NEGATIVE BIAS

Indian equity indices have made a flat-to-negative start tracking weakness in global markets. Moreover, traders also remained on the safer side ahead of the F&O expiry for the month of August which is due later this week. The US markets made a mixed closing overnight, as the traders remained cautious, hoping for hints about further monetary stimulus from the Jackson Hole, Wyo economic summit this weekend. While, most of the Asian equity indices were trading in the red at this point of time, dampening the sentiments. Back home, the mood also remain subdued after the Indian rupee extended losses on the back of dollar demand from oil companies and concerns that logjam in parliament might delay policy reforms measures further. The partially convertible rupee was at 55.85 per dollar, down 16 paise against previous close. On the sectoral front software, fast moving consumer goods and technology remained the top gainers while, metal, consumer durables and realty witnessed the most selling pressure, dragging down the Sensex. Meanwhile, banking stocks saw selling pressure for a second day ahead of the June quarter GDP data announcement on Friday. There is also pessimism that the central bank will hold on to key rates despite headline inflation falling below the 7 percent mark. The broader indices were trading in the red and the market breadth on the BSE was negative; there were 564 shares on the gaining side against 1,003 shares on the losing side while 78 shares remained unchanged. 

The BSE Sensex opened at 17,676.13; about 2 points lower compared to its previous closing of 17,678.81, and has touched a high and a low of 17,712.35 and 17,637.54 respectively.

The index is currently trading at 17,650.52 down by 28.29 points or 0.16%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a negative start with 33.67% stocks advancing against 61.67% declines. The broader indices too were struggling to get some traction; the BSE Mid cap and Small cap indices rose 0.02% and 0.25% respectively.

The few gaining sectoral indices on the BSE were, IT up by 0.66%, FMCG up by 0.38%, TECk up by 0.38% and Oil and Gas up by 0.01%. While, Metal down by 1.47%, CD down by 1.37%, Realty down by 1.01%, CG down by 0.96% and Bankex down by 0.87% were the top losers on the index.

The top gainers on the Sensex were Tata Power up by 2.28%, Infosys up by 0.99%, GAIL up by 0.95%, TCS up by 0.90% and Cipla was up by 0.75%.

On the flip side, Jindal Steel was down by 3.09%, Sterlite Industries was down by 2.72%, Tata Motors was down by 2.12%, Tata Steel was down by 1.78% and Hindalco was down by 1.18% were the top losers on the Sensex.

Meanwhile, amid poor power generation in India, the Power Ministry has confirmed that major initiatives were taken to improve the situation after the worst blackout last month. The major initiatives of the government include de-licensing of thermal generation, introduction of Ultra-Mega Power Projects (UMPP), investor friendly New Hydro Policy 2008.

With de-licensing of thermal generation, it is expected that market forces would weed out excess and inefficient capacity. The UMPP, each with a capacity of 4,000 MW or more, are being developed with the aim of bridging the gap in generation. The New Hydro Policy 2008 was designed to involve the private sector in developing the hydro-electric power sector and reduce dependence on thermal energy, which accounts for 84% of the country's power generation.

Other initiatives include, augmentation of domestic manufacturing capacity of power plant equipment, adoption of supercritical technologies, liberalization of mega power policy, enhancing availability of skilled and trained manpower etc. The centre also affirmed to supplement the efforts of the State Governments by establishing power plants in the Central Sector through Central Public Sector Undertakings (CPSUs).

The S&P CNX Nifty opened at 5,348.05; about 2 points lower compared to its previous closing of 5,350.25, and has touched a high and a low of 5,359.25 and 5,334.05 respectively.

The index is currently trading at 5,335.50, lower by 14.75 points or 0.28%. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Tata Power up by 1.91%, Infosys up by 0.92%, GAIL up by 0.82%, Cipla up by 0.60% and TCS up by 0.57%.

On the flip side, Jindal Steel down by 3.40%, Sterlite Industries down by 2.77%, Bank of Baroda down by 2.27%, JP Associate down by 2.19% and Sesa Goa down by 2.13%, were the major losers on the index.

All the Asian equities were exhibiting a choppy trade; Shanghai Composite was down by 0.58 points or 0.03% to 2,055.13, Hang Seng was down by 24.16 points or 0.12% to 19,774.51, Jakarta Composite declined by 10.15 points or 0.26% to 4,135.47, KLSE Composite was marginally down by 0.26 points or 0.02% to 1,647.87, Nikkei 225 lost 25.32 points or 0.28% to 9,060.07, Kospi Composite was down by 6.32 points or 0.33% to 1,912.11 and Taiwan Weighted plunged by 76.30 points or 1.04% to 7,391.09.

On the other hand, Straits Times was marginally up by 1.10 points or 0.01% to 3,045.16.