Despite making desperate attempts to break into the green territory, Indian equity markets failed to do so, as cautious investors lacked conviction to pile up positions in the heavyweight stocks. The frontline indices are trading on a soft note in the afternoon session, lacking any upside triggers either from the domestic or global front. The Asian peers are trading on a mixed note while the European market opening too remained an uninspiring affair as they got off to an absolutely flat opening with a negative bias. The recent surge in international crude oil prices have been a cause of concern for the market participants as it may not only adversely impact the public sector oil marketing companies but also the market as a whole because rise in oil prices run the risk of stoking up inflationary pressure on the Indian economy, which imports around 80% of its energy requirements. Back home, profit booking was largely witnessed in rate sensitive banking counter which remained the top laggard with over half a percent loss while PSU, FMCG and some IT stocks too bore the brunt of selling pressure. On the other hand, the Consumer Durables, Capital Goods and the high beta Realty stocks remained amongst prominent gainers. Index heavyweight Reliance Industries too saw some buying interests a session after being pummeled around two and half a percent. Reports suggested that RIL has decided to drill three development wells at D6 to assess the reservoir characteristics.
However, the broader markets managed to bounce back into the green terrain amid volatile trades and were outclassing their larger peers this afternoon. The bourses consolidated on weak volumes of around Rs 0.50 lakh crore while the market breadth on BSE was in favor of advances in the ratio of 1368:1175 while 129 scrips remained unchanged.
The BSE Sensex is currently trading at 18,735.07 down by 9.49 points or 0.05% after trading as high as 18,823.45 and as low as 18,688.06. There were 14 stocks advancing against 16 declines on the index.
The broader indices were trading on a positive note; the BSE Mid cap and Small cap indices advanced by 0.07% and 0.30% respectively.
On the BSE sectoral space, CD up 1.49%, CG up 0.69%, Realty up 0.66%, Metal up 0.51% and Healthcare up 0.12% were the major gainers, while Bankex down 0.57%, PSU down 0.31%, FMCG down 0.30%, IT down 0.22% and Auto down 0.11% were the major loser on the index.
The top gainers on the Sensex were L&T up by 1.17%, Hindalco up by 0.88%, DLF up by 0.84%, Bharti Airtel up 0.62% and HDFC up 0.61%.
On the flip side, ICICI Bank down by 1.34%, Tata Power down by 1.15%, R Com down 1.10%, ONGC down 0.96% and Hero Honda down 0.84% were the major losers on the index.
The power tariffs are expected to follow the path of fuels prices, after fuel price hike, pressure is mounting for an increase in power tariffs. A recent discussion between the power ministry, central and state regulators and distribution utilities point to situation where power utilities have to increase the tariffs in order to sustain the supply of power. As per the status report on power distribution prepared by power ministry, the total loss of the India's 110 power utilities, comprising 37 purely distribution firms, are estimated at Rs 86, 136 crore. If the prices remained at the present level, the loss of power utilities is expected to reach Rs 116,089 crore by 2014-15. The power utilities loss is expected to be much higher, after including the subsidies provided by the state governments. The government owned lender, Power Finance Corporation reckoned subsidies to be around 19% or Rs 29, 665 of the public sector firms in 2008-09. Subsidies have considerably increased from past few years; it increased by around 14% or Rs 19,518 in 2007-08 and 11% or Rs 13,590 crore in 2006-07.
Currently, even after subsidy, there are 50 paise mismatches between cost and selling price of power, power utilities are charging on an average Rs 2.91/ unit, whereas their cost of supply is Rs 3.41/unit. The state governments' reluctance to give permission to raise the tariffs as the increased tariffs would make situation more worsen. Since 2010, only 16 states had revised tariffs, and like Delhi, Assam and Karnataka has not increased tariffs from 2009.
The S&P CNX Nifty is currently trading at 5,628.15, lower by 3.95 points or 0.07% after trading as high as 5,655.40 and as low as 5,613.50. There were 21 stocks advancing against 29 declines on the index.
The top gainers of the Nifty were SesaGoa up by 1.83%, L&T up by 1.18%, Hindalco up by 1.10%, Dr Reddy's up by 0.90% and DLF up by 0.80%.
On the other side, BPCL down by 2.13%, Ranbaxy down by 1.58%, ICICI bank down by 1.35%, IDFC down by 1.25% and R Power down 1.22% were the major losers on the index.
Asian markets are exhibiting mixed trends as KLSE Composite inched up 0.36%, Nikkei 225 surged 1.10%, Straits Times increased 0.21%, Seoul Composite climbed 0.44% and Taiwan Weighted advanced 0.46%.
On the flipside, Shanghai Composite slipped 0.48%, Hang Seng shed 0.46% and Jakarta Composite sank 0.25%.
The European markets have opened on a flat note as France's CAC 40 eased 0.12%, Germany's DAX shed 0.01% and London's FTSE fell 0.12%
However, the broader markets managed to bounce back into the green terrain amid volatile trades and were outclassing their larger peers this afternoon. The bourses consolidated on weak volumes of around Rs 0.50 lakh crore while the market breadth on BSE was in favor of advances in the ratio of 1368:1175 while 129 scrips remained unchanged.
The BSE Sensex is currently trading at 18,735.07 down by 9.49 points or 0.05% after trading as high as 18,823.45 and as low as 18,688.06. There were 14 stocks advancing against 16 declines on the index.
The broader indices were trading on a positive note; the BSE Mid cap and Small cap indices advanced by 0.07% and 0.30% respectively.
On the BSE sectoral space, CD up 1.49%, CG up 0.69%, Realty up 0.66%, Metal up 0.51% and Healthcare up 0.12% were the major gainers, while Bankex down 0.57%, PSU down 0.31%, FMCG down 0.30%, IT down 0.22% and Auto down 0.11% were the major loser on the index.
The top gainers on the Sensex were L&T up by 1.17%, Hindalco up by 0.88%, DLF up by 0.84%, Bharti Airtel up 0.62% and HDFC up 0.61%.
On the flip side, ICICI Bank down by 1.34%, Tata Power down by 1.15%, R Com down 1.10%, ONGC down 0.96% and Hero Honda down 0.84% were the major losers on the index.
The power tariffs are expected to follow the path of fuels prices, after fuel price hike, pressure is mounting for an increase in power tariffs. A recent discussion between the power ministry, central and state regulators and distribution utilities point to situation where power utilities have to increase the tariffs in order to sustain the supply of power. As per the status report on power distribution prepared by power ministry, the total loss of the India's 110 power utilities, comprising 37 purely distribution firms, are estimated at Rs 86, 136 crore. If the prices remained at the present level, the loss of power utilities is expected to reach Rs 116,089 crore by 2014-15. The power utilities loss is expected to be much higher, after including the subsidies provided by the state governments. The government owned lender, Power Finance Corporation reckoned subsidies to be around 19% or Rs 29, 665 of the public sector firms in 2008-09. Subsidies have considerably increased from past few years; it increased by around 14% or Rs 19,518 in 2007-08 and 11% or Rs 13,590 crore in 2006-07.
This demonstrates that the states are giving extra subsidies both in absolute terms as well as percentage of revenue. However, the power firms are facing cash flow problems since the percentage of the subsidy that is actually released by the cash-strapped state governments has been declining over the years. In 2008-09, for example, Rs 29,665 crore was booked as subsidy by the utilities. They, however, received only 61% of this amount -Rs 18,388 crore, leaving a gap of Rs 11,277 crore.
Because of this, the power utilities are forced to take short-term loans on higher interest rate to meet their operational expenses. And some time state regulators don't give permission to power utilities to include interest in cost, as a results power utilizes carry huge loss. The total outstanding of the utilities in 2008-09 is estimated at Rs 56,627 crore, while their debt stands at Rs 1,33,013 crore. Around 22 utilities are having negative net worth and just 17 utilities are in positive net worth, whereas only 10 utilities are in surplus. Currently, even after subsidy, there are 50 paise mismatches between cost and selling price of power, power utilities are charging on an average Rs 2.91/ unit, whereas their cost of supply is Rs 3.41/unit. The state governments' reluctance to give permission to raise the tariffs as the increased tariffs would make situation more worsen. Since 2010, only 16 states had revised tariffs, and like Delhi, Assam and Karnataka has not increased tariffs from 2009.
The S&P CNX Nifty is currently trading at 5,628.15, lower by 3.95 points or 0.07% after trading as high as 5,655.40 and as low as 5,613.50. There were 21 stocks advancing against 29 declines on the index.
The top gainers of the Nifty were SesaGoa up by 1.83%, L&T up by 1.18%, Hindalco up by 1.10%, Dr Reddy's up by 0.90% and DLF up by 0.80%.
On the other side, BPCL down by 2.13%, Ranbaxy down by 1.58%, ICICI bank down by 1.35%, IDFC down by 1.25% and R Power down 1.22% were the major losers on the index.
Asian markets are exhibiting mixed trends as KLSE Composite inched up 0.36%, Nikkei 225 surged 1.10%, Straits Times increased 0.21%, Seoul Composite climbed 0.44% and Taiwan Weighted advanced 0.46%.
On the flipside, Shanghai Composite slipped 0.48%, Hang Seng shed 0.46% and Jakarta Composite sank 0.25%.
The European markets have opened on a flat note as France's CAC 40 eased 0.12%, Germany's DAX shed 0.01% and London's FTSE fell 0.12%
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