Markets trade slightly in the green in early deals

Indian equity benchmarks have made a cautious start and bout of volatility was witnessed in initial deals as investors opted to remain on sidelines ahead of expiry of the September F&O series. However, markets managed to keep their head above water as sentiments remained up-beat on report that indirect tax collections grew at 4.1 percent in the April-August period of this fiscal total collection of indirect taxes stood at about Rs 1,67,000 crore during the first five months of the 2012-13 fiscal. Moreover, some support also came in with the Reserve Bank of India’s assurance that it will take actions, including open market operations, to ensure adequate liquidity support in the system. Meanwhile, foreign institutional investors (FII) bought shares worth Rs 382 crore on September 25, 2013, while domestic institutional investors (DII) sold shares worth Rs 473 crore.

However, the gains on the upside remained capped as global cues remained sluggish with the US markets once again ending modestly in red, extending their weakness for one more day on lingering concerns about the possibility of a government shutdown at the end of the month. Moreover, sluggishness in Asian equity benchmarks too dampening the sentiments as most of the regional counters were trading in the red at this point of time in absence of any positive trigger.

Back home, on the sectoral front, auto witnessed the maximum gain in trade followed by capital goods and healthcare, while realty, oil and gas and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices too were managing to keep their head above water, while the market breadth on the BSE was positive; there were 668 shares on the gaining side against 450 shares on the losing side while 59 shares remain unchanged.

The BSE Sensex opened at 19853.66; about 3 points lower compared to its previous closing of 19856.24, and has touched a high and a low of 19916.63 and 19826.99 respectively.

The index is currently trading at 19874.73, up by 18.49 points or 0.09%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a strong start with 56.27% stocks advancing against 38.70% declines. The broader indices, the BSE Mid cap and Small cap indices were down by 0.05% and 0.44% respectively. 

The few gaining sectoral indices on the BSE were, Auto up by 0.76%, Capital Goods up by 0.66%, Health Care up by 0.54%, IT up by 0.42% and Bankex up by 0.27%, while Oil & Gas down by 0.81%, Realty down by 0.77%, PSU down by 0.48%, FMCG down by 0.48% and Metal down by 0.30% were the only losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 2.76%, HDFC up by 1.76%, Sun Pharma up by 1.65%, Mahindra & Mahindra up by 1.61% and Wipro up by 1.19%. On the flip side, Jindal Steel was down by 2.47%, ONGC was down by 1.93%, Bharti Airtel was down by 1.56%, NTPC was down by 1.28% and Hindalco Industries was down by 1.20% were the top losers on the Sensex.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) has approved the new methodology for auctioning coal blocks in order to provide upfront and production-linked payments and benchmarking of coal sale prices. The move will ensure greater transparency in auctioning the fully explored coal blocks and will also enable the government to allot coal mining licences through competitive bidding for the first time. The government will put coal blocks for auction after the environment ministry reviews and bidders approval to a minimum work programme.

It is reported that process of bidding of coal blocks will be started soon and six explored blocks with estimated reserves of over 2,000 million tonnes will be auctioned first. Under the new methodology, bidders have to provide production-linked payment on rupee per tonne basis, plus a basic upfront payment of 10 percent of the intrinsic value of the coal block. Meanwhile, intrinsic value will be calculated based on net present value (NPV) of the block arrived at through the discounted cash flow (DCF) method.

In order to benchmark the selling price of coal, the international freight-on-board (FoB) price from the public indices like Argus/Platts will be used by adjusting it with 15 percent to provide for inland transport cost. Further, the policy stated that to reduce short-term volatility in selling price, the average sale price of the past five years will be considered. To rationalise electricity tariffs, a 90 percent discount will be provided on the intrinsic value for the regulated power sector. The policy also stated that the bidders can also relinquish their blocks without penalty if they have carried out the minimum work programme stipulated in the agreement.

The CNX Nifty opened at 5,872.80; about 1 point lower as compared to its previous closing of 5,873.85, and has touched a high and a low of 5,892.85 and 5,864.10 respectively.

The index is currently trading at 5,881.85, up by 8.00 points or 0.14 %. There were 26 stocks advancing against 22 declines and two stocks remain unchanged on the index.

The top gainers of the Nifty were JP Associate up by 1.87%, HDFC up by 1.78%, BHEL up by 1.71%, M&M up by 1.66% and Sun Pharmaceuticals up by 1.54%. On the flip side, Jindal Steel down by 2.33%, ONGC down by 1.75%, Bharti Airtel down by 1.55%, DLF down by 1.28% and Hindalco Industries down by 1.20% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 32.35 points or 1.47% to 2,166.17, Hang Seng decreased 101.31 points or 0.44% to 23,108.32, KLSE Composite shed 6.76 points or 0.38% to 1,777.30 and Taiwan Weighted was down by 74.93 points or 0.90% to 8,208.97.

On the flip side, Jakarta Composite surged 46.73 points or 1.06% to 4,453.50, Nikkei 225 rose 59.84 points or 0.41% to 14,680.37 and Seoul Composite was up by 7.51 points or 0.38% to 2,005.57.