Markets gyrate in tight range; Sensex trades comfortably past 20,950 level

Local equity markets, after closing at highest level in 2013, continue to trade range-bound since morning deals, in absence of fresh positive trigger which could push the markets higher. Reluctance of traders to take position on the penultimate session of F&O expiry week combined with cautiousness ahead of outcome of the US central bank's latest decision on future stimulus policy. Thus, in the range-bound session of trade, Sensex and Nifty are trading above the crucial 20,950 and 6,200 levels respectively with modest gains. Meanwhile, broader indices outperforming the larger peers, are up and about with gains of over quarter of a percent.

On the global front, Asian share markets took heart from record highs in U.S. stocks on Wednesday as investors wagered the Federal Reserve would rock no boats at its policy meeting and leave stimulus in place for the next few months at least.

Closer home, stocks from Realty, Healthcare and Banking counters were the major pocket of strength for the bourses, while those from Auto, Metal and Oil & Gas counters are limiting the further gains of markets. Meanwhile, Shares of telecom operators too are ringing loud after July-Sept results are in line with expectations. While, Tata Communications rallied 10 percent after turning in black in September-quarter, Bhart Airtel too is ringing loud after its September-quarter operating margins came at 32%, way higher than street expectation. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1096: 1012; while 139 shares remained unchanged.

The BSE Sensex is currently trading at 20967.07 up by 38.06 points or 0.18% after trading in a range of 21037.59 and 20937.12. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.72%.

The gaining sectoral indices on the BSE were Realty up by 1.40%, Healthcare up by 0.82%, Bankex up by 0.58% and Teck up by 0.37%. While, Auto down by 0.52%, Metal down by 0.51%, Oil and Gas down by 0.25%, PSU down by 0.24% and FMCG down by 0.11% were losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.15%, Dr Reddy’s Lab up by 2.73%, ICICI Bank up by 2.51%, BHEL up by 1.98% and HDFC up by 1.31%. On the flip side, Wipro down by 2.12%, M&M down by 1.57%, SSLT down by 1.20%, Tata Power down by 1.05% and ONGC down by 1.02% were the top losers on the Sensex.

Meanwhile, the coal block auction to private firms is likely to get delayed to March next year from December, 2013 as the government has enhanced the action target to 10 blocks from 6 coal blocks planned earlier. Coal Ministry has asked CMPDIL, the mine planning and consultancy company of Coal India, to assess the reserves of four more coal mines and submit its report by the next year. The government wants to allot coal blocks to private players in order to kickstart coal mining in a public-private partnership (PPP) mode in the country. Further, the move will help to enhance country’s coal production for meeting India’s growing coal demand and will also end the monopoly of public sector unit Coal India. In July, the government had earlier allocated 14 coal mines to central and state public sector units, including four to NTPC.

In the previous month, the government 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. According to 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 through the discounted cash flow (DCF) method.

The CNX Nifty is currently trading at 6,233.85 up by 12.95 points or 0.21% after trading in a range of 6,253.65 and 6,222.60. There were 24 stocks advancing against 25 declines while one stock remains unchanged on the index.

The top gainers of the Nifty were Bharti Airtel up by 4.31%, Dr Reddy’s Lab up by 2.70%, ICICI Bank up by 2.59%, Indusind Bank up by 2.05% and BHEL up by 1.87%. On the flip side, Wipro down by 2.14%, M&M down by 1.74%, Tata Power down by 1.48%, SSLT down by 1.27% and ONGC down by 1.15% was the major loser on the index.

Most of the Asian equity indices were trading in green; Taiwan Weighted up by 0.52%, Seoul Composite up by 0.38%, Straits Times up by 0.37%, Nikki 225 up by 1.23%, Shanghai Composite up by 1.30% and Hang Seng up by 1.03%, while Jakarta Composite down by 0.26% and KLSE Composite down by 0.03%.