Markets languish to day’s low; Nifty trades sub 8,250 mark

Benchmark equity indices after slipping below neutral line continued trading lower as weaker regional shares offset optimism over additional reforms a day after the government passed an executive order to ease land-acquisition rules, encouraging market-participants to book profits off the table ahead of the year end. Languishing at day’s low, both Sensex and Nifty were trading below crucial 27,350 and 8,250 levels respectively, with losses of around two tenths of a percent. However, broader indices managed to outperform in subdued trade, with gains around 0.10%-0.20%.

On the global front, Asian shares traded lower as political uncertainty in Greece and a selloff in commodities weighed on investors' appetite. Sentiments took a hit after politicians in the country failed for a third time to endorse Prime Minister Antonis Samaras' preferred candidate, implying that general elections will occur early next year, potentially jeopardizing Greece's hard-won economic recovery.

Closer home, bourses’ losses were mainly endorsed by stocks belonging from Oil & Gas, Metal and Auto counters. Additionally, banking stocks also tanked after Reserve Bank of India (RBI), in its Financial Stability Report (FSR), pointed that while Indian economy was in better position on account slowing inflation, political stability and a lower current account deficit, the banking sector remains subdued owing to weak demand for credit and pressure on asset quality. On the flip side, stocks from Consumer Durable, Capital Goods and Power counters were limiting further downside of the markets. Besides, Infra stocks gained ground after Union Cabinet approved an ordinance to amend the contentious land acquisition act, which would relax some limitations including a 'consent clause' which so far has acted as obstacle for power, highways, housing, defence and infrastructure projects, thereby holding up the economy's growth potential. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1319:1202; while 110 shares remained unchanged.

The BSE Sensex is currently trading at 27334.57, down by 61.16 points or 0.22% after trading in a range of 27312.29 and 27478.30. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index up by 0.10%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.97%, Capital Goods up by 0.91%, Power up by 0.77%, IT up by 0.30% and INFRA up by 0.27% while, Oil & Gas down by 1.32%, Metal down by 1.14%, Bankex down by 0.32%, PSU down by 0.23% and Auto down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.10%, NTPC up by 0.86%, Larsen & Toubro up by 0.68%, Dr. Reddys Lab up by 0.65% and Hindustan Unilever up by 0.65%. On the flip side, Reliance Industries down by 1.84%, Tata Steel down by 1.77%, Sesa Sterlite down by 1.65%, ONGC down by 1.11% and Hero MotoCorp down by 0.93% were the top losers.

Meanwhile, in a bid to ease the process of acquiring land, the Union Cabinet approved an ordinance to amend the contentious land acquisition act, which would relax some limitations including a 'consent clause' which so far has acted as obstacle for power, highways, housing, defence and infrastructure projects, thereby holding up the economy's growth potential. With this, the Cabinet has amended the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The “consent clause” requires consent of 70% -80% of land owners, if acquisitions are meant for defence and defence production, rural infrastructure including electrification, housing for poor and affordable housing, industrial corridors and infrastructure projects including projects under Public-Private Partnership mode, where ownership the land continues to be vested with the government. The amendments in the ordinance have been approved to unshackle defence, infrastructure and rural power projects caught in land acquisition procedures.

Further, such acquisitions will also be exempt from Social Impact Assessment (SIA) and the application of Food Security Act, two other requirements laid down under the Land Acquisition Act which were widely identified as factors hurdling projects and development. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, was brought in last year by the previous UPA government and was touted as landmark legislation. But, the Act has been criticized by the industry and certain other sections for making land acquisition more complicated and tedious.

The CNX Nifty is currently trading at 8227.20, down by 19.10 points or 0.23% after trading in a range of 8220.55 and 8268.25. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were BHEL up by 1.06%, Tech Mahindra up by 1.05%, NTPC up by 0.82%, Dr. Reddys Lab up by 0.71% and Larsen & Toubro up by 0.67%. On the flip side, Reliance Industries down by 1.82%, Cairn India down by 1.80%, Sesa Sterlite down by 1.65%, Tata Steel down by 1.65% and Ultratech Cement down by 1.26% were the top losers.

Asian markets were trading lower; with Nikkei 225 trading lower by 279.07 points or 1.57% to 17,450.77; Hang Seng trading lower by 243.09 points or 1.02% to 23,530.09; Taiwan Weighted trading lower by 17.85 points or 0.19% to 9,268.43; Shanghai Composite trading lower by 16.15 points or 0.51% to 3,151.87; KOSPI Index trading lower by 12.27 points or 0.64% to 1,915.59; FTSE Bursa Malaysia KLCI trading lower by 3.3 points or 0.19% to 1,765.11 and  Straits Times trading lower by 1.42 points or 0.04% to 3,366.27. On the flip side, Jakarta Composite trading higher by 12.76 points or 0.25% to 5,191.13 was the only gainer amongst Asian pack.