Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors engaged in reducing positions tracking other Asian markets, which were trading lower after US President Barack Obama authorised air strikes against Islamic militants in northern Iraq. Sentiment weakened further as foreign institutional investors (FIIs) sold shares worth a net Rs 73 crore on Thursday. Down in red with loss of over 0.90%, both Sensex and Nifty were trading below the psychological 25,600 and 7,600 levels respectively. Meanwhile, broader indices also succumbing to brutal selling pressure, were down and out with losses in the range of 1.43%-1.69%. Apart from IT and Healthcare, all other BSE sectoral indices were trading significantly in the red. Among them, realty, power, capital goods and auto indices succumbed to heavy selling pressure and were down upto 2.18%. Furthermore, India Ratings said that the government will not be able to meet its ambitious fiscal deficit target of 4.1 percent. However, the rating agency has increased its FY15 GDP growth estimate marginally to 5.7 percent from the earlier 5.6 percent, largely on the back of an expected improvement in the industrial activity. 

In scrip specific development, shares of Gujarat State Petronet have tanked as much as 5% after reporting a 32.69% decline in its net profit to Rs.84.99 crore in June quarter as compared to Rs.126.27 crore last year same quarter. Besides, shares of Vardhman Textiles have slipped as much as 10% after reporting 27% year-on-year (yoy) drop in its standalone net profit at Rs 106 crore for the quarter ended June 30, 2014 (Q1), due to higher raw material cost. On the other hand, shares of Aurobindo Pharma have surged as much as 2% after reporting a robust consolidated net profit of Rs 415 crore for the quarter ended June 30, 2014 (Q1), on back of strong operational performance.

Asian stocks dropped, with the regional benchmark index heading for a seven-week low, as investors sought out safe-haven assets on growing fears that conflicts in Ukraine and the Middle East could sap global growth, extending losses after US President Barack Obama said he had authorized air strikes in Iraq. Back home, the Indian rupee weakened in the opening trade against the dollar, tracking the losses from Asian currencies markets. The market breadth on BSE was negative, out of 2202 stocks traded, 550 stocks advanced, while 1588 stocks declined on the BSE.

The BSE Sensex is currently trading at 25345.74 down by 243.27 points or 0.95% after trading in a range of 25406.87 and 25290.64. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.43%, while Small cap index down by 1.69%.

The top gaining sectoral indices on the BSE were, Healthcare up by 0.39% and IT up by 0.03%, while Realty down by 2.18%, Power down by 2.16%, PSU down by 1.70%, Metal down by 1.65% and Auto was down by 1.62% were the top losers on the sectoral index.

The top gainers on the Sensex were Dr Reddys Lab up by 0.98%, TCS up by 0.76%, Bharti Airtel up by 0.75%, Sun Pharma up by 0.60% and ITC up by 0.22%. On the flip side, Mahindra & Mahindra was down by 2.43%, Tata Motors was down by 2.34%, BHEL was down by 2.22%, Hindalco was down by 2.06% and Tata Power was down by 2.05% were the top losers on the Sensex.

Meanwhile, The Cabinet Committee on Economic Affairs (CCEA) has approved four- and six-laning of highways in five states. Total cost of these projects would be about Rs 13,987 crore and will cover length over 676 kilometres in states of Uttar Pradesh, Rajasthan, Delhi, Kerala and Andhra Pradesh.

Project wise, the 95.38-km long four laninig project in Ambala-Kaithal section of NH 65 in Haryana will be undertaken at a cost of about Rs 1,176.48 crore. Likewise, four-laning of Yadgiri-Warangal section of NH 163 project in Andhra Pradesh will be done. After the completion of this phase, the Hyderabad and Warangal stretch covering a total length of 99.10 km will be developed into four-lane at a cost of around Rs 1,487.95 crore. Further, four-laning of Sultanpur-Varanasi section of NH 56 in Uttar Pradesh, spreading over 146.22 km, will also be completed at a cost of about Rs 1,975.83 crore. The CCEA also approved development of 26.79 km long four-laning of the Kazahakkottum-Mukkola section of National Highway (NH) 47 in Kerala at an approximate cost of Rs 587.49 crore. It also approved four-laning of 159.30-km long Bikaner-Falodi section of NH 15 in Rajasthan at an estimated cost of Rs 903.40 crore.

Further, construction of connected roads having length 150.14 km would be undertaken on Delhi-Meerut expressway. Total cost of the project would be around 7,855.87 crore and will develop six- to eight-laning of NH 24 (Hapur bypass), six laning of NH 58 (Delhi-UP border) and six-laning of NH 235 (Delhi-UP).

India needs widespread highway infrastructure to prevent the sector from becoming hurdle to its economic growth. During FY14, the NHAI has managed to award around 2,000 km of road projects as against the set target of 9,000 km, while in FY13 only 1,116 km of projects were awarded against a target of 9,500 km. Financial constraints, delay in land acquisition and environmental clearances and lack of project planning are the leading factors impacting road infrastructure development in the country.

The CNX Nifty is currently trading at 7,574.30 down by 74.95 points or 0.98% after trading in a range of 7,592.45 and 7,560.05. There were 7 stocks advancing against 43 declining on the index.

The top gainers of the Nifty were HCL Tech up by 1.13%, Bharti Airtel up by 0.92%, Dr. Reddy's Laboratories up by 0.89%, TCS up by 0.75% and Sun Pharma up by 0.74%. On the flip side, BPCL down by 2.79%, UltraTech Cement down by 2.73%, IDFC down by 2.64%, BHEL down by 2.62% and M&M down by 2.58% were the major losers on the index.

Asian markets were trading in the red; Nikkei 225 tumbled by 2.75%, Hang Seng slipped 0.20%, KOSPI Index declined by 1.13%, Jakarta Composite decreased by 0.19%, Straits Times dipped 0.89%, FTSE Bursa Malaysia KLCI contracted by 1.44% and Taiwan Weighted was down by 0.64%. On the flip side, Shanghai Composite was up by 0.20%.