries and a petition has also been filed in the Supreme Court saying that rate increase will benefit only a single corporate.

The CNX Nifty is currently trading at 5,881.80 down by 14.95 points or 0.25% after trading in a range of 5,913.45 and 5,842.10. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 2.94%, Hindalco up by 2.68%, L&T up by 2.41%,  Lupin up by 2.34%, and IndusInd Bank up by 2.21%. On the flip side, ONGC down by 2.03%, Power Grid down by 1.76%, Tata Motors down by 1.67%, Hindustan Unilever down by 1.64% and ITC down by 1.61% were the major losers on the index.

The Asian equity indices were trading in mix; Hang Seng declined by 19.89 points or 0.09% to 22,956.76, Jakarta Composite slipped 17.92 points or 0.41% to 4,340.23, Straits Times dipped 12.31 points or 0.37% to 3,112.52, and Taiwan Weighted was down by 35.64 points or 0.43% to 8,173.13.

On the flip side, Shanghai Composite rose 14.06 points or 0.63% to 2,252.04, KLSE Composite strengthened 3.44 points or 0.19% to 1,768.39, Seoul Composite increased 3.81 points or 0.19% to 1,997.87 and Nikkei 225 was up by 98.95 points or 0.69% to 14,515.48.