Power sector stocks drop

Volatility continued as key benchmark indices reversed initial losses in morning trade. The barometer index, the S&P BSE Sensex, was currently was up 31.01 points or 0.12% at 26,468.03. The market breadth indicating the overall health of the market was positive. Shares of power generation and power distribution companies extended Monday's losses triggered by a Supreme Court ruling that all coal mining licenses distributed since 1993 are illegal.

Earlier in the day, key indices had trimmed losses soon after a weak start.

Asian stocks declined in volatile trade. Crude prices rose for the second day in a row.

At 10:20 IST, the S&P BSE Sensex was up 31.01 points or 0.12% at 26,468.03. The index rose 44.95 points at the day's high of 26,481.97 in morning trade. The index dropped 105.19 points at the day's low of 26,331.83 in early trade, its lowest level since 21 August 2014.

The CNX Nifty was up points or 0.04% to 7,909.65. The index hit a high of 7,915.45 in intraday trade. The index hit a low of 7,871.65 in intraday trade, its lowest level since 21 August 2014.

The market breadth indicating the overall health of the market was positive. On BSE, 1,017 shares rose and 998 shares fell. A total of 71 shares were unchanged.

The BSE Mid-Cap index was up 17.33 points or 0.19% at 9,298.43, outperforming the Sensex. The BSE Small-Cap index was down 3.42 points or 0.03% at 10,251.96, underperforming the Sensex.

Shares of power generation and power distribution companies extended Monday's losses triggered by a Supreme Court ruling that all coal mining licenses distributed since 1993 are illegal. GVK Power & Infrastructure (down 2.66%), NTPC (down 0.28%), NHPC (down 0.95%), Adani Power (down 3.98%), Reliance Infrastructure (down 1.33%), Reliance Power (down 4.06%), JSW Energy (down 2.29%), and Power Grid Corporation of India (down 1.09%) declined.

Tata Power Company dropped 3.49% after the company said before market hours that the Supreme Court has on 25 August 2014 stayed the payment of the compensatory tariff by procurers as was allowed as per Appellate Tribunal for Electricity (APTEL)'s interim order. The apex court has further asked APTEL to expedite the case hearings and take a final decision on the subject matter quickly. As the case is already being heard by the APTEL, the company would await a quick resolution of this issue through the required judicial process, Tata Power.

Haryana as a procurer had filed for stay of the interim order of the Appellate Tribunal for Electricity (APTEL) which upheld that compensatory tariff be payable after March 2014 as per order of Central Electricity Regulatory Commission (CERC).

Muthoot Finance rose 2.5% after the company said it has acquired a 30% in Sri Lanka-based Asia Asset Finance for $2.1 million. The company made the announcement after trading hours on Monday, 25 August 2014. Muthoot Finance acquired 16.77 crore existing equity shares of Asia Asset Finance PLC, Colombo (AAF). This represents 29.98% of total capital of AAF. AAF is a registered financial company based in Sri Lanka and listed in DiriSaviBoard of Colombo Stock Exchange. AAF is in lending business since 1970. At present AAF is involved in retail finance, hire purchase & business loans and has 11 branches across Sri Lanka.

The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire on Thursday, 28 August 2014.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 127.33 crore on Monday, 25 August 2014, as per provisional data from the stock exchanges.

In a ruling that may come as a blow to several companies, the Supreme Court on Monday, 25 August 2014, deemed all coal block allocations made since 1993 as illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the Court said, adding they were impermissible. The quashing of these allocations still remains to be decided in further hearings. The court suggested the appointment of a panel of retired apex court judges to help the court in this matter. The case will be heard on 1 September next.

Crude prices rose for the second day in a row. Brent for October settlement was up 15 cents at $102.80 a barrel. The contract rose 36 cents to settle at $102.65 a barrel on Monday, 25 August 2014.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.54, compared with its close of 60.565 on Monday, 25 August 2014.

Asian stocks declined in volatile trade today, 26 August 2014. Key benchmark indices in Indonesia, Japan, Singapore, Hong Kong and China fell 0.09% to 0.57%. Key benchmark indices in Taiwan and South Korea rose 0.07% to 0.46%.

Trading in US index futures indicated that the Dow could fall 11 points at the opening bell on Tuesday, 26 August 2014. US stocks gained on Monday, 25 August 2014, with S&P 500 index closing at a record high and moving above 2,000 mark in intraday trade for the first time, buoyed by activity and hints of more stimulus from the European Central Bank.

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