Benchmarks recoup portion of losses on bargain-buying activities

Benchmarks have trimmed some portion of their early losses on initiation of bargain buying activities by select traders and also with some support creeping in at lower levels that took the markets higher from day’s low point. Barometer gauges, specifically Nifty took a turn for the worse after multiple trades were placed shorting index futures, while Sensex simply followed the suite. Among, the top losers, stocks from Realty, Capital Goods and Information Technology counters weighed maximum pressure on local equity markets. Shares of IT companies fall after global rival, Cognizant Technology Solutions Corp forecasted 2014 revenue below street's expectations on Wednesday, raising concerns about the sector's growth prospects. Off days low, Sensex was trading above the crucial 20,100 and Nifty little shy of the crucial 6,000 level, with loss of close to half a percent. Meanwhile, broader indices were showing mixed trend, with Smallcap index showing degree of outperformance and trading with gains of over two tenths of a percent.

On the global front, Asian shares took a tentative step forward from five-month lows on Thursday, with investors hoping the European Central Bank (ECB) and upcoming U.S. jobs data can calm nerves strained by the emerging market selloff.

Closer home, investors in early deals to some extent drew comfort from the fact that government had cancelled its previously deferred bond sale of Rs 15,000 crore, which hinted at latter’s confidence of achieving fiscal deficit target of 4.8 percent of GDP for 2013-14. Nevertheless, support was still being rendered to bourses from stocks belonging from Metal and Fast Moving Consumer Goods counters which were the top gainers of the session. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 981:819; while 30 shares remained unchanged.

The BSE Sensex is currently trading at 20180.85, down by 80.18 points or 0.40% after trading in a range of 20,358.19 and 20079.82. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices continued trading mixed; the BSE Mid cap index was down by 0.03%, while Small cap index up by 0.21%.

The gaining sectoral indices on the BSE were Metal up by 0.13% and FMCG up by 0.08%. While, Realty down by 1.30%, Capital Goods down by 1.02%, IT down by 0.57%, Banking down by 0.55% and TECk down by 0.35% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Power up by 3.29%, Coal India up by 2.57%, Hindustan Unilever up by 2.24%, Wipro up by 1.10% and Tata Steel up by 0.97%. On the flip side, BHEL down by 2.80%, ICICI Bank down by 1.51%, HDFC down by 1.27%, L&T down by 1.11% and TCS down by 1.10%.

Meanwhile, amid concerns over the rising fossil fuels subsidy burden on the government, Economic Affairs Secretary Arvind Mayaram has stated that India cannot afford fuel subsidy in the long run. Mayaram added that no country can sustain subsidy in perpetuity for anything and country’s growth business model will fail in future if it includes huge subsidy burden. Recently, the government has increased the LPG subsidy quota of cheaper cooking gas cylinders to 12 per household from 9 in a year that would raise the government's subsidy burden by around Rs 5,000 crore.

Currently, India is fourth largest consumer of energy, however, there are a large number of Indians having no access to energy. India is likely to become world's third largest energy consumer by 2020 and adequate energy supply at affordable price is critical for economic growth. At present, India imports around 80 percent of its oil needs and 25 percent of natural gas domestic demand. On domestic production front, India is currently world's seventh largest energy producer accounting for around 2.5 percent of world's total annual energy production. While, there is a need to increase its energy supply by 3 to 4 times over the next two decades to meet the growing country’s demand.

Presently, only 0.93 million sq km area in India is held under exploration and production in 19 basins as compared to total estimated sedimentary area of 3.14 million sq km, comprising 26 sedimentary basins. Meanwhile, Oil Ministry has formulated a roadmap for cutting India's dependence on imports to meet its energy needs. The Ministry wants domestic crude oil demand to be cut to 50 percent by 2020 and by 25 percent in 2025 through intensive exploration and exploitation of untapped reserves.

The CNX Nifty is currently trading at 5,995.25 down by 27.15 points or 0.45% after trading in a range of 6,048.35 and 5,965.40. There were 14 stocks advancing against 36 declining on the index.

The top gainers of the Nifty were Tata Power up by 3.36%, Coal India up by 2.55%, HUL up by 2.18%, Bank of Baroda up by 1.41% and NMDC up by 1.18%. On the flip side, JP Associates down by 2.96%, BHEL down by 2.95%, DLF down by 1.96%, Kotak Bank down by 1.70% and ICICI Bank down by 1.58% were the major losers on the index.

The Asian equity indices were trading in green; Seoul Composite up by 0.88%, Nikkei Straits Times up by 0.87%, KLSE Composite up by 0.26%, Jakarta Composite up by 0.46%, Hang Seng up by 0.61% and Taiwan Weighted up by 0.56%. On the flip side, Nikkei 225 down by 0.18% was the only loser amongst Asian pack.