Indian stocks fell for a third straight session amid mounting fears that the Government won’t be able to implement pending reforms in the wake of the controversy over CAG report on coal block allocation. The BJP has sought to corner the UPA II government, especially the Prime Minister, for alleged malpractices in the award of coal blocks to private enterprises. The Prime Minister and the Congress party have denied any wrongdoing and have instead questioned the CAG’s method of calculating the humungous loss to the exchequer.
 
The parliament proceedings have been stalled by the BJP virtually every day during the ongoing monsoon session. Markets had high hopes of some material progress on reforms during the monsoon session of parliament, leading to a sharp rise in the key indices over the past four weeks. FIIs too have been pumping money into Indian equities during the past couple of months on optimism about the Centre pushing through a few key reforms.
 
However, the political gridlock in New Delhi over the coal block allocations has more or less ruled out any progress on reforms in the immediate future. One has to see what stand the Government takes on reforms post the monsoon session of parliament.
 
After hitting an intra-day low of 5312, the Nifty bounced back led by some gains in IT, FMCG, Telecom and Power stocks. Selling pressure was seen in Metals, Capital Goods, Banking and Auto stocks. Further, Mid-Cap and Small-Cap stocks under-performed their Large-Cap peers.
 
The broader market came under pressure after the BSE decided to shift 74 stocks to the “T-to-T” group. The list of stocks included the likes of SKs Microfinance, Wockhardt and Mastek.
 
Shares of ONGC fell ~3% after the Comptroller and Auditor General (CAG) slammed public sector oil & gas producer for its shoddy efforts in hydrocarbon exploration over the past three years. CAG has pulled up ONGC for not placing desired emphasis on discovering oil and gas and being tardy in monetising its discoveries.
 
The Sensex ended at 17,631, down 47 points or 0.3% over the previous close. It had earlier touched a day’s high of 17,712 and a day’s low of 17,570. It opened at 17,676.
 
The NSE Nifty settled at 5334, down 15 points or 0.3% over the previous close. It touched a day’s low of 5,312 and a day’s high of 5,359.
 
Sterlite Industries, Jindal Steel, JP Associates, Hindalco, Sesa Goa, L&T, ONGC, Axis Bank and Bajaj Auto were among the notable losers in the Sensex and the Nifty.
 
Power Grid, TCS, Asian Paints, Dr Reddy’s, Sun Pharma, NTPC, Siemens and Tata Power were the top gainers in the Sensex and the Nifty.

The INDIA VIX on NSE ended at 16.35, down ~0.7%. It hit a day’s high of 16.76 and a day’s low of 15.80.
 
The market breadth on the BSE was negative, with 1884 stocks ending lower and 936 stocks closing higher.
 
Asian stocks were mostly down today, with the regional benchmark hitting a two-week low after Japan lowered its growth forecast. The dollar strengthened and commodities dropped ahead of Friday's important Federal Reserve annual symposium in the US.
 
In Europe, the Stoxx Europe 600 index was down 0.4% after gaining 0.5% on Monday.
 
Also Read… Markets close in the red…Nifty below 5,350