Local bourses come off their high’s; pares some of the initial gains

After starting the session on a sanguine note, local bourses some of the gains have now withered out on the back of profit booking. On the global front, after bang on performance of the Wall Street with US stocks scoring their best week in two years on strong manufacturing data that eased concerns about slowing growth. Asian Indices too have gained momentum tailing the good US data. Meanwhile, the US future indices too were showing an uptick in the screen trade. However, the momentum still remains positive as the global appetite for risk-taking, which has improved after policymakers approved an emergency tranche of funding for debt-laden Greece, has pumped in strength into the Indian equity markets. Also, performing well are the sugar stocks amid media reports that the Government could in a few days consider the proposal to decontrol the sugar sector. Buzzing hard among them are shares of Bajaj Hindusthan, Shree Renuka Sugar, Balrampur Chini, Sakthi Sugars and Dhampur Sugar. On the BSE Sectoral front, weakness has already entered into Capital Goods stocks while the performance of the rate sensitive counters i.e. Realty, Bankex   and Auto are topping the chart. The 30 share sensitive index-Sensex -after nearing the 1900 level has retreated back to the 18800 levels, while the widely followed 50 share index-Nifty-is gyrating around its 5600 level. Being no different, the broader indices too have cooled off and are holding gains over 0.50%. The overall market breadth on BSE though has come off but still remains in the favour of advances which have outpaced declines in the ratio of 679, while 95 shares remained unchanged. The BSE Sensex is currently trading at 18,868.31, up by 105.51 points or 0.56%. The index has touched a high and low of 18,942.42 and 18,825.34 respectively. There were 24 stocks advancing against just 6 declines on the index.

The broader indices too came off from the high's, inline with benchmarks; the BSE Mid cap and Small cap indices were up by 0.71% and 0.87% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 2.89%, Bankex up by 0.94%, Auto up by 0.87%, FMCg up by 0.80% and PSU was up by 0.72 %. While, CG down by 0.33% was the lone loser on the index.

The top gainers on the Sensex were DLF up by 4.70%, Reliance Infrastructure up by 3.98%, Reliance Communication up by 2.16%, Mahindra & Mahindra up by 1.72% and Sterlite Industries up by 1.65%.

On the flip side, Tata Steel was down by 1.17% , L&T down by 0.80%, Maruti Suzuki was down by 0.57%, Tata Power down by 0.38% and BHEL down by 0.15% were the only losers on the Sensex.

Meanwhile, India's 80% power plants are facing the risk of default because of coal shortage and environmental matters. An organization of power producers had appealed government to form an expert's panel or Empowered Group of Ministers (EGoM) to review the contracts awarded in the competitive bidding route.

'An institutional arrangement (possibly an EGoM or an expert group) may be set up by government to carefully evolve the principles and mechanisms to revisit the contracts, duly holding the developers accountable for aspects in their control, but finding practical ways for treating aspects that are not,' Association of Power Producers Director General Ashok khurana said in the communication to Planning Commission.

Because of fuel shortage and environmental issues, indications have already appeared of power plants defaulting from their current obligation. Recently, Indonesia and Australia had changed their norms for the coal exports. The revised norms have increased the prices of the import of coal from these countries, both accounts for 55% of the nation's coal imports.

The situation is expected to worsen further, with 80% of plants likely to default on account of the shortfall in domestic coal availability; environmental issues involved in captive coal blocks; and change in law/regulations in the coal exporting countries, the note added. From last few years, the situation has changed dramatically because of many developments like an acute coal shortage threatening in the power sector, changes in the norms for coal exporting and environmental issues, and other developments, which demanded a revision at the bidding mechanism.

In 2005, the competitive bidding framework in the power generation was introduced, during the last five years, government electricity distribution companies have contracted more than 42, 000 Mega Watt (MW) capacity through the competitive bidding route.

The Association of Power Producers is a organization representing private power developers companies such as Tata Power, Reliance Power, Adani Power, Lanco Infratech and Essar Power, with almost 1,20,000 MW of power projects in various stages of development and operation under its belt.

The S&P CNX Nifty is currently trading at 5,659.60, higher by 32.40 points or 0.58%. The index has touched a high and low of 5,679.65 and 5,644.85 respectively. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were DLF up by 4.72%, Reliance Infra up by 4.11%, Reliance Communication up by 2.26%, IDFC up by 2.07% and M&M up by 1.76 %.

On the flip side, L&T down by 0.76%, Maruti Suzuki down by 0.71%, NTPC down by 0.43%, Tata Steel down by 0.43% and BPCL down by 0.41% were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was trading flat, Hang Seng surged 1.78%, Jakarta Composite gained 0.84%, KLSE Composite added 0.31%, Nikkei 225 gathered 1.19%, Straits Times rose 0.75%, Seoul Composite was up  by 1.01% and Taiwan Weighted too was up by 0.64%.

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