Benchmarks trade cautiously ahead of WPI data

Indian equity benchmarks are trading on a choppy note with Sensex and Nifty swinging between negative and positive zone ahead of Wholesale Price Index (WPI) inflation data for October 2014, to be released later in the day. Nevertheless, markets managed to trade in green terrain in early deals as sentiments remained slightly positive on report that foreign portfolio investors bought shares worth a net Rs 690.61 crore yesterday, as per provisional data.

On the global front, the US markets ended modestly higher and the Dow surged to a record, offsetting declines in small-cap and energy shares. Good earnings announcements from Wal-Mart gave the initial lead, while the news on the merger-and-acquisition front also generated some positive sentiment. The Asian markets were trading mixed at this point of time with Japanese market was trading lower despite the dollar touching a seven-year high versus the yen amid speculation that Prime Minister Shinzo Abe will call an early election.

Back home, on the sectoral front, oil and gas, realty and public sector undertaking witnessed the maximum gain in trade, while healthcare and power remained the only losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1257 shares on the gaining side against 817 shares on the losing side while 70 shares remain unchanged.

The BSE Sensex opened at 27949.54; around 9 points higher as compared to its previous closing of 27940.64, and has touched a high and a low of 28020.95 and 27912.90 respectively. The BSE Sensex is currently trading at 27987.74, up by 47.10 points or 0.17%. There were 17 stocks advancing against 13 stocks declining on the index.

The overall market breadth remained in the favour of advances with 58.63% stocks advancing against 38.11% declines. The broader indices were trading in the green; the BSE Mid cap index was up by 0.65%, while Small cap index up by 0.61%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.07%, Realty up by 0.81%, PSU up by 0.77%, Consumer Durables up by 0.73% and Auto up by 0.72%, while Healthcare down by 0.46% and Power up by 0.01% were the only loses on the index.

The top gainers on the Sensex were GAIL India up by 2.58%, Bajaj Auto up by 1.85%, ONGC up by 1.48%, Coal India up by 1.34% and Tata Motors up by 1.20%. On the flip side, Tata Power down by 2.65%, Cipla down by 1.74%, Dr. Reddys Lab down by 1.41%, Hindustan Unilever down by 1.24% and Sun Pharma down by 0.96% 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 opened at 8,360.70; around 3 point higher as compared to its previous closing of 8,357.85, and has touched a high and a low of 8,381.75 and 8,346.80 respectively.

The CNX Nifty is currently trading at 8371.55, up by 13.70 points or 0.16%. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.76%, Bajaj Auto up by 1.92%, Coal India up by 1.51%, ONGC up by 1.37% and Tata Motors up by 1.21%. On the flip side, Tata Power down by 2.54%, Cipla down by 1.69%, Dr. Reddys Lab down by 1.19%, Hindustan Unilever down by 1.16% and Grasim Industries down by 1.02% were the top losers.

Asian markets were trading mixed; Hang Seng gained 18.29 points or 0.08% to 24,038.23, Straits Times improved 5.42 points or 0.16% to 3,310.35, Jakarta Composite spurted by 4.39 points or 0.09% to 5,053.06 and Taiwan Weighted was up by 0.83 points or 0.01% to 8,981.50.

On the flip side, Nikkei 225 tumbled by 7.81 points or 0.04% to 17,384.98, KOSPI Index dipped 14.39 points or 0.73% to 1,946.12, Shanghai Composite slipped by 12.89 points or 0.52% to 2,472.71 and FTSE Bursa Malaysia KLCI was down by 3.81 points or 0.21% to 1,812.00.