Firm trade prevails; Oil & Gas, Capital Goods lead

Indian equity benchmarks continue their firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were however on cautious approach as Moody’s Investors Service stated that the country’s sovereign ratings are constrained by persistently high inflation that is weighing on an otherwise promising economic recovery. Traders were seen piling up positions in Oil & Gas, Capital Goods and Auto while selling was witnessed in Realty, IT and Power sector stocks. In scrip specific development, SKS Microfinance was trading in green on hopes of strong growth in microfinance industry. A foreign brokerage firm has kept the stock in its top pick in NBFC space. The market may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. August 2014 series to next month i.e. September 2014 series. The near-month August 2014 F&O contracts will expire today i.e. on August 28, 2014.

On the global front, the Asian markets were trading mostly in red, while the European markets too traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,950 and 26,600 levels respectively. The market breadth on BSE was negative in the ratio of 1295:1493 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 26636.49, up by 76.34 points or 0.29% after trading in a range of 26596.67 and 26674.38. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was down by 0.22%, while Small cap index up by 0.24%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.29%, Capital Goods up by 0.71%, Auto up by 0.63%, PSU up by 0.52%, Infra up by 0.46% while, Realty down by 1.59%, IT down by 0.34%, Power down by 0.30%, Metal down by 0.26%, TECK down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.22%, ONGC up by 2.19%, BHEL up by 2.09%, GAIL India up by 1.76% and Wipro up by 1.32%. On the flip side, Axis Bank down by 1.32%, Tata Power down by 1.30%, Sun Pharma down by 0.96%, SBI down by 0.92% and Infosys down by 0.85% were the top losers.

Meanwhile, in a bid to accelerate the implementation of highway projects, the government gave full authority to the road transport and highways (RTH) ministry to ease the rigid Model Concession Agreement (MCA) in order to fast-track the development of highway projects. RTH Ministry can now decide on the mode of delivery and amendments in regard to agreements with developers.

The CCEA, chaired by the Prime Minister Narendra Modi, empowered the RTH Ministry so that the MCA can be amended as required from time to time and decide which mode is the best for effective delivery of road projects. MCA is the document that governs any road contract and management of project till the time a private player operates. Till now, even small changes in the MCA were referred to inter-ministerial group (IMG) for approval which adversely impacted timely road development in the country.

India needs widespread highway infrastructure to prevent the sector from becoming hurdle to its economic growth. Over the past five years, the highway road development in the country remained sluggish with physical achievement falling short of its intended target and getting further delayed with time. During FY14, the National Highways Authority of India (NHAI) has managed to award around 1,436 km lengths of road projects as against the set target of 4,030 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, lack of project planning and compexities are the leading factors impacting road infrastructure development in the country.

The CNX Nifty is currently trading at 7960.70, up by 24.65 points or 0.31% after trading in a range of 7942.25 and 7967.80. There were 27 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.69% and Hero MotoCorp up by 2.64% and ONGC up by 2.21% and BHEL up by 2.14% and NMDC up by 1.90%. On the flip side, Jindal Steel & Power down by 4.52%, DLF down by 3.01%, Bank of Baroda down by 1.62%, PNB down by 1.32% and Tata Power down by 1.24% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 177.75 points or 0.71% to 24,741.00, Nikkei 225 decreased 74.96 points or 0.48% to 15,459.86, Shanghai Composite decreased 13.65 points or 0.62% to 2,195.82, Taiwan Weighted decreased 7.22 points or 0.08% to 9,478.37, Straits Times decreased 4.64 points or 0.14% to 3,336.82 and FTSE Bursa Malaysia KLCI decreased 1.91 points or 0.1% to 1,870.47.

On the other hand, KOSPI Index increased 0.83 points or 0.04% to 2,075.76 and Jakarta Composite increased 17.03 points or 0.33% to 5,182.28.

The European markets were too trading in red; Germany’s DAX decreased 80.91 points or 0.85% to 9,488.80, France’s CAC decreased 23.91 points or 0.54% to 4,371.35 and UK’s FTSE 100 decreased 20.12 points or 0.29% to 6,810.54.