Markets continue to languish into negative territory; sharp fall limited on good macro-economic data

Indian equity markets continued to languish in bottom on sustained profit-booking activities by market-participants post record high levels scaled by the bourses in previous trading session. However, sharp fall of bourses was limited on account of good macro-economic data, which re-kindled hopes that Reserve Bank of India would lower interest rates in its upcoming monetary policy review in December. On the macro-front, in a double delight, India’s consumer price inflation eased at another all time low level since the launch of the new series of Consumer Price Index in 2012, at 5.52% in October as compared to 6.46% in September, while India’s annual industrial output growth, measured by index of industrial production (IIP), expanded more than expected at 2.5% in September after posting growth of 0.5% in August. Languishing into negative territory, both Sensex and Nifty were trading below psychologically crucial 28,000 and 8,400 levels, with losses of around one tenth of a percent. However, broader indices depicting a different trend were trading with gains in the range of 0.25%-0.40%.

On the global front, Asian shares traded mixed on Thursday, denting the mood after record closing highs for Japanese shares in the previous two sessions. News that six global banks were fined on Wednesday Euro 2.6 billion by regulators for currency rigging, hurt investor sentiment.

Closer home, most of the sectoral indices on BSE were trading into negative territory, while stocks from banking, Oil & Gas and Realty counters were prominent losers of the session. On the flip side, stocks from Consumer Durables, Healthcare and Capital Goods were the top gainers of the session. The overall market breadth on BSE was trading in the favour of declines which thumped advances in the ratio of 1395:1312; while 107 shares remained unchanged.

The BSE Sensex is currently trading at 27973.42, down by 35.48 points or 0.13% after trading in a range of 27911.17 and 28098.74. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.40%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.29%, Capital Goods up by 0.72%, IT up by 0.67%, TECK up by 0.48% and Power up by 0.08% while, Oil & Gas down by 0.82%, Bankex down by 0.72%, Realty down by 0.70%, PSU down by 0.64% and INFRA down by 0.56% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.82%, Wipro up by 1.41%, BHEL up by 1.36%, Sun Pharma Inds. up by 1.24% and Infosys up by 1.01%. On the flip side, Axis Bank down by 1.53%, Tata Power down by 1.32%, HDFC down by 0.98%, SBI down by 0.90% and GAIL India down by 0.78% were the top losers.

Meanwhile,in a move to bring major investments in railway infrastructure, Indian railway has indentified 17 special areas where 100% Foreign Direct investments (FDI) would be permitted. According to the guidelines approved by the government under its FDI policy, 100% FDI would be permitted in facilities like cleaning up trains and installation of bio-toilets in passenger coaches and setting up of mechanized laundry facilities. A committee constituted by Railway Ministry, to finalise the policy has also suggested a set of business models to attract investments in railway sector, is facing a severe cash crunch to the tune of Rs 30,000 crore every year. 

Besides bio-toilets, cleaning operation and mechanized laundries, the areas identified by the committee for FDI include construction, maintenance and operation facilities to supply non-conventional sources of energy to the Railways, installation and maintenance of bio-toilets in passenger trains, setting up of technical training institutes, testing facilities and laboratories and providing technological solutions to improve safety.

Furthermore, the committee has suggested three business models for high-speed train projects including projects where there are limits on operations and a firm wants to invest in upgrading the existing rail network for speed above 120 km per hour or semi-high speed network. In dedicated freight lines, the Railways has permitted operations by investors, subject to certain conditions. The government has now allowed investment in dedicated freight lines on a Joint Venture and/or PPP model, with clear revenue sharing guidelines. All new suburban corridor projects are permissible when launched through PPP route by MoR. The developer can construct, maintain and operate the corridor within the concession period. It is expected that these new guidelines can attract upto Rs 90,000 crore FDI into Indian Railways.

Ever since its origin, Indian Railways had always been shut off from receiving any kind of FDI, considering security risks involved. However, in August this year, the government had eased FDI norms permitting 100 percent investment in rail projects, such as high-speed trains, suburban service, dedicated freight corridors, freight and passenger terminals. FDI is also being permitted for rail route electrification, signalling system and logistics parks.

The CNX Nifty is currently trading at 8365.00, down by 18.30 points or 0.22% after trading in a range of 8345.60 and 8408.00. There were 19 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 2.12%, HCL Tech up by 2.11%, Cipla up by 1.89%, Lupin up by 1.83% and BHEL up by 1.50%. On the flip side, BPCL down by 4.38%, NMDC down by 2.56%, Cairn India down by 2.09%, Axis Bank down by 1.59% and IDFC down by 1.59% were the top losers.

Asian markets were trading mixed; with Straits Times gaining by 27.52 points or 0.84% to 3,311.23; Taiwan Weighted rising by 61.72 points or 0.69% to 8,980.67; Hang Seng gaining by 97.1 points or 0.41% to 24,035.28; Nikkei 225 advancing by 195.74 points or 1.14% to 17,392.79.

On the flip side, Jakarta Composite down by 9.56 points or 0.19% to 5,039.28; Shanghai Composite declined by 9.25 points or 0.37% to 2,485.22; KOSPI Index slid by 5.71 points or 0.29% to 1,961.56 and  FTSE Bursa Malaysia KLCI lost 0.91 points or 0.05% to 1,815.33