Benchmarks trim losses; trade continues in red

Indian equity markets trimmed losses but continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters. The downside was capped as investors took note of yesterday released India’s consumer price inflation which 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. Traders were seen piling positions in Consumer Durables, IT and TECK sector while selling was witnessed in Oil & Gas, PSU and Realty sector stocks. In scrip specific development, oil marketing companies Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) were trading in red after government hiked fuel excise. Unitech was trading in red after the realty developer reported a loss of Rs. 14.7 crore in the September quarter. In the year ago period, Unitech had reported a profit of Rs. 25.6 crore, while its profit stood at Rs. 5.6 crore in the June quarter. Whirlpool of India was trading firm as investors are enthusiastic about management confidence and growth plans.

On the global front, the Asian markets were trading mixed while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,400 and 28,000 levels respectively. The market breadth on BSE was negative in the ratio of 1397:1484 while 105 scrips remained unchanged.

The BSE Sensex is currently trading at 27982.73, down by 26.17 points or 0.09% after trading in a range of 27911.17 and 28098.74. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.28%, while Small cap index up by 0.40%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.37%, IT up by 1.09%, TECK up by 0.83%, Capital Goods up by 0.66%, Auto up by 0.06% while, Oil & Gas down by 1.12%, PSU down by 0.81%, Realty down by 0.70%, Bankex down by 0.57%, INFRA down by 0.52% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.55%, BHEL up by 1.50%, Wipro up by 1.46%, Hindalco up by 1.22% and Sun Pharma up by 1.01%.

On the flip side, Tata Power down by 2.09%, Axis Bank down by 1.64%, HDFC down by 1.44%, SBI down by 1.11% and GAIL India down by 0.98% 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 8371.35, down by 11.95 points or 0.14% after trading in a range of 8345.60 and 8408.00. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 2.26% and Lupin up by 1.92% and BHEL up by 1.76% and Infosys up by 1.56% and Hindalco up by 1.39%. On the flip side, BPCL down by 4.87%, Cairn India down by 3.09%, NMDC down by 2.98%, Tata Power down by 2.09% and Axis Bank down by 1.69% were the top losers.

The Asian markets were trading on mixed notes; Straits Times increased 23.17 points or 0.71% to 3,306.88, Taiwan Weighted increased 61.72 points or 0.69% to 8,980.67, Hang Seng increased 81.76 points or 0.34% to 24,019.94 and Nikkei 225 increased 195.74 points or 1.14% to 17,392.79.

On the other hand, Shanghai Composite decreased 8.87 points or 0.36% to 2,485.61, KOSPI Index decreased 6.76 points or 0.34% to 1,960.51, Jakarta Composite decreased 0.65 points or 0.01% to 5,048.20 and FTSE Bursa Malaysia KLCI decreased 0.24 points or 0.01% to 1,816.00.

The European markets were trading in green; UK’s FTSE 100 increased 16.63 points or 0.25% to 6,627.67, France’s CAC increased 31.49 points or 0.75% to 4,211.37 and Germany’s DAX increased 76.39 points or 0.83% to 9,287.35.