Markets continue to languish into negative territory; Nifty holds above 8450 level

Local equity markets continue to languish into negative territory in absence of any positive trigger which could lifts the markets higher, rather prevailing caution ahead of the expiry of November equity derivatives on Thursday and Growth data for July-September is due on Friday has been weighing on the sentiment right from the start of the trade. Despite the subdued trend, both Sensex and Nifty were trading above mentally crucial 28,300 and 8,450 levels respectively. Meanwhile, broader indices continuing to outperform larger counterparts were trading with gains in the range of 0.50%-0.85%.

On the global front, Asian shares were trading mostly higher, led by gains of China shares as Friday’s interest rate cut continued to reverberate through the market. Gains were more moderate than in the previous two sessions, with trading subdued in the absence of market-moving economic data and after U.S. stocks broke a three-session streak of record highs Tuesday.

Closer home, most of the sectoral indices were holding up into positive territory, however stocks from Technology, Information Technology and Banking counters, reeling under pressure were the worst performers of the session. On the flip side, stocks from Realty, Power and Fast Moving Consumer Goods counters were the prominent gainers of the session. Infra stocks were holding in green after Reserve Bank of India (RBI) underscored that India could give banks more flexibility to restructure distressed loans in a bid to steer funding towards cash-strapped infrastructure projects.

Meanwhile, in stock-specific activity, India's biggest cigarette maker, ITC gained over 2%, recovering from a 5.2% fall on Tuesday as India moves toward ban on loose cigarettes to deter smoking. Price elasticity, product mix and introduction of smaller pack sizes could limit the impact on volumes for ITC. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1489:1112; while 93 shares remained unchanged.

The BSE Sensex is currently trading at 28307.92, down by 30.13 points or 0.11% after trading in a range of 28261.31 and 28379.27. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index up by 0.88%.

The gaining sectoral indices on the BSE were Realty up by 1.40%, Power up by 1.09%, FMCG up by 0.82%, PSU up by 0.63% and INFRA up by 0.45% while, TECK down by 0.53%, IT down by 0.46% and Bankex down by 0.40% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 3.09%, Cipla up by 1.69%, ITC up by 1.63%, BHEL up by 1.43% and Hero MotoCorp up by 1.07%. On the flip side, Bharti Airtel down by 1.77%, Bajaj Auto down by 1.58%, ICICI Bank down by 1.30%, Hindalco down by 1.24% and Wipro down by 1.04% were the top losers.

Meanwhile, in order to administer and manage sick public sector units (PSUs) that can be revived, a government panel has recommended formation of a joint venture company funded by seed equity from Maharatna and other cash-rich central public sector enterprises (CPSEs).

The committee, headed by NTPC Chairman Arup Roy Choudhury, had submitted its report in October 2014 including analysis of sick CPSEs and recommendations for formation of a company to revive sick state run enterprises. Besides, the Panel’s report also included identifying sources from which funds may be raised for the proposed entity as equity capital and to recommend organisational structure of the proposed entity and its interface with the Ministries.

Till October 31, 2014, the government has approved the revival of 48 CPSEs and closure of 4 CPSEs on the basis of recommendations of the Board for Reconstruction of Public Sector Enterprises (BRPSE). The move envisages total fund/non-fund based assistance of Rs 41,139 crore including cash assistance of Rs 11,135 crore and non-cash assistance of Rs 30,004 crore.

Earlier in November, Finance Minister Arun Jaitley had stressed that the government may privatise some loss making public sector units (PSUs). India has 79 loss making PSUs, of which 49 are sick enterprise.

The CNX Nifty is currently trading at 8452.60, down by 10.50 points or 0.12% after trading in a range of 8438.65 and 8468.70. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.98%, Asian Paints up by 2.33%, Indusind Bank up by 2.12%, ACC up by 1.74% and Cipla up by 1.72%. On the flip side, Zee Entertainment down by 4.72%, Bharti Airtel down by 1.88%, Jindal Steel & Power down by 1.77%, HCL Tech. down by 1.73% and Bajaj Auto down by 1.66% were the top losers.

Asian shares were trading mostly higher; with KOSPI Index advanced by 0.63 points or 0.03% to 1,980.84; FTSE Bursa Malaysia KLCI gained 4.31 points or 0.23% to 1,842.87; Taiwan Weighted rose 6.15 points or 0.07% to 9,122.39; Shanghai Composite firmed up by 29.98 points or 1.17% to 2,597.58; Hang Seng added 148.13 points or 0.62% to 23,992.04.

On the flip side, Nikkei 225 declined by 24.04 points or 0.14% to 17,383.58; Jakarta Composite slid by 7.32 points or 0.14% to 5,111.62 and Straits Times shed 1.19 points or 0.04% to 3,343.80.