Benchmarks trade flat after a firm start

The Indian equity markets have made a strong start on the back of supportive global cues but the benchmarks lost its day's high and trading on a flat note. The global cues remained supportive as the US markets made a positive start of the week and all the major indices were able to post modest gains while, all the Asian counterparts were trading in the positive terrain at this point of time. Back home, on the sectoral front, fast moving consumer goods witnessed the maximum gain in trade followed by banking and technology while, realty, capital goods and consumer durables remained the top losers on the BSE sectoral space. Meanwhile, textile companies like, Arvind, Alok Industries, Vardhman Textiles all edged higher in the trade on announcement that government is all set to approve 25 textile parks in the current financial year, in order to boost development and investment in the sector. The broader indices too were trading on a flat note. GTL and GTL Infra were trading with a gain of over six percent after a sharp fall in the previous session while, Indiabulls Real Estate slumped four per cent after the company was asked to stop work at some of its projects because of lack of environmental clearance. The market breadth on the BSE was evenly divided; there were 857 shares on the gaining side against 804 shares on the losing side while 86 shares remained unchanged.

The BSE Sensex opened at 17,574.37; about 68 points higher compared to its previous closing of 17,506.63, and has touched a high and a low of 17,642.77 and 18,507.10.

The index is currently trading at 17,519.99, up by 13.36 points or 0.08%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has divided equally with 49.06% stocks advancing against 46.02% declines. The broader indices too were trading flat; the BSE Mid cap index was down by 0.04% while, Small cap index was up by 0.06%. 

The top gaining sectoral indices on the BSE were, FMCG up by 0.30%, Bankex up by 0.26%, TECk up by 0.18%, Auto up by 0.15% and IT up by 0.12%. While, Realty down 1.96%, CG down 0.62%, CD down 0.61%, Power down 0.61% and PSU down by 0.29% remained the top losers on the index.

The top gainers on the Sensex were Tata Motors up by 1.04%, Bharti Airt up by 0.94%, RIL up by 0.78%, Hero Honda up by 0.66% and ITC up by 0.62%.

Jaiprakash Associates down by 2.22%, BHEL down by 2.19%, ONGC down by 2.19%, DLF down by 1.60% and Cipla down by 1.12%, were the top losers on the index.

Meanwhile, the power sector, perturbed due to demand-supply gap of coal, may face trouble in its coal imports. The major coal exporter Indonesia has made recent policy change which mandates all coal exporters to sell coal at market prices. Due to rise in demand of coal from India and China, another major coal exporter Australia may follow this move or restrict the exports.

This will affect the private producers as they operate power plant on imported coal due to Indian government's priority based allocation. These private producers, who are allowed to import only 30% coal, are already importing it at higher prices as compared to what is being offered by domestic major distributor Coal India (CIL). The Reliance Powers 4,000-MW Krishnapatnam Ultra Mega Power projects (UMPP) is facing road block for the similar reason as the plants coal requirement is fulfilled by Indonesia and such change in policy has become a road block for this UMPP.

This will not only affect the growth of power sector but also may lead to rise in the electricity prices thereby affecting the inflation troubled Indian economy. The various factors affecting the power sectors growth has already moved away the FDI. The delay from environment ministry in approving the captive blocks is further widening the demand-supply gap. This is also one of the major reasons for delay in ambitious UMPP of Indian government.

The power minister is expected to discuss this issue with the Prime Minister Manmohan Singh. Energy produced with the help of coal contributes to 66% of the total electricity supply. Also, gas has made lower than expected contribution and has not been of much help to the economy.

The S&P CNX Nifty opened at 5,280.80; about 23 points higher compared to its previous closing of 5,257.90, and has touched a high and a low of 5,297.25 and 5,258.30 respectively.

The index is currently trading at 5,264.40, up by 6.50 points or 0.12%. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were Cairn up by 1.27%, Reliance Industries up by 1.07%, Bharti Airtel up by 1.04%, Tata Motors up by 0.99% and HDFC Bank up by 0.90%.

The top losers of the index were ONGC down by 2.77%, BHEL down by 2.23%, JP Associates down by 2.22%, DLF down by 1.78% and HCL Tech was down by 1.68%.

All the Asian markets were trading in the green; Shanghai Composite was up 5.73 points or 0.22% to 2,626.98, Hang Seng was up 68.72 points or 0.32% to 21,668.23, Jakarta Composite was up 24.54 points or 0.66% to 3,753.66, KLSE Composite was up 0.15 points or 0.01% to 1,559.34, Nikkei 225 was up 32.82 points or 0.35% to 9,387.14, Straits Times was up 19.05 points or 0.63% to 3,032.65, Seoul Composite was up 6.85 points or 0.34% to 2,026.50 and Taiwan Weighted was up 15.23 points or 0.18% to 8,545.91.

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