Indian markets continue their collide for eighth consecutive session

Markets continue to collide for eighth consecutive day as mounting worries about slowing growth and sluggish policy initiatives amid persisting uncertainty over the euro zone debt crisis prompted investors to reduce their exposure. Back home, BSE’s -- Sensex -- and NSE’s -- Nifty -- breached their crucial 16,300 and 4,900 mark amid a weak trend in the Asia region driven by the deepening euro zone crisis. The stocks of oil and gas, technology, banking, metal and consumer durable companies remained under selling pressure and were mainly responsible for the Sensex’s decline. In a similar fashion, the broader indices on the BSE too struggling to get some traction, while market breadth on the BSE was negative; there were 541 shares on the gaining side against 860 shares on the losing side while 74 shares remained unchanged. Moreover, a steep rise in the inflation rate might hurt economic growth, which has pulled down infrastructure and banking, which contributed to the lower opening in the stock market. Meanwhile, the Indian rupee depreciated to 51.48 a dollar in the morning trade, losing 0.3% as compared to Friday’s rate of 51.33/USD. Trade may remain volatile today as it being the expiry week for the November F&O series.

The BSE Sensex opened at 16,298.03; about 73 points lower compared to its previous closing of 16,371.51, and has touched a low of 16,180.29 while high remain its opening.

The index is currently trading at 16,232.88 down by 138.63 points or 0.85%. There were 5 stocks advancing against 25 declines on the index.

The overall market breadth has made a negative start with 36.68% stocks advancing against 58.31% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices declined by 0.59% and 0.31% respectively.

The top gaining sectoral indices on the BSE were, CG up by 0.69% and HC was up by 0.01%. While, Oil and Gas down by 1.27%, Bankex down by 1.11%, TECk down by 0.98%, Metal down by 0.97% and CD down by 0.90% were the top losers on the index.

The top gainers on the Sensex were L&T up by 1.44%, Cipla up by 0.89%, Jaiprakash Associates up by 0.48%, Maruti Suzuki up by 0.48% and BHEL was up by 0.04%.

On the flip side, RIL was down by 2.03%, Tata Motors was down by 1.67%, Bharti Airtel was down by 1.53%, Bajaj Auto was down by 1.41% and TCS was down by 1.40% were the top losers on the Sensex.

Meanwhile, the ministry of finance has sanctioned an additional Rs 15, 000 crore to partially compensate state-owned Oil Marketing Companies’ losses (OMCs) for selling fuel below market price.

According to a senior oil ministry official, the finance minister has sanctioned an additional compensation of Rs 15,000 crore on November 11 which is over and above Rs 15,000 crore granted for meeting the revenue loss incurred during the first quarter of current fiscal.

The finance ministry has issued the sanction letter and the actual cash would be given to the oil firms once the Parliament approves supplementary demand for grants during the winter session starting from November 22.

During the April-June 2011, the OMCS reported revenue loss of around Rs 43,526 crore on selling diesel, domestic cooking gas and kerosene at the government controlled rates, which are below market price. The oil ministry has soughed for Rs 29,000 crore cash subsidy for April-June 2011 however it had got only Rs 15,000 crore.

Presently, oil marketing firms are losing Rs 11.44 per liter on diesel, Rs 26.94 per liter on kerosene sold via the public distribution system (PDS) and Rs 260.5 per 14.2-kg LPG cylinder supplied to domestic households for cooking purposes. As a result, presently the Oil firms are incurring a daily revenue loss of about Rs 360 crore on sale of three fuels. With this speed, by the end of 2011-12, OMCs are expected to make revenue loss of Rs 130,000 crore.

In the second quarter of 2011-12, the OMCs have registered revenue loss of Rs 21,374 crore, of this one-third or around Rs 7,124 crore would be made by leading firms such as Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL). The ministry of finance was asked to make good the rest Rs 14,250 crore. 

Financial condition of oil companies is very fragile, we have been pleading for higher government compensation to the oil marketing companies,' oil ministry official said. During April-September 2011, OMCs have incurred revenue loss of Rs 64,900 crore, however, government has agreed to give only Rs 30,000 crore.

Oil Ministry official said that the Oil Ministry wanted the upstream share be limited to historic one-third or 33.33% of the total under-recovery or revenue loss. The Finance Ministry, however, wants the contribution by ONGC, OIL and GAIL India to increase to atleast 50%. 'If we can confine the burden (of upstream firms) to 33.33%, we will be lucky,' he added.

The S&P CNX Nifty opened at 4,873.80; closely 32 points lower compared to its previous closing of 4,905.80, and has touched a low of 4,847.55 while high remain its opening.

The index is currently trading at 4,862.60, lower by 43.20 points or 0.88%. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were L&T up by 1.37%, Cipla up by 0.78%, Cairn up by 0.49%, Jaiprakash Associates up by 0.48% and Dr Reddy up by 0.41%.

On the flip side, RIL down by 2.09%, IDFC down by 1.93%, Tata Motors down by 1.85%, SAIL down by 1.80% and HCL Tech down by 1.79%, were the major losers on the index.

Asian peers were hammered badly in the trade; Shanghai Composite was down 8.83 points or 0.37% to 2,407.74, Hang Seng was down 338.24 points or 1.83% to 18,152.99, Jakarta Composite was down 54.87 points or 1.46% to 3,699.63, KLSE Composite was down 13.78 points or 0.95% to 1,440.62, Nikkei 225 was down 17.16 points or 0.20% to 8,357.75, Straits Times was down 21.55 points or 0.79% to 2,708.79, Seoul Composite was down 24.32 points or 1.32% to 1,814.85 and Taiwan Weighted was down by 179.84 points or 2.49% to 7,053.94.