Benchmarks continue firm trade in late afternoon session

Benchmarks pare minor gains but continued to trade in green in the late afternoon session on account of profit booking at higher levels. The sentiments were on an optimistic note from the early trades after rating agency Moody’s reported that fall in high current account deficit (CAD) limits India's vulnerability to global financial market volatility. Traders were seen piling positions in Capital Goods, Power and Bankex while selling was witnessed in HealthCare, IT and TECK sector stocks. In scrip specific development, Talwalkars Better Value Fitness was trading firm on reports that UK’s health and fitness group The David Lloyd has begun talks with the management of the company to acquire around 20 percent stake. Aviation stocks like Jet Airways and SpiceJet was trading firm after RBI extended the deadline for raising working capital via external commercial borrowings by domestic airlines to March 2015 from December 2013. The markets may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near-month i.e. March 2014 series to next month i.e. April 2014 series. The near-month March 2014 F&O contract expires today i.e. March 27, 2014.

On the global front, most of the Asian markets were trading in green, while the European markets were trading on a pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,600 and 22,100 levels respectively. The market breadth on BSE was positive in the ratio of 1621:1005 while 160 scrips remained unchanged.

The BSE Sensex is currently trading at 22159.39, up by 64.09 points or 0.29% after trading in a range of 22222.17 and 22094.29. There were 19 stocks advancing against 11 declining ones on the index.

The broader indices continue to outperform the benchmarks; the BSE Mid cap index was up by 0.69%, while the Small cap index gained 0.96%.

The top gaining sectoral indices on BSE were, Capital Goods was up by 1.17%, Power up by 1.08%, Bankex up by 1.03%, Consumer Durables up by 1.01% and PSU up by 0.97%. On the other hand, HealthCare down by 1.14%, IT down by 0.65% and TECK down by 0.22% were the losers on the sectoral front.

The top gainers on the Sensex were SBI up by 3.89%, Bharti Airtel up by 3.43%, Hero MotoCorp up by 2.27%, BHEL up by 2.13% and NTPC up by 1.57%. On the flip side, Dr. Reddy’s Lab was down by 2.05%, ONGC down by 1.81%, Sun Pharma down by 1.67%, TCS down by 1.00% and Tata Motors down by 0.90% were the top losers on the Sensex.

Meanwhile, in order to bring transparency in tainted coal sector of the country, the government has set up coal regulator. The coal regulator will advise the government on principles and methodologies for coal price determination, whereas state-owned Coal India (CIL) will continue to fix prices, subject to the coal ministry’s approval.

The function of the coal regulator includes formulation of principles and methodologies for determination of price of raw coal, washed coal or any other byproduct of washing. Apart from that, the regulator will suggest the government on allocation of reserves, procedures for sampling and standards of performance without venturing in matters relating to mines safety and environmental issues. Further, the coal regulator will give advice regarding development of mining technologies, promoting competition, efficiency and economy in the activities of the coal industry, promotion of investment, beneficiation methods and conservation of coal resources. The regulator will comprise of a chairperson and four members, which will be selected on the recommendations of a six-member committee, headed by the Cabinet secretary.

The need to set up a coal regulator emerged when the lack of transparency in grant of reserves led to a controversy over the alleged favourable allocations causing a notional loss of Rs 1.86 lakh crore to the government. Coal regulator will ensure greater transparency in auctioning the fully explored coal blocks and will also enable the government to allot coal mining licences through competitive bidding. Further, domestic coal production is also expected to increase after the formation of coal regulator. 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 overseas countries.

The CNX Nifty is currently trading at 6,627.80, up by 26.40 points or 0.40%, after trading in a range of 6,646.20 and 6,599.50. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were IDFC up by 4.56%, SBI up by 3.89%, PNB up by 3.59%, Bharti Airtel up by 3.50% and BPCL up 3.10%. On the flip side, Dr. Reddy’s Lab was down by 2.02%, ONGC down by 1.88%, Sun Pharma down by 1.76%, Grasim down by 1.60% and Tata Motors was down 1.27% were the top losers on the index.

Most of the Asian indices barring the mainland Chinese indices were trading in green; Jakarta Composite was up by 0.59%, KLSE Composite up by 0.14%, Nikkei 225 surged by 1.01%, Straits Times was higher by 0.67%, Seoul Composite gained 0.70% and Taiwan Weighted was higher by 0.48%.

On the other hand Shanghai Composite was down by 0.83% and Hang Seng was lower by 0.24%.

The European markets were trading in red; France’s CAC 40 was down 0.47%, Germany’s DAX lost 0.37% and UK’s FTSE 100 dropped 0.54%.