Benchmarks chopping substantial losses trade in proximity to neutral line

Local barometer gauges, after getting a muted start, had chopped significant loss to trade near the neutral line. Supported by stocks from Realty, Power and Fast Moving Consumer Goods (FMCG) counters, BSE’s Sensex, trimmed some loss, to oscillate above the 16850 level. However, stocks from Oil & Gas, Information Technology and Technology counters were mainly deterring sentiment. Meanwhile, the widely followed index, Nifty, also shaving off substantial losses was trading around its neutral line, i.e. near the 5100 bastion. Broader indices, meanwhile, managed to enter the green territory.

On the global front, disappointment could also be witnessed across Asian pacific shares. Asian stocks slipped broadly on Thursday after the Federal Reserve ramped up monetary stimulus by expanding 'Operation Twist' but saddened some investors who had been hoping for more aggressive measures. The US future indices continued to show downtick in the screen trade.

The BSE Sensex is currently trading at 16,876.82, down by 19.81 points or 0.12%. The index has touched a high and low of 16,880.43 and 16,880.43 respectively.  There were 18 stocks advancing against 12 declines on the index.

The broader indices managed to gain some traction; the BSE Mid cap index and Small cap indices captured 0.28% and 0.40% respectively.

Capital Goods up by 1.42%, Realty up by 0.97%, Power up by 0.84%, FMCG up by 0.56% and Public Sector Undertaking up by 0.49% were the top gainers on the BSE sectoral chart. On the flip side, Oil & Gas down by 1.03%, Information Technology down by 0.90%, Technology down by 0.62%, Auto down by 0.31% and Metal down by 0.10% were the losers on the index.

The top gainers on the Sensex were BHEL up by 2.21%, Tata Power up by 1.14%, ONGC up by 1.03%, L&T up by 0.91% and Hero MotoCorp up by 0.78%.

On the flip side, RIL down by 3.20%, TCS down by 1.94%, Hindalco Industries down by 1.47%, Mahindra & Mahindra down by 1.22% and SBI down by 1.13%, were the major losers on the index.

Meanwhile, in an effort to protect the domestic power manufactures such as BHEL from Chinese and Korean companies, the Power Ministry will move a note to the Union Cabinet to charge 21% duty on imported power equipments. Power companies had earlier resisted an increase in duty on equipment import, especially after they have become costlier as the rupee had depreciated by 28% in the past two years.

The levy will compose of 5% basic, 12% countervailing and 4% special additional duty and this plan will be taken into account within the next 20 days. Currently, equipment which is imported for projects less than 1,000 mw capacity is charged 5% customs duty. In response to power ministry’s plan to levy charges, the association of power producer, which represent 24 power companies has urged the government not to impose any charges on imported power equipments as they have become costly after the rupee had depreciated against the dollar.

Ashok Khurana the Director General of Association of Power Producer said that there has been an implicit duty of more than 28% on equipment and machinery imports as against the recommendation 14% duty by Arun Misra Committee.

Due to adverse effect such as low fuel availability, pricing concern, financial difficulties, rupee devaluation and poor financial condition of state run electricity boards have led to an increase in cost of power generation that has left the developers with no option but to run at sub-optimal capacities.

The S&P CNX Nifty is currently trading at 5,118.95, down by 1.60 points or 0.03%. The index has touched a high and low of 5,118.95 and 5,094.60 respectively. There were 29 stocks advancing against21 declines on the index.

The top gainers of the Nifty were BHEL up by 2.26%, DLF up by 1.56%, Siemens up by 1.36%, Tata Power up by 1.35% and BPCL up by 1.27%.

On the flip side, RIL down by 3.27%, Cairn down by 2.40%, Ambuja Cements down by 2.36% TCS down by 2.04% and Hindalco Industries down by 1.55% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite dropped 1.55%, Hang Seng pummeled 0.97%, Jakarta Composite declined 0.96%, Straits Times skid 0.73%, South Korea's Kospi drowned 0.87% and Taiwan Weighted was lower by 0.66%.

On the other hand, Japan's Nikkei up 0.96% was the sole gainer amongst the Asian pack.