Benchmarks add minor gains ahead of F&O expiry

Indian equities added minor gains to continue to trade in green in the late afternoon session on account of buying in frontline counters. The sentiments also got support on data which showed that foreign investors were net buyers for a 19th consecutive session on Wednesday, bringing their total buying to nearly Rs 16,000 crore. Traders were seen piling positions in Consumer Durables, Bankex and Metal stocks while selling was witnessed in Health Care, FMCG and Auto sector stocks. Hectic activity has been noticed in oil marketing companies like HPCL, BPCL and IOC after the Kirit Parikh report has asked the government to free up diesel prices and not to tinker with the current pricing policy. In scrip specific development, Bank of India was trading firm after reporting second quarter (July-September) results where net profit doubled to Rs 622 crore from Rs 302 crore in a year ago period, driven by other income and lower provisions Y-o-Y despite sharp jump in tax expenses. HCL Technologies was trading in green as the company is eyeing $200 billion outsourcing business renewal opportunity that’s going to come up in the next five-years. The market may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. October 2013 series to next month i.e. November 2013 series. The near month October 2013 derivatives contract expires today i.e. October 31, 2013.

On the global front, all 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 above their psychological 6,250 and 21,000 levels respectively. The market breadth on BSE was negative in the ratio of 1138:1167 while 166 scrips remained unchanged.

The BSE Sensex is currently trading at 21082.96, up by 48.99 points or 0.23% after trading in a range of 21110.99 and 20,991.98. There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.04% and Small cap index gained 0.42%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.20%, Bankex up 1.07%, Metal up by 0.97%, PSU up by 0.84% and Capital Goods up by 0.77%. While, Health Care down by 0.49%, FMCG down by 0.27% and Auto down by 0.15% were losing indices on BSE.

The top gainers on the Sensex were SBI up by 3.66%, SSLT up by 2.57%, Bharti Airtel up by 2.10%, Wipro up by 1.92% and RIL up by 1.06%. On the flip side, M&M down by 1.61%, ONGC down by 1.47%, Cipla down by 0.91%, Maruti Suzuki down by 0.86% and HUL down by 0.74% were the top 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 6,272.20, up by 20.50 points or 0.33% after trading in a range of 6,273.60 and 6,235.90. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were Bank of Baroda up by 7.23%, PNB up by 6.71%, JP Associates up by 3.92%, SBI up by 3.66% and IDFC up by 3.51%. On the flip side, Ambuja Cement down by 2.54%, M&M down by 1.57%, ONGC down by 1.49%, ACC down by 1.32% and Cipla down by 1.08% was the major loser on the index.

All the Asian equity indices were trading in red; Taiwan Weighted down by 0.18%, Seoul Composite down by 1.43%, Straits Times down by 0.53%, Nikkei 225 down by 1.20%, Shanghai Composite down by 0.87%, Hang Seng down by 0.42%, Jakarta Composite down by 1.55% and KLSE Composite down by 0.55%.

The European markets were trading in red; France’s CAC 40 was down 0.13%, Germany’s DAX lost 0.17% and UK’s FTSE 100 dropped 0.34%.