Benchmarks trade in red; FMCG, Realty drag

Indian equities added losses to continue weak trade in the late afternoon session on account of selling in frontline counters. Investors were cautious ahead of RBI’s monetary policy review scheduled on October 29, amidst the expectation that India’s apex bank would hike key interest rates by 25 basis points, while further slashing MSF rate by the same quantum. Traders were seen piling position in Consumer Durables, Capital Goods and Oil & Gas stocks while selling was witnessed in FMCG, Realty and Metal sector stocks. In scrip specific development, Colgate-Palmolive (India) was trading in red after its operational margins in September quarter took a knock of 600 basis points, due to rising ad-spends and higher other expenditure. Gold finance companies - Muthoot Finance and Manappuram Finance - were locked at upper circuit limit on speculation that the Reserve Bank may allow them to lend 75 percent of the value of jewellery compared with 60 percent earlier.

On the global front, all the Asian markets were trading in green barring Jakarta Composite and KLSE Composite while the European markets were trading on a mixed note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,150 and 20,700 levels respectively. The market breadth on BSE was negative in the ratio of 902:1308 while 155 scrips remained unchanged.

The BSE Sensex is currently trading at 20626.03, up by 57.49 points or 0.28% after trading in a range of 20,771.36 and 20586.07. There were only 12 stocks advancing against 18 declines on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.48% while Small cap index slipped by 0.26%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.74%, Capital Goods up by 1.14%, Oil and Gas up by 0.86% and Auto up by 0.07%. While, FMCG down by 2.25%, Realty down by 1.41%, Metal down by 1.18%, Health Care down by 0.84% and Power down by 0.75% were losing indices on BSE.

The top gainers on the Sensex were L&T up by 2.06%, RIL up by 1.67%, Bajaj Auto up by 0.97%, HDFC up by 0.95% and ONGC up by 0.83%. On the flip side, ITC down by 3.26%, SSLT down by 2.70%, Tata Steel down by 1.99%, Hindalco Industries down by 1.28% and SBI down by 1.26% were the top losers on the Sensex.

Meanwhile, in order to meet India’s growing coal demand, the government will soon invite bids from private players to kickstart coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India. The decision to invite bids was taken by a nine-member high-level committee, headed by coal secretary and having senior officials from the finance ministry, Planning Commission as well as the law ministry. According to the proposal, the coal mines will remain in the ownership of the public sector while the private partner will receive a mining charge on the coal mines. Further, sale of such coal will be undertaken by the public entity, which grants the PPP concession.

The move will also be helpful to check the widening current account deficit (CAD) of the country by reducing the coal imports. In spite of world's fifth largest in terms of reserves and third-largest producer of coal, India's domestic output has failed to keep pace with demand over the past few years. At present, Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. In the previous fiscal, India imported $16 billion worth of coal. 

India is the world's third-largest producer of coal and the fifth largest in terms of reserves. Presently, Coal India is the only producer of domestic coal, which is struggling to meet domestic requirement. Thus, the government is of the view that involvement of private players will produce faster and cheaper coal for the country. Acute coal shortages in the country has become primary reason for power deficit in the country as coal-fired plants account for 57% of India's installed electricity capacity. 

The CNX Nifty is currently trading at 6,116.30, down by 28.60 points or 0.47% after trading in a range of 6,168.75 and 6,107.45. There were 12 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were L&T up by 1.94%, Reliance Industries up by 1.45%, HDFC up by 0.98%, Bajaj Auto up 0.96% and Axis Bank was up by 0.63%. On the flip side, JP Associate down by 3.94%, ITC down by 3.22%, SSLT down by 2.67%, Bank of Baroda down by 2.63% and DLF down by 2.34% were the major loser on the index.

Most of the Asian equity indices were trading in green; Taiwan Weighted up by 0.73%, Seoul Composite up by 0.68%, Straits Times up by 0.13%, Hang Seng up by 0.48%, Shanghai Composite up 0.04% and Nikkei 225 up by 2.19% While, Jakarta Composite down by 0.16% and KLSE Composite down by 0.02% were the only losers in the Asian pack.

The European markets were trading on a mixed note; France’s CAC 40 was down 0.07%, Germany’s DAX gained 0.17% and UK’s FTSE 100 was up 0.11%.