Benchmarks extend losses on weakness in rupee

Benchmarks have extended their losses in late morning trade amid weak Asian cues, as investors booked profit in financials and selected index heavyweights. Sentiments got dampened by the weakness in rupee which once again seemed approaching 63/$ mark tailing the fall in emerging market currencies, was adding pressure to the markets downtrend. The high fliers of last session, sugar stocks are giving mixed response and some of them have started paring gains as the informal meeting of key UPA ministers to discuss relief measures for sugar mills ended without any decision and the finance minister said that the Cabinet will take a decision next week on the sugar issue.

On the global front, most of Asian markets were trading in red with many of the indices trading lower by about a percent on US concern, as minutes of Federal Reserve October monetary meeting signaled the central bank was on track to slow down its bond-buying program that has boosted the equity markets in the region. Back home, traders were selling in Bankex, Realty and Capital Goods on the BSE. The market breadth on BSE remains negative with advances to declines in the ratio of 634:976. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,800 and 6,150 levels respectively.

The BSE Sensex is currently trading at 20401.55, down by 233.58 points or 1.13% after trading in a range of 20579.26 and 20369.07. There were 5 stocks advancing against 25 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.52% and Small cap index lost 0.29%

The top losing sectoral indices on the BSE were, Bankex down by 1.84%, Realty down by 1.63%, Capital Goods down by 1.29%, FMCG down by 1.09%, and Consumer Durables down by 1.03%, while there were no gainers on the sectoral front.

The top gainers on the Sensex were Gail India up by 0.95%, Hindalco Industries up by 0.87%, Maruti Suzuki up by 0.50%, Wipro up by 0.44%, and Coal India up by 0.37%. On the flip side, Sun Pharma was down by 2.18%, L&T was down by 1.94%, HDFC was down by 1.86%, ICICI Bank was down by 1.79%, and ITC was down by 1.73%, were the top losers on the Sensex.

Meanwhile, Planning Commission Deputy Chairman Montek Singh Ahluwalia has expressed need to hike domestic coal prices citing that energy in India is underpriced, which has led to distortions in domestic energy market. Ahluwalia has said that domestic coal is priced much below imported coal even after adjusting in terms of calorific value, therefore India should align the domestic coal price to international levels.

Stating the need for gradually increasing coal prices, Ahluwalia said that the government's recent decision to pass cost of costlier imported coal to consumers was an absolutely unavoidable move as the rising demand of cheap domestic coal is eroding the energy market. India's energy demand is poised to grow between 6.5-8 percent annually by 2030 as compared to world energy demand at a rate of 1-2 percent per annum in the next 20-30 years.

In spite of 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. Meanwhile, 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. The government is likely to auction 10 coal blocks in the month of March next year.

The CNX Nifty is currently trading at 6,049.55 down by 73.35 points or 1.20% after trading in a range of 6,097.35 and 6,038.30. There were 7 stocks advancing against 43 declines on the index.

The top gainers of the Nifty were Gail up by 0.92%, Hindalco up by 0.54%, Cairn up by 0.53%, Maruti Suzuki up by 0.52%, and Coal India up by 0.48%. On the flip side, Axis Bank down by 3.27%, PNB down by 2.92%, IDFC down by 2.64%, Bank of Baroda down by 2.60%, and Sun Pharma down by 2.20%, were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite lost 22.04 points or 1.00% to 2,184.58, Hang Seng declined by 166.44 points or 0.70% to 23,534.42, Jakarta Composite was down by 39.35 points or 0.90% to 4,311.43, KLSE Composite declined by 7.70 points or 0.43% to 1,790.99, Straits Times was down by 14.68 points or 0.46% to 3,169.55, Seoul Composite lost 23.27 points or 1.15% to 1,993.97 and Taiwan Weighted was lower by 87.45 points or 1.07% to 8,117.01.

On the other hand Nikkei 225 surged by 246.38 points or 1.63% to 15,322.46.