Indian equities trim losses; trade continues in red

Indian equities trimmed losses but continued to trade in red in the late afternoon session taking cues from the global counterparts. The mood on the street was on pessimistic note from the start of the trade and there was absence of buying as US lawmakers remain deadlock over extending the debt ceiling. Traders were seen piling positions in HealthCare, IT and Metal stocks, while selling was witnessed in Bankex, Realty and Oil & Gas sector stocks. IT stocks were trading firm after the rupee weakened against the dollar today. A weak rupee boosted revenues of IT firms in rupee terms as the sector derives a major share of revenue from exports. In scrip specific development, Power Grid Corporation of India was trading under pressure on reports of the follow-on public offer, which is likely to take place in November. Coal India was trading in red on reports that the company is aiming to divest 5 percent stake through follow-on public offer. ICICI Bank was trading in red as traders and investors were concerned on reports after the bank raised alarm over loan default by the Dabhol power plant. TVS Motor Company was trading firm on media report that TVS Group would restructure Sundaram Clayton which would strengthen TVS balance sheet. Sundaram Clayton is the holding company of TVS Motor with 57.4 percent stake as of June 2013 while promoters hold 75 percent stake in Sundaram Clayton.

On the global front, the Asian markets were trading in red while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,900 and 19,900 levels respectively. The market breadth on BSE was negative in the ratio of 1043:1079 while 156 scrips remained unchanged. 

The BSE Sensex is currently trading at 19816.92 down by 99.03 points or 0.50% after trading in a range of 19,888.41 and 19,647.88. There were only 14 stocks advancing against 16 declines on the index.

The broader indices sustained their gains; the BSE Mid cap and Small cap indices were trading higher by 0.30% and 0.35% respectively.

The gaining sectoral indices on the BSE were Healthcare up by 0.85%, IT up by 0.84%, Metal up by 0.82% and TECK up by 0.63%. While, Bankex down by 2.02%, Realty down by 0.76%, Oil & Gas down by 0.75%, PSU down by 0.73% and Consumer Durables down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.41%, Hindalco Industries up by 3.22%, BHEL up by 1.95%, Hero MotoCorp up by 1.57% and Jindal Steel up by 1.56%. On the flip side, Coal India down by 3.03%, ICICI Bank down by 2.47%, HDFC Bank down by 2.21%, Reliance Industries down by 1.42% and Tata Motors down by 1.42% were the losers on the Sensex.

Meanwhile, emphasizing the need to boost domestic gas and oil output and to meet the growing energy needs of the country, Oil Minister Veerappa Moily said that India will become energy independent by 2030 as expert panel is preparing a road map for enhancing domestic oil and gas production.

The government has set up a committee led by former finance secretary Vijay Kelkar to prepare road map aimed at boosting the domestic production of oil and gas and help India achieve energy security. India currently imports around 80% of its oil needs and 25% of its natural gas requirements and the committee forecasts it to be lowered by 50% by 2020 and by 75% in 2025 through intensive exploration and exploitation of untapped reserves. Oil minister further added that country has enough resources of oil and natural gas, but there is need to explore these resources. 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.

Moreover, the government will announce 10th round of New Exploration Licensing Policy (NELP) auction of around 68 oil and gas blocks in January, 2014, which will be the second highest offering of blocks since 1999. 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.

The CNX Nifty is currently trading at 5,878.60 down by 28.70 points or 0.49% after trading in a range of 5,895.25 and 5,825.85. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Tata Steel up by 3.55%, Hindalco Industries up by 3.35%, Ranbaxy Laboratories up by 3.28%, IDFC up by 3.05% and BPCL up by 3.03%. On the flip side, Coal India down by 3.27%, ICICI Bank down by 2.51%, Axis Bank down by 2.38%, HDFC Bank down 2.22% and Kotak Bank down by 2.01% were the major losers on the index.

All the Asian equity indices were trading in red; Jakarta Composite slipped by 0.43%, Seoul Composite dropped by 0.13%, Hang Seng slid by 0.71%, Nikki 225 plunged 1.22%, KLSE Composite down by 0.11%, Taiwan Weighted declined by 0.37% and Straits Times lost 0.07%.

Shanghai Stock Market was closed on account of National Day and will be open for trading on October 8.

The European markets were trading in red; France’s CAC 40 was down 1.20%, Germany’s DAX lost 1.21% and UK’s FTSE 100 dropped 0.82%.