Benchmarks trade near day’s low; PNB’s results disappoint

Indian equity markets have magnified their losses on account of ferocious selling pressure mainly witnessed in stocks from Consumer Durables, Oil & Gas and banking counters, which have dragged the benchmarks to day’s lowest point in absence of any positive trigger. Further, negative regional cues also have been providing fodder to bears right from the start of trade. In the global market, Asian shares have slumped to a three-week low on Friday after Wall Street suffered its biggest fall in more than two months, while a surprise interest rate cut by the European Central Bank underscored the fragility of the global economy. Closer home, disappointing results from Punjab National Bank (PNB) also is adding to the somber mood of the markets. Both, Sensex and Nifty, trading with a cut of over half a percent, are languishing below the crucial 20,700 and 6,150 levels respectively. Meanwhile, broader indices too are trading downbeat albeit with lesser losses.

On the result front, Punjab National Bank shares tanked over 4% after the bank reported a sharp rise in bad loans in the September quarter belying hopes that the worst might be over for India's state-run lenders. The bank’s net profit plunged by 52.6 percent year-on-year to Rs 505.5 crore - the lowest in last six years, dented by higher provisions on depreciation in investment. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1198:890; while 128 shares remained unchanged.

The BSE Sensex is currently trading at 20676.96, down by 145.81 points or 0.70% after trading in a range of 20,821.01 and 20644.95. There were 8 stocks advancing against 22 declining on the index.

The broader indices too continued to reel under pressure; the BSE Mid cap and Small cap indices were trading lower by 0.20% and 0.35% respectively.

The gaining sectoral indices on the BSE were Healthcare up by 0.39%, Metal up by 0.09%, FMCG up by 0.07% and IT up by 0.01%.While, Consumer Durables down by 1.97%, Oil and Gas down by 1.18%, Bankex down by 1.02%, PSU down by 0.72%, and Auto down by 0.62% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.53%, Tata Motors up by 0.63%, Dr Reddy’s Lab up by 0.62%, SSLT up by 0.58% and Cipla up by 0.31%. On the flip side, HDFC down by 3.04%, Maruti Suzuki down by 2.77%, ONGC down by 1.87%, Coal India down by 1.76% and Gail India down by 1.56% were the top losers on the Sensex.

Meanwhile, amid rising concerns over the low domestic coal production, Coal Secretary S K Shrivastava said that lack of adequate transportation infrastructure has been impacting India’s coal production. Despite the 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.

S K Shrivastava further said that if transportations issues are addressed, through extending more railway lines to coal-rich areas such as Chhattisgarh and Jharkhand, domestic coal production can be increased to 50-60 million tonnes by the end of the 12th five year plan and 200-250 million tonnes by the end of the 13th plan. Meanwhile, coal secretary said that coal ministry is in talks with the Indian Railways to end these transportation woes.

Presently, Coal India is the only producer of domestic coal, which is also struggling to meet domestic requirement. 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. Meanwhile, in order to meet India’s growing coal demand, the government has planned to 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. The government is likely to auction 10 coal blocks in the month of March next year.

The CNX Nifty is currently trading at 6,142.55 down by 44.70 points or 0.72% after trading in a range of 6,185.15 and 6,132.50. There were 14 stocks advancing against 36 declining stocks on the index.

The top gainers of the Nifty were HCL Tech up by 1.95%, Tata Steel up by 1.65%, Lupin up by 1.31%, SSLT up by 0.78% and Tata Motors up by 0.53%. On the flip side, PNB down by 4.96%, HDFC down by 3.21%, Axis Bank down by 3.15%, Maruti Suzuki down by 2.62% and ACC down by 2.44% were the major loser on the index.

The Asian equity indices were trading in red; Straits Times down by 0.72%, KLSE Composite down by 0.11%, Jakarta Composite down by 0.39%, Taiwan Weighted down by 0.65%, Shanghai Composite down by 1.09%, Nikkei 225 down by 1.00%, Hang Seng down by 0.59%, and Seoul Composite down by 0.96%.