Benchmarks continue to trade weak on Fed tapering concerns

Benchmarks continued their downtrend for the fifth day in the late morning trade on Fed tapering concerns after better-than-expected U.S. jobs data. Investor’s sentiments remained dampened after the government put investments from Cyprus under tax lens. The Finance Ministry has named Cyprus as a notified jurisdictional area with a view to check tax evasion as it was not providing the information requested by tax authorities under exchange of information provisions of the double taxation avoidance pact. A weakening rupee which again breached the 63 mark against the dollar also added pessimistic sentiments. The rupee was trading 60 paise down at Rs 63.07 a dollar.

On the global front, Asian markets were showing a mixed trade in late morning, there was some recovery from the early session’s fall but still majority of the indices were in flat territory. Chinese markets were marginally in red, though the Hong Kong market has recovered as the China’s industrial output rose a more-than-estimated 10.3 percent from a year earlier in October, while October inflation was a less-than-forecast 3.2 percent, producer prices fell 1.5 percent from a year earlier and retail sales rose 13.3 percent. Back home, traders were buying, IT, Teck and Healthcare while selling were seen in Capital Goods, Realty and Bankex on the BSE.

The market breadth on BSE remains negative with advances to declines in the ratio of 825: 897. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,500 and 6,000 levels respectively.

The BSE Sensex is currently trading at 20532.04, down by 134.11 points or 0.65% after trading in a range of 20623.83 and 20482.41. There were 7 stocks advancing against 23 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.42% and Small cap index lost 0.14%

The top gaining sectoral indices on the BSE were, IT up by 1.08%, Teck up by 0.81% and Healthcare up by 0.30%, while Capital Goods down by 2.29%, Realty down by 2.14%,  Bankex down by 1.90%, Auto down by 1.56% and PSU down by 1.42% were the top losers on the sectoral index.

The top gainers on the Sensex were TCS up by 1.83%, Dr Reddys Lab up by 1.33%, Infosys up by 0.55%, Wipro up by 0.35% and Cipla up by 0.15%. On the flip side, L&T was down by 3.04%, Hero MotoCorp was down by 2.39%, Tata Motors was down by 2.03%, Mahindra & Mahindra was down by 1.87%, HDFC Bank was down by 1.82% were the top losers on the Sensex.

Meanwhile, The Parliamentary Standing Committee on Petroleum and Natural Gas has recommended that the petroleum and natural gas producing states of the country should given at least 50 percent of the total quantity produced besides the royalty on natural gas produced from offshore fields.

The panel, in its report has noted that during 2012-13, the total gas production was 40.7 billion cubic metres, of which the share of private/ JV in the KG basin located in Coastal area adjoining Andhra Pradesh was 13.7 billion cubic metres representing around 30 percent of the total natural gas production of the country. However, the allocation to Andhra Pradesh was pegged at just 29.02 mmscmd in 2012-13 out of the total allocation of 216.27 mmscmd, which was less than 15 percent. If the panel's proposal is accepted, will boost Andhra Pradesh Government’s revenues and economic activity on the back of state’s major chunk of oil and gas fields in the country.

Highlighting that the cost incurred due to the transportation of gas to far off places is causing price escalation, the panel’s report said that industries in the states and in the neighbouring regions should be given priority in the matter of allocation gas. Ministry of Petroleum and Natural Gas (MOPNG) to supply at least 50 percent of the gas produced to the industries belonging to the state where the fields are located, committee recommended.

Referring to the royalty on gas produced from offshore fields, the committee felt that the present New Exploration Licensing Policy (NELP) has put the states in disadvantageous position as they are being deprived of royalty arising out of the production of natural gas. Presently, the royalty from the production of deep water goes only to Central Government as all resources which are on the offshore areas belonging to the Centre. Thus, the committee recommended that the MOPNG should device a policy for sharing the royalty earned from the offshore areas also with the State Governments concerned.

The CNX Nifty is currently trading at 6,097.30 down by 43.45 points or 0.71% after trading in a range of 6,121.35 and 6,070.85. There were 11 stocks advancing against 39 declines on the index.

The top gainers of the Nifty were Cairn up by 7.60%, TCS up by 1.93%, HCL Tech up by 1.48%, Dr. Reddy's Laboratories up by 1.30% and Infosys up by 0.50%. On the flip side, Indusindbk down by 4.48%, L&T down by 3.44%, BPCL down by 3.41%, DLF down by 3.28%, and Axis Bank down by 3.22% were the major losers on the index.

The Asian equity indices were trading in mixed; Shanghai Composite was down by 3.33 points or 0.16% to 2,102.79, Jakarta Composite was down by 30.95 points or 0.69% to 4,445.77, Seoul Composite was down by 9.28 points or 0.47% to 1,975.59 and Taiwan Weighted lost 42.75 points or 0.52% to 8,186.84. while Hang Seng was up by 28.05 points or 0.12% to 22,772.44, KLSE Composite gained 0.64 points or 0.04% to 1,805.12, Nikkei 225 surged by 143.67 points or 1.02% to 14,230.47 and Straits Times added 6.19 points or 0.19% to 3,183.44.