Benchmarks continue weak trade in afternoon session

Indian equity benchmarks continued to trade lower in the afternoon session amid selling witnessed in blue chip stocks such as HDFC Bank, BHEL and ICICI Bank stocks. Investors were cautious over the country’s rising fiscal deficit as the government recently announced that it will pay only Rs 5,500 crore subsidy to fertilizer industry under a special banking arrangement (SBA). However, the markets’ losses remained cap as selling witnessed in banking, metal and financial stocks was offset by buying in oil and gas, IT and auto stocks. Oil and gas stocks were trading up by 1.20% on BSE on report that a drilling campaign off Brazil's northeastern coast showed that an area control by the consortium of IBV Brazil likely holds more than a billion barrels of oil. On stock specific movement, Hero Moto Corp, Sun Pharma and Bajaj Auto were trading up by over 1 percent; while, ICICI Bank, BHEL and Bharti Airtel were trading lower by over 1.5 percent on BSE. On global front, Asian equity indices were trading mixed as US jobless claims data pointed to an improving labour market, but the lack of progress in budget and debt negotiations in Washington kept investors on edge. Back home, the market breadth remained positive, out of 1,979 stocks traded, 1098 stocks advanced, while 748 stocks declined on the BSE.    

The BSE Sensex is currently trading at 19,839.49 down by 54.36 points or 0.27% after trading in a range of 19,981.57 and 19,796.39. There were only 14 stocks advancing against 16 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 0.70%.

The gaining sectoral indices on the BSE were Oil and Gas up by 1.24%, IT up by 0.66%, Auto up by 0.56% and Consumer Durables up by 0.54%. While Bankex down by 1.37%, Metal down by 0.22% and FMCG down by 0.17% were remained the losing indices on BSE.

The top gainers on the Sensex were HeroMoto Corp up by 2.16%, Sun Pharma up by 1.50%, Bajaj Auto up by 1.11%, Sesa Goa up by 1.04% and Reliance up by 1.01%. On the flip side, ICICI Bank down by 2.47%, BHEL down by 2.16%, Bharti Airtel down by 1.91%, HDFC Bank down by 1.66% and Tata Steel down by 1.34% were the only losers on the Sensex.

Meanwhile, the government is likely to announce 10th round of auction of oil and gas blocks in January, 2014. Oil Minister M Veerappa Moily said that 10th round of auction will be a perfect one as hindrances faced in the previous rounds would be removed as country looks to attract foreign investors to boost domestic production. During the previous nine rounds, the government had awarded 254 blocks for exploration of oil and gas, which had received tepid response with global majors staying away.

In the 10th round of New Exploration Licensing Policy (NELP), Oil Ministry is looking at offering as many as 68 blocks or areas for exploration of oil and gas. Out of 68 blocks considered for offering in NELP-10, 25 blocks are deep water, 20 shallow water and 23 on land blocks. It will be the second highest offering of blocks since the advent of NELP in 1999 and will be free from obstructions facing exploration and production. At present, the Directorate General of Hydrocarbons (DGH) and the Oil Ministry are in process of getting various clearances for offering oil and gas blocks.

As per the government, 10th round of auction is likely to be held on new terms wherein a bidder shall be asked to quote the amount of oil or gas output it is willing to offer to the government from the first day of production. Presently, oil companies are allowed to share the profit with the government only after recovering the entire cost of exploration and production.

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 25 percent in 2025 through intensive exploration and exploitation of untapped reserves. Presently, only 0.93 million sq km area in India is held under exploration and production in 19 basins as compared to total estimated sedimentary area of 3.14 million square kilometres, comprising 26 sedimentary basins.

The CNX Nifty is currently trading at 5,871.95 down by 10.38 points or 0.18% after trading in a range of 5,909.20 and 5,854.95. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were BPCL up by 9.48%, HCL Tech up by 2.54%, Hero Moto Corp up by 1.97%, Ranbaxy up by 1.66% and Sun Pharma up by 1.49%. On the flip side, ICICI Bank down by 2.60%, BHEL down by 2.26%, Bharti Airtel down by 1.93%, HDFC Bank down by 1.71% and Tata Steel down by 1.48% were the major losers on the index.

The Asian equity indices were trading in green; Straits Times up by 0.69%, Jakarta Composite up by 0.70%, Seoul Composite up by 0.22%, KLSE Composite up by 0.26%, Taiwan Weighted up by 0.56% and Hang Seng up by 0.37%. While, Nikki 225 down by 0.26% and Shanghai Composite down by 0.11%.