Benchmarks pare losses; trade continues in red

Indian equity benchmarks pared losses but continued to trade in red in the late afternoon session taking cues from regional counterparts. Investors were cautious after rating agency Moody’s stated that revision of the fiscal deficit numbers for the FY15 will not have any major impact on India’s credit score. However, the agency is keeping a close watch on sustained steps to bring down the deficit as it believes that all high growth forecasts will amount to nothing if these measures are absent. Traders were seen piling up positions in IT, TECK and Consumer Durables while selling was witnessed in Oil & Gas, PSU and Bankex sector stocks. Hectic activity was witnessed in railway stocks after Railways minister DV Sadananda Gowda stated that the government is planning to allow foreign direct investment (FDI) into railways to finance its ambitious plans to modernize the sector. At present, there is a complete ban on any kind of FDI in railways except mass rapid transport systems. In scrip specific development, Sintex Industries was trading in green on reports that it is setting up a spinning unit with 0.3 million spindles at a cost of Rs 1,800 crore in Gujarat and later plans to ramp it up to 1 million spindles with a total capex of over Rs 5,000 crore over the next five years.

On the global front, the Asian markets were trading mostly in red, while the European markets traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,600 and 25,300 levels respectively. The market breadth on BSE was negative in the ratio of 1332:1482 while 102 scrips remained unchanged.

The BSE Sensex is currently trading at 25211.02, down by 35.23 points or 0.14% after trading in a range of 25425.85 and 25069.66. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading on mixed note; the BSE Mid cap index was down by 0.19%, while Small cap index was up by 0.06%.   

The gaining sectoral indices on the BSE were IT up by 1.23%, TECK up by 0.94%, Consumer Durables up by 0.62%, Auto up by 0.57% and Realty up by 0.47% while, Oil & Gas down by 2.71%, PSU down by 1.44%, Bankex down by 0.56%, Metal down by 0.47% and India Infrastructure Index down by 0.45% were the losing indices on BSE.   

The top gainers on the Sensex were Mahindra & Mahindra up by 1.69%, Infosys up by 1.60%, Tata Motors up by 1.50%, Wipro up by 1.44% and BHEL up by 1.02%. On the flip side, ONGC down by 4.85%, RIL down by 2.17%, Gail India down by 1.43%, Maruti Suzuki down by 1.40% and Coal India down by 1.14% were the top losers.   

Meanwhile, Finance Ministry is mulling a strategy to divest stake in seven big state-run companies in seven big state-run companies, which include Coal India, Sail, MMTC, NMDC, NHPC, N Lignite and Nalco. The Government holds around 80 percent or more stakes in these companies.

The government would retain the disinvestment target through stake sale in PSUs at Rs 36,000 crore in FY15. It is likely to kick start the programme with bigger stake sale issues such as Coal India and Sail.

The move came after the Securities & Exchange Board of India (Sebi) proposed to bring public float in state-run firms at 75%, equal to that of private companies. However, earlier, Assocham had stated that the new government should divest stake in the top 10 cash-rich PSUs to raise around Rs 1 lakh crore, which can be used to provide much-needed push to economic growth and tide over revenue shortfall. Assocham added that the new government should take advantage of robust state of domestic stock markets helped by heavy inflow of funds from the foreign institutional investors (FIIs).

In the previous fiscal year, the government was able to disinvest only around Rs 16,000 crore as against the set target of Rs 40,000 crore mainly on account of subdued economic conditions.

The CNX Nifty is currently trading at 7551.85, down by 6.35 points or 0.08% after trading in a range of 7606.45 and 7502.55. There were 22 stocks advancing against 27 declining ones while 1 stock remained unchanged on the index.   

The top gainers on Nifty were IndusInd Bank up by 2.84%, Infosys up by 1.75%, Tata Motors up by 1.66%, Mahindra & Mahindra up by 1.60% and Wipro up by 1.55%. On the flip side, MCDOWELL-N down by 6.26%, ONGC down by 4.34%, BPCL down by 3.21%, Kotak Bank down by 3.13% and Reliance Industries down by 1.85% were the top losers. 

Asian equity indices were trading mostly in red; Straits Times down by 0.13%, Hang Seng down by 0.06%, Jakarta Stock Index down by 0.52% and Shanghai Composite plunged by 1.55% while, Nikkei 225 up by 1.62% and Taiwan Weighted up by 0.40%.

The European markets were trading in green; France’s CAC 40 gained 0.76%, Germany’s DAX added 0.74% and UK’s FTSE 100 was up by 0.74%.