Benchmarks remain range bound; trade marginally in green in afternoon session

Indian equity benchmarks continued to trade in narrow range amid volatility, but managed to keep their heads tad above water in afternoon session as buying was witnessed in consumer durables, capital goods and metal stocks. Meanwhile losses in banks, FMCG and healthcare stocks offset the market gain. Investors opted to remain on sidelines on the day of expiry of long and heavy October month’s F&O series and ahead of two important macro- economic indicators- fiscal deficit and core sector data for the month of September scheduled to be release later in the day. Further, fall in rupee value against dollar and weak Asian cues also added to the pessimistic sentiments. On stock specific movement, On stock specific movement, Bharti Airtel, Wipro and RIL were trading up by over 1%, while, ONGC, Dr Reddy’s Lab and Cipla were trading lower by over 1% on BSE. Bharti Airtel, extending its previous day’s 5% rally, is the top Sensex gainer, up nearly 2% on BSE after reported a strong set of operating numbers for the quarter ended September.

On the global front, Asian markets were trading in red with Japanese index Nikkei down by 1.03% as sentiments of global investors were dented after the US Federal Reserve's latest policy outlook was deemed less dovish than some had wagered on, lifting both bond yields and the dollar. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,058 stocks traded, 1,021 stocks advanced, while 876 stocks declined on the BSE.      

The BSE Sensex is currently trading at 21,054.73 up by 20.76 points or 0.10% after trading in a range of 21,071.10 and 20,991.98. There were only 15 stocks advancing against 15 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.67%, while Small cap index up by 0.47%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.24%, Capital Goods up by 0.83%, Metal up by 0.76%, Teck up by 0.51% and Oil and Gas up by 0.35%. While, Bankex down by 0.46%, Healthcare down by 0.22%, FMCG down by 0.18%, Realty down by 0.09% and PSU down by 0.05% were losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.94%, Wipro up by 1.92%, RIL up by 1.30%, Coal India up by 1.15% and BHEL up by 1.04%. On the flip side, ONGC down by 1.44%, Dr Reddy’s Lab down by 1.11%, Cipla down by 1.10%, Gail India down by 1.06% and M&M down by 1.05% were the only losers on the Sensex.

Meanwhile, The planning commission has finalized coal banking mechanism under which two private companies could exchange surplus coal available with them. The proposed mechanism does not involve public sector miner Coal India and stated that if a company starts mining coal from its captive mine before its end-use plant is ready, it can offer that coal to another company whose end-use plant is ready but whose mine is not explored. Meanwhile, to exchange surplus coal available with them, the agreement would have to be agreed commercially by both the companies after seeking approval from the Coal Ministry. Coal banking mechanism will be implemented only after Cabinet approval.

Earlier, public sector miner Coal India Ltd had expressed concerns for implementation of coal banking mechanism under which it will have to receive coal from private miners and commits itself for returning it to them in the future. Coal India reluctance over the mechanism had forced the panel to look at alternative ways to use surplus coal available with the companies. Meanwhile, most of private power producers have been maintaining that Coal India should be the custodian of surplus coal. It is estimated that the country will produce nearly 25 million tonnes of extra coal by 2015-16.

In order to meet India’s growing coal demand, the government will soon invite bids from private players to start coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India. Furthermore, the government has approved the new methodology for auctioning coal blocks for providing upfront and production-linked payments and benchmarking of coal sale prices to ensure greater transparency in auctioning the fully explored coal blocks. The government is likely to auction 10 coal blocks in the month of March next year.

The CNX Nifty is currently trading at 6,254.25 up by 2.55 points or 0.04% after trading in a range of 6,258.55 and 6,235.90. There were 26 stocks advancing against 24 decline on the index.

The top gainers of the Nifty were IDFC up by 2.05%, HCL Tech up by 1.98%, NMDC up by 1.78%, Asian Paints up by 1.78% and Wipro up by 1.72%. On the flip side, Ambuja Cement down by 1.97%, ONGC down by 1.37%, GAIL down by 1.28%, Axis Bank down by 1.26% and Dr Reddy’s Lab down by 1.21% was the major loser on the index.

Most of the Asian equity indices were trading in red; Taiwan Weighted down by 0.18%, Seoul Composite down by 1.43%, Straits Times down by 0.34%, Nikkei 225 down by 1.03%, Shanghai Composite down by 0.67%, Hang Seng down by 0.45%, Jakarta Composite down by 1.70% and KLSE Composite down by 0.47%.