Markets trade near neutral line with positive bias

Indian equity benchmarks continued to trade near the neutral line with positive bias in afternoon session as investors remained concerned over the WPI inflation numbers to be announced later in the day, which will determine the RBI stance on its monetary policy on December 18. Investors also opted to remain on sidelines ahead of the US Fed meet this week. The Federal Reserve meets on Tuesday and Wednesday to discuss tapering its $85 billion monthly bond buying programme. Gain in healthcare, capital goods and IT was offset by the selling witnessed in the oil and gas, metals and auto stocks. IT stocks were trading higher ahead of Federal Reserve meeting as US is the biggest outsourcing market for Indian IT services firms. On stock specific movements, SSLT, Infosys and L&T were trading up by over 1.40%, while, Jindal Steel, Hindalco Inds and Tata Steel down by over 1.30% on BSE.

Among other stocks, AIA Engineering has soared 7% to Rs 483, also its record high on the BSE, after the company said it is augmenting its manufacturing capacity of wear parts from 2,00,000 Mt to 260,000 Mt by brownfield project which is expected to be commissioned in February, 2014. SpiceJet has rallied over 10% at Rs 17.30 after the company said it has signed a three-year interline agreement with Tigerair, Singapore’s largest budget airline, to pave the way for greater connectivity between flights operated by both carriers.

On global front, Asian markets were trading in red Nikkei 225 down by 1.65% and Taiwan Weighted down by 0.75% amid rising concerns over the US Fed tapering programme.

Back home, the NSE Nifty and BSE Sensex were trading down their psychological 6,200 and 20,000 levels respectively. The market breadth on BSE was positive, out of 2,057 stocks traded, 964 stocks advanced, while 943 stocks declined on the BSE.  

The BSE Sensex is currently trading at 20,739.46 up by 23.88 points or 0.12% after trading in a range of 20,764.52 and 20,667.02. There were only 11 stocks advancing against only 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index up by 0.32%.

The gaining sectoral indices on the BSE were Healthcare up by 0.22%, Capital Goods up by 1.15%, IT up by 0.85%, Teck up by 0.80% and Bankex up by 0.50%. While, Oil and Gas down by 0.85%, Metal down by 0.39%, Auto down by 0.27% and FMCG down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were SSLT up by 2.19%, Infosys up by 1.97%, L&T up by 1.43%, ICICI Bank up by 1.40% and BHEL up by 0.74%. On the flip side, Jindal Steel down by 2.69%, Hindalco Inds down by 1.64%, Tata Steel down by 1.37%, ONGC down by 1.27% and M&M down by 1.15%.

Meanwhile, Concerned over acute liquidity crunch faced by the Indian fertiliser sector, the Fertiliser Ministry has sought an additional Rs 10,000 crore from the government as the Department of Fertiliser (DoF) did not get funds under the first supplementary grants and second supplementary grants would be made available only in December. So far this fiscal, the government has allocated Rs 70,586 crore funds to Department of Fertiliser (DoF) as against the total demand of Rs 1,05,497 crore for the 2013-14 fiscal. Commodity wise, a subsidy of Rs 41,158.85 crore was allocated for urea and Rs 29,426.88 crore for P&K fertilisers. The DoF has been able to pay subsidy dues till May to fertiliser firms manufacturing urea locally, while for non-urea fertilizers, it can pay subsidy only till this month.

Non-allocation of subsidy fund to fertilizer industry on time has left it with no money to pay subsidy bills for the third and fourth quarters of the financial year ending in March 2014. IFFCO, country's largest producer of urea, may witness decline in its profitability by 50 per cent in the current financial year due to a pending subsidy payment of about Rs 4,500 crore, while, state-run National Fertilisers Ltd (NFL) and Madras Fertilisers Ltd (MFL) could face closure by the end of this month due to liquidity crisis.

Earlier in September, the Finance ministry had agreed to pay only Rs 5,500 crore subsidy under a special banking arrangement (SBA) as against Rs 12,000 crore sought by the Department of Fertilisers (DoF). Meanwhile, in order to boost the fertilizer sector, the government has taken measures. The government agreed to bear interest of 8 per cent per annum with 2.7 per cent interest to be borne by the industry. Furthermore, it is also considering an additional Rs 10,000 crore more under the special banking arrangement against the subsidy due for the current year. Regarding the gas availability to fertilizer sector, the government has recently stated that the gas allocation policy will be revised to remove the cap imposed on the supply of domestic gas to fertiliser sector and accorded priority for gas utilisation policy 2008 in order to make new investments in the sector.

The CNX Nifty is currently trading at 6,174.20 up by 5.80 points or 0.09% after trading in a range of 6,183.25 and 6,152.90. There were 19 stocks advancing against 31 declining on the index.

The top gainers of the Nifty were SSLT up by 2.24%, Infosys up by 1.96%, IDFC up by 1.64%, ICICI Bank up by 1.56% and L&T up by 1.49%. On the flip side, Jindal Steel down by 2.79%, BPCL down by 2.32%, Ambuja Cement down by 2.10%, Hindalco Inds down by 1.56% and Ultra Tech Cement down by 1.43% were the major losers on the index.

The Asian equity indices were trading in red; Hang Seng down by 0.50%, Nikkei 225 down by 1.65% and Taiwan Weighted down by 0.75%, KLSE Composite down by 0.25%,  Seoul Composite down by 0.09%, Straits Times down by 0.38%, Jakarta Composite down by 0.89% and Shanghai Composite down by 1.49%.