Benchmarks fail to maintain initial gains; CG, Auto drags

Benchmarks were witnessing a lackluster trade after slipping in the negative territory ahead of the September expiry and in absence of supportive cues from Asian peers. Meanwhile, rupee continues to lose ground against the dollar ever since the RBI withdrew some supportive measures for the domestic currency in its policy review on Friday. The rupee was down nearly 0.16 percent against the US dollar in early trade at 62.84. Sentiments remained cautions despite Union Cabinet approving a methodology for auctioning coal blocks, enabling the government to allot coal mining licences through competitive bidding for the first time. Also, RBI in its latest initiative of relaxing norms to raise funds from abroad has said that now all types of companies can avail trade credit facility from overseas for import of capital goods. Earlier, only companies in the infrastructure sector were allowed to raise such trade credits

Moreover, lethargic trade in Asian equity markets too dampening the sentiments with Japanese market trading with a cut of quarter a percent, as investors offloaded their holding at several counters, tracking a weak lead from Wall Street. Back home, traders were buying, Capital Goods, Auto and Power while selling were seen in FMCG, Banking and Oil & Gas on the BSE. Oil marketing PSU companies IOC, HPCL and BPCL were down between 1 percent and 3 percent after the oil minister said that the government has no proposal to hike diesel prices now. Tata Power and NTPC have gained between 1-2% as the Cabinet Committee on Economic Affairs (CCEA) approved the production-linked payment on rupee per tonne basis, plus a basic upfront payment of 10% of the intrinsic value of the coal block. BSE Sensex and NSE Nifty were comfortably trading near their psychological 5,850 and 19,850 levels respectively.

The market breadth on BSE remains negative with advances to declines in the ratio of 852:741. The BSE Sensex is currently trading at 19856.14, down by 64.07 points or 0.32% after trading in a range of 19978.49 and 19855.38. There were 18 stocks advancing against 12 declines on the index. The broader indices were trading in mix; the BSE Mid cap index was down by 0.17% and Small cap index gained 0.18%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.01%, Auto up by 0.49%, Power up by 0.43%, Health Care up by 0.29% and PSU up by 0.13%, while FMCG down by 1.13%, Bankex down by 0.72%, Oil & Gas down by 0.69%, Realty down by 0.53% and Consumer Durables down by 0.24% were the top losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 3.08%, Tata Motors up by 2.56%, Hero MotoCorp up by 1.48%, Tata Power up by 1.42% and Bharti Airtel up by 1.29%. On the flip side, HDFC Bank was down by 2.15%, ITC was down by 2.14% , Mahindra & Mahindra was down by 1.59%, RIL was down by 1.46%, and TCS was down by 0.71% were the top losers on the Sensex.

Meanwhile, In order to boost domestic shale gas and oil output and to meet the growing energy needs of the country, the Cabinet Committee on Economic Affairs (CCEA) has approved the long-awaited shale gas and oil exploration policy. As per the policy, national oil companies (NOCs) such as state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) have been permitted to explore and produce shale oil and gas from already awarded onland Petroleum Exploration License/Petroleum Mining Lease (PEL/PML) acreages under the nomination regime.

Further, CCEA in a statement, said that NOCs shall apply for grant of shale gas and oil rights in their interested PEL/PML acreages and taxes, royalty and cess would be payable at par with conventional oil and gas being produced from the respective areas. The oil companies are required to undertake a mandatory minimum work programme and also permitted to explore and produce oil and gas under three assessment phases of a maximum period of three years each.

Shale gas or natural gas trapped in sedimentary rocks (shale formations) below the earth's surface is seen as a new alternative to conventional oil and gas for meeting growing energy needs. Shale gas has become an increasingly important source of natural gas in the United States over the past decade, and now interest has spread to potential shale gas reserves in Canada, Europe, Asia, and Australia. It is estimated that recoverable reserves of shale gas in India is between 6 trillion cubic feet and 63 trillion cubic feet. Meanwhile, oil ministry has formulated a roadmap for cutting India's dependence on imports to meet its oil needs. India currently imports around 79 percent of its oil needs and the Ministry wants this to be cut to 50 percent by 2020 and by 75 percent in 2025 through intensive exploration and exploitation of untapped reserves.  

The CNX Nifty is currently trading at 5,876.00 down by 16.45 points or 0.28% after trading in a range of 5,910.55 and 5,873.60. There were 24 stocks advancing against 24 declines while 2 stocks remains unchanged on the index.

The top gainers of the Nifty were BHEL up by 3.29%, Tata Motors up by 2.58%, Tata Power up by 1.73%, Hero MotoCorp up by 1.70% and ONGC up by 1.37%. On the flip side, BPCL down by 3.60%, UltraTech Cement down by 1.86%, HDFC Bank down by 1.85%, IDFC down by 1.79% and REL Infra down by 1.76% were the major losers on the index.

Most of the Asian equity indices were trading in red; Jakarta Composite declined 45.98 points or 1.03% to 4,414.44, KLSE Composite dropped 6.77 points or 0.38% to 1,785.71, Nikkei 225 shed 36.18 points or 0.25% to 14,696.43, Seoul Composite contracted 14.58 points or 0.73% to 1,992.52 and Taiwan Weighted was down by 30.37 points or 0.37% to 8,268.75.

On the flip side, Shanghai Composite rose 5.86 points or 0.27% to 2,213.39 and Hang Seng was up by 31.20 points or 0.13% to 23,210.24.

Stock markets in South Korea remained shut for trade today.