Domestic markets trade cautiously on F&O expiry day

Indian equity benchmarks are trading slightly lower as investors remained on sidelines on the day of expiry of long and heavy October month’s F&O series. Global cues too remained week with the US markets ending lower after getting some weak economic numbers, though as expected the Fed maintained the pace of its asset purchases at $85 billion a month but its statement with the policy were less dovish and excluded any reference to the recent government shutdown. Moreover, all the Asian equity benchmarks, barring Japanese Nikkei, were trading in the red at this point of time, dampening the sentiments.

Back home, sentiments also remained dampened after the rupee weakened in early trade due to dollar demand from importers on the last day of the month. However, losses remained capped as investors continued buying public sector oil marketing companies viz. BPCL, HPCL and IOC after the recommendations of expert panel headed by former Planning Commission member Kirit S Parikh who has suggested that Diesel prices should be hiked by a steep Rs 5 per litre, kerosene by Rs 4 a litre and cooking gas (LPG) rates by Rs 250 per cylinder immediately to cut fuel subsidy bill by Rs 72,000 crore. Sentiments also got some boost after Reserve Bank Governor Raghuram Rajan said that India now is in a better position to face the US Federal Reserve’s unwinding of its easy money policy whenever it takes place.

On the sectoral front, consumer durables witnessed the maximum gain in trade followed by capital goods and metal, while healthcare, banking and realty remained the top losers on the BSE sectoral space. The broader indices, however, outperforming benchmarks, while the market breadth on the BSE was positive; there were 704 shares on the gaining side against 467 shares on the losing side while 56 shares remain unchanged.

The BSE Sensex opened at 21000.60; about 33 points lower compared to its previous closing of 21033.97, and has touched a high and a low of 21066.41 and 20991.98 respectively. The index is currently trading at 21028.86, down by 5.11 points or 0.02%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a strong start with 57.38% stocks advancing against 38.06% declines. The broader indices were trading in green; the BSE Mid cap up by 0.52% and Small cap indices up by 0.50%. 

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.28%, Capital Goods up by 0.75%, Metal up by 0.57%, Auto up by 0.46% and Teck up by 0.38%, while Health Care down by 0.52%, Bankex down by 0.49%, Realty down by 0.32%, PSU down by 0.21% and FMCG down by 0.19% were the top losers on the sectoral index.

The top gainers on the Sensex were Bharti Airtel up by 2.03%, Tata Motors up by 1.45%, SSLT up by 1.34%,  Wipro up by 1.19% and Tata Steel up by 0.95%. On the flip side, ONGC was down by 1.37%,  Mahindra & Mahindra was down by 1.13%, Hindustan Unilever was down by 0.92%, Dr Reddys Lab was down by 0.90% and ICICI Bank was down by 0.72% 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 opened at 6,237.15; about 14 points lower as compared to its previous closing of 6,251.70, and has touched a high and a low of 6,255.20 and 6,235.90 respectively. The index is currently trading at 6,243.00, down by 8.70 points or 0.14%. There were 19 stocks advancing against 30 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were Bharti Airtel up by 1.99%, Tata Motors up by 1.50%, SSLT up by 1.34%, Asian Paints up by 1.33% and HCL Tech up by 1.13%. On the flip side, Ambuja Cements down by 1.63%, Dr. Reddy's Laboratories down by 1.51%, ONGC down by 1.47%, ACC down by 1.18% and Lupin down by 1.06% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 14.74 points or 0.68% to 2,145.72, Hang Seng dipped 92.41 points or 0.40% to 23,211.61, Jakarta Composite slumped 74.57 points or 1.63% to 4,500.31, KLSE Composite shed 8.56 points or 0.47% to 1,808.82, Straits Times slipped 6.59 points or 0.20% to 3,223.85, Seoul Composite contracted 14.03 points or 0.68% to 2,045.55 and Taiwan Weighted was down by 8.47 points or 0.10% to 8,456.59.

On the flip side, Nikkei 225 was up by 2.41 points or 0.02% to 14,504.76.