Benchmarks make gap-down start; Nifty breaches 7,700 mark

Extending their southward journey, Indian equity benchmarks have made a gap-down opening and are reeling under pressure with frontline gauges trading with a cut of over half a percent on feeble global cues. The US markets suffered sharp sell-off in last session on some earnings disappointments and on credit-market concerns, as the yields rose. The lingering geopolitical concerns amid the ongoing conflicts in Ukraine and Gaza too weighed down the markets. The Asian markets were trading mostly in the red at this point of time tailing the overnight weakness in the US markets. Traders in the region have even ignored the report of rise in China’s manufacturing PMI in July on concern that the improving US economy may force the Fed to raise interest rates sooner than expected.

Back home, traders also remained pessimistic on report that India’s fiscal deficit in the first quarter of the current financial year crossed the halfway mark at 56.1% of the full-year's target of Rs.5.3 trillion. However, on the economic front, an encouraging news added to the increasing signs that the rebound in the industrial growth is picking up pace, the Core sector output rose at its fastest pace in nine months by 7.3% in June from a year ago.

On the sectoral front, infrastructure, fast moving consumer goods and healthcare witnessed the maximum gains in trade, while power, oil and gas and capital goods remained the lone loser on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 722 shares on the gaining side against 1,059 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex opened at 25753.92; around 141 point lower compared to its previous closing of 25894.97, and has touched a high and a low of 25773.28 and 25679.46 respectively. The index is currently trading at 25749.62, down by 145.35 points or 0.56%. There were 8 stocks advancing against 22 declines on the index.

The overall market breadth has made a negative start with 57.15% stocks advancing against 38.96% declines. The broader indices too were trading in the red; the BSE Mid cap index was down by 0.44%, while Small cap index was down by 0.27%. 

The few gaining sectoral indices on the BSE were Infrastructure up by 0.63%, FMCG up by 0.44% and Healthcare up by 0.16%, while Power down by 0.89%, Oil and Gas down by 0.89%, Capital Goods down by 0.82%, Realty down by 0.76% and IT down was by 0.65%, were the major losers on the sectoral index.

The top gainers on the Sensex were Bharti Airtel up by 3.05%, HUL up by 0.95%, ICICI Bank up by 0.48%, Cipla up by 0.47% and Tata Motors up by 0.39%. On the flip side, M&M was down by 2.62%, NTPC was down by 2.07%, HDFC was down by 1.86%, SSLT was down by 1.69% and Gail India was down by 1.56% were the top losers on the Sensex.

Meanwhile, to improve the gas distribution infrastructure in the country, Oil Ministry is currently working on a new public-private-partnership (PPP) model for laying gas pipelines in the country. Finance Ministry during budget 2014-15 announced plans to double the country's gas pipeline network to 30,000 km to complete the national gas grid, mainly through the PPP model.

Oil Ministry has asked the Petroleum and Natural Gas Regulatory Board to initiate work on it. Further, the Board has already been authorised to call for bids for 9,000 km of pipeline infrastructure. PPP mechanism consists two models such as viability gap funding and tariff based funding and the board may opt for a consultant to determine which model will be suitable for the development of national gas grid. 

Under the tariff-based competitive bidding, project developers bid on the basis of a pre-fixed tariff with an option to keep a portion open for cost escalation. Whereas viability gap funding is essentially a subsidy to provide support to infrastructure projects that fall short of financial viability due to inability to raise tariffs to commercial levels and their long gestation period. Meanwhile, industry is of the view that board should go with viability gap funding model for gas infrastructure sector for certain segments as a particular zone or area may not have sufficient demand to make the project economically viable for the developer.

The CNX Nifty opened at 7,662.50; about 59 point lower as compared to its previous closing of 7,721.30, and has touched a high and a low of 7,678.95 and 7,649.75 respectively. The index is currently trading at 7,671.60, down by 49.70 points or 0.64%. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 2.70%, BPCL up by 0.96%, NMDC up by 0.85%, Lupin up by 0.84% and HUL up by 0.83%. On the flip side, Tech Mahindra down by 3.72%, M&M down by 2.51%, HDFC down by 2.00%, NTPC down by 1.96% and HCL Tech down by 1.92% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 tumbled by 35.10 points or 0.22% to 15,585.67, Hang Seng slipped 129.31 points or 0.52% to 24,627.54, KOSPI Index declined by 2.74 points or 0.13% to 2,073.38, Straits Times dipped 28.98 points or 0.86% to 3,345.08, Jakarta Composite contracted by 9.84 points or 0.19% to 5,088.80, FTSE Bursa Malaysia KLCI dropped 5.68 points or 0.30% to 1,865.68 and Taiwan Weighted was down by 50.17 points or 0.54% to 9,265.68.

On the flip side, Shanghai Composite was up by 1.51 points or 0.07% to 2,203.08.