Indian equity benchmarks, after witnessing a bout of volatility in initial trade, are trading slightly higher in early deals on Wednesday. Investors remained cautious as rise in CPI numbers announced after the market hours, has dashed hopes of any rate cut for India Inc. The inflation concern is likely to linger further with a private forecast that India should prepare for below normal rainfall in the crucial monsoon season this year, particularly in the agriculturally significant north-western and western central regions. Meanwhile, foreign institutional investors (FIIs) sold shares worth a net Rs 21.63 crore on April 15, 2014, as per provisional data from the stock exchanges.
On the global front, the US markets managed a green close despite a volatile day of trade in last session, traders reacted to some positive earnings announcements, while there was some concern on disappointing homebuilder confidence data. The Asian markets too were trading mostly in the green tailing US cues and as China reported economic growth that was faster than estimated.
Back home, on the sectoral front consumer durables, metal and fast moving consumer goods witnessed the maximum gain in trade, while software, technology and capital goods remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks, while the market breadth on the BSE was positive; there were 983 shares on the gaining side against 619 shares on the losing side while 73 shares remain unchanged.
The BSE Sensex opened at 22486.73; about 2 points higher compared to its previous closing of 22484.93, and touched a high and a low of 22533.61 and 22458.52 respectively. The index is currently trading at 22498.31, up by 13.38 points or 0.06%. There were 22 stocks advancing against 8 declines on the index.
The overall market breadth has made a strong start with 58.69% stocks advancing against 36.96% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.36% and Small cap gained 0.44%.
The top gaining sectoral indices on the BSE were, Bankex up by 1%, Consumer Durables up by 0.85%, Metal up by 0.83%, FMCG up by 0.81% and Auto up by 0.71%, while IT down by 1.86%, Teck down by 1.30%, Capital Goods down by 0.25% and Healthcare down by 0.12% were the top losers on the sectoral index.
The top gainers on the Sensex were Hindalco up by 1.42%, Bharti Airtel up by 1.31%, Tata Motors up by 1.26%, Tata Steel up by 1.20% and SBI up by 1.19%. On the flip side, Infosys was down by 2.65%, TCS was down by 2.02%, Wipro was down by 1.12%, L&T was down by 0.82% and Cipla was down by 0.79% were the top losers on the Sensex.
Meanwhile, with an aim to accelerate exploration and production of oil and gas in the country for enhancing energy security, Oil Ministry has introduced a proposal to simplify exploration norms. The Ministry’s draft note seeks to revise the policy guidelines for exploration in the mining lease area after the expiry of the exploration period. Further, the draft also proposes to recognise such exploration activity for the purpose of cost recovery as well. Currently, production-sharing contract between the oil exploration company and the Government does not recognize such activities for the purpose of cost recovery. The proposal was circulated amid concerns about some clauses in the existing policy which has been restricting investments in the industry.
Meanwhile, if Ministry’s proposal is accepted, it would be beneficial to a lot of domestic players such as Reliance Industries and Cairn as they can search for hydrocarbons without any hassles and even after expiry of the exploration period.
As per the proposal, cost recovery will be provided to contractors after resultant discovery is proved commercially and techno-economically viable with requisite computation of cash flows and profit. Further, the draft also proposed existing contractors to continue to apply for development and production relating to such discoveries. However, the approval for further exploration, development and production will not confer any right on the contractors for further extension in the tenure of the contract, except as provided. Further, the contractors will also be permitted to develop and monetise existing discoveries in the mining lease area which have not been monetized or developed earlier. The draft also noted that the contractors will have to get the Management Committee’s approval for quarterly allocation of cost petroleum and profit petroleum. Till now, the Government has signed 254 PSCs under nine rounds of the New Exploration Licensing Policy (NELP).
Meanwhile, Oil Ministry has formulated a roadmap for cutting India's dependence on imports to meet its oil needs. India currently imports around 80 percent of its oil needs and the Ministry wants this to be cut to 50 percent by 2020 and by 25 percent in 2025 through intensive exploration and exploitation of untapped reserves. Presently, only 0.93 million sq km area in India is held under exploration and production in 19 basins as compared to total estimated sedimentary area of 3.14 million square kilometres, comprising 26 sedimentary basins.
The CNX Nifty opened at 6,727.25; about 12 point lower as compared to its previous closing of 6,733.10, and has touched a high and a low of 6,748.65 and 6,724.65 respectively. The index is currently trading at 6,739.55, up by 6.45 points or 0.10%. There were 36 stocks advancing against 14 declines on the index.
The top gainers of the Nifty were Bank of Baroda up by 2.17%, IndusInd Bank up by 1.70%, Tata Motors up by 1.40%, Hindalco up by 1.23% and SBI up by 1.17%. On the flip side, Infosys down by 2.63%, TCS down by 2.33%, BPCL down by 1.46%, L&T down by 0.87% and Tech Mahindra down by 0.77% were the top losers on the index.
Most of the Asian equity indices were trading in green; Shanghai Composite rose 5.46 points or 0.26% to 2,107.06, Hang Seng increased by 142.66 points or 0.63% to 22,813.92, Jakarta Composite jumped 13.70 points or 0.28% to 4,883.92, Nikkei 225 soared by 332.51 points or 2.38% to 14,329.32, Straits Times added by 6.02 points or 0.19% to 3,252.34, KOSPI Composite rose 1.18 points or 0.06% to 1,993.45 and Taiwan Weighted was up by 4.01 points or 0.04% to 8,920.72.
On the flip side, KLSE Composite was down by 3.98 points or 0.21% to 1,849.90.
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