Indian equities trim gains to trade below neutral line

Indian equities pared off gains to continue its weak trade below neutral line in the late afternoon session on back of selling in the frontline blue chip counters. The markets which resiliently weathered the disappointing start of the earnings season for fourth quarter post the discouraging earnings and guidance by index bellwether Infosys; have flattened out completely in red. The key gauges could not capitalize the gains since sentiments in the local markets got influenced by the weak European market. Traders were seen piling up position in Health Care, Auto and FMCG sector while selling was witnessed in IT, TECk and Bankex sector. Besides, investors showed buying in rate sensitive counters amid hopes of an imminent interest rate cut and start of a monetary easing cycle by India’s central bank at its Monetary and Credit Policy meet on April 17, 2012. Infosys, TCS, Wipro and HCL Technologies from IT counter were seen trading weak exerting pressure on the markets. ICICI Bank, Axis Bank, HDFC Bank and PNB, from Banking counters were seen trading weak in red pulling the markets down. Industry heavyweight RIL was seen trading firm in green giving the much needed support. In the scrip specific development, shares of IT companies like Infosys, TCS, Wipro, Polaris Financial Technology, HCL Tech, Oracle Financial and Tech Mahindra were down after bellwether Infosys gave a FY13 guidance that was below market expectations. Gemini Communications was trading firm in green on reports that the company is going to buyback 66.18 lakh shares at maximum Rs 45 per share.

On the global front, Asian markets were trading in green while the European markets were trading in red on pessimistic note. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,200 and 17,100 levels respectively. The market breadth on BSE was in favor of advances in the ratio of 1348:1303 while 142 scrips remained unchanged.

The BSE Sensex is currently trading at 17,102.24 down by 230.38 points or 1.33% after trading as high as 17,398.22 and as low as 17,027.30. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading on a weak note; the BSE Mid cap index lost 0.12% while Small cap declined 0.09%.

On the BSE sectoral space, Health Care up 1.02%, Auto up 0.67%, FMCG up 0.28%, Metal up 0.20% and PSU up 0.10% were the major gainers, while IT down 7.64%, TECk down 5.95%, Bankex down 0.75%, Consumer Durables down 0.38% and Capital Goods down 0.26% were the top laggards in the space.

Coal India up 2.31%, Hero MotoCorp up 2.10%, Sun Pharma up 2.10%, Tata Motors up 1.30% and GAIL India up 1.28% were the major gainers on the Sensex, while Infosys down 10.32%, TCS down 5.34%, Wipro down 4.82%, ICICI Bank down 1.73% and Hindalco Industries down 1.13% were the major losers in the index.

Meanwhile, power generation has expanded by 6% in the month of March. The increase has come despite 25 thermal power stations are operating with coal stock of less than four days.

As per Central Electricity Authority data, power generation in March increased by 6.39% to 2,550 million units as against the programmed 2,397 million units. Thermal power generation alone witnessed a rise of 6.7% at 2,211 million units against the programmed 2,072 million units. On the other hand, the fuel stock position at the thermal power stations remained strained with less than four days of reserves at 25 plants and less than seven days stock at 30 power stations.

As per the government officials coal stock is not the only reason effecting power supply. There are many more factors contributing to the increase in power, coal supply being one of them. Moreover it isn’t that power companies do not have coal. The lesser supply is affecting the utilization capacity of the plant however is not shutting it down.

The Power Ministry has set a target of generating 9,20,000 million units of electricity this year, of which over 1,50,000 million units is expected to come from the private sector alone. It has plans to add over 7,60,000 million units of coal-based power during 2012-13. The government would add over 1,22,000 million units of hydel power during 2012-13, of which nearly 60,000 million units would come from the northern part of the country. It would also import over 5,000 million units of hydro power from Bhutan to bridge the shortfall.

The S&P CNX Nifty is currently trading at 5,220.20, lower by 56.65 points or 1.07% after trading as high as 5,306.75 and as low as 5,185.40. There were 25 stocks advancing against 23 declines while 2 stocks remained unchanged on the index.

The top gainers on the Nifty were Coal India up 2.63%, Hero MotoCorp up 2.05%, Sun Pharma up 1.85%, Grasim Industries up 1.61% and Dr. Reddy’s Lab up 1.60%.

Infosys down 10.56%, TCS down 5.73%, Wipro down 4.66%, HCL Tech down 2.55% and IDFC down 1.81% were the major losers on the index.

In the Asian space, Shanghai Composite advanced 0.35%, Hang Seng soared 1.84%, Jakarta Composite added 0.21%, Nikkei 225 surged 1.19%, Straits Times climbed 0.53%, Seoul Composite rose 1.12% and Taiwan Weighted jumped 1.64%.

The European markets were trading in red as France’s CAC 40 declined 1.08%, Germany’s DAX slipped 0.95% and Britain’s FTSE 100 fell 0.47%.