Benchmarks trim losses; trade continues in red

Indian equity markets trimmed losses and continued to trade in red in the late afternoon session on account of selling in frontline blue chip counters. Investors were cautious after a poll report showed that food prices probably fueled a sharp rise in India’s retail inflation in December after the record low struck the previous month, weighing against chances of an early interest rate cut by the Reserve Bank of India. Traders were seen piling positions in IT, TECK and Consumer Durables stocks while selling was witnessed in Realty, Infra and Power sector stocks. In scrip specific development, Infosys was trading firm on reporting better-than-estimated earnings for the third quarter of FY15. 8K Miles Software Services was trading in green after the company reported strong earnings for the third quarter of fiscal 2015.

On the global front, the Asian markets were trading mostly in green while the European markets were trading mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,200 and 27,200 levels respectively. The market breadth on BSE was negative in the ratio of 1164:1586 while 99 scrips remained unchanged.

The BSE Sensex is currently trading at 27259.07, down by 15.64 points or 0.06% after trading in a range of 27119.63 and 27507.67. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.39%, while Small cap index down by 0.07%.

The gaining sectoral indices on the BSE were IT up by 2.51%, TECK up by 1.63%, Consumer Durables up by 0.46%, Oil & Gas up by 0.26% while, Realty down by 1.94%, INFRA down by 1.46%, Power down by 1.44%, Bankex down by 0.87%, Capital Goods down by 0.74% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 4.28%, Infosys up by 3.84%, Dr. Reddy’s Lab up by 2.27%, Cipla up by 2.04% and Wipro up by 1.55%. On the flip side, Bajaj Auto down by 3.80%, NTPC down by 3.52%, ICICI Bank down by 2.52%, ITC down by 2.33% and Axis Bank down by 2.26% were the top losers.

Moreover, industry body PHDCCI, in its latest report, has highlighted that Indian Government will have to undertake a massive provisioning of Rs 26 lakh crore for the next five years beginning 2015 to finance infrastructure projects to provide a fillip to 'Make in India' campaign and help the economy attain 7-8 percent growth. Investment norms for pension funds and for insurance companies will have to be liberalised further to utilise their corpus to part finance infrastructure projects.

The report further added that out of the estimated Rs 26 lakh crore almost 80 percent of the amount will be needed for  for infrastructure projects such as power, roads and urban infrastructure. In roads, investments would be driven towards building national highways and state roads, whereas in power, generation will continue to account for the largest share of investments. Referring to urban infrastructure, municipal bodies are likely to require significant investments for constructing urban roads, expanding its transport and revamping water supply and sewerage infrastructure.

On the source of funding, PHDCCI stressed that 70 percent of the projected Rs 26 lakh crore investment financing will have to be funded through debt, with banks remaining the largest source of finance. External commercial borrowings (ECBs) may provide funds to the extent of 14 percent and the remaining amount is expected to come through bonds issuance. However, the report also raised concern over the asset-liability mismatch for banks, underscoring that it would be difficult for banks alone to finance infrastructure projects as infrastructure project loans have long tenures of 10 to 15 years while bank deposits, the main source of funds, typically have a maturity of less than three years.

The CNX Nifty is currently trading at 8220.30, down by 14.30 points or 0.17% after trading in a range of 8190.80 and 8303.30. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 4.08% and Infosys up by 3.83% and Tech Mahindra up by 3.19% and Dr. Reddy’s Lab up by 2.24% and Cipla up by 2.15%.

On the flip side, DLF down by 4.73%, Bajaj Auto down by 3.90%, NTPC down by 3.69%, Jindal Steel & Power down by 3.23% and ICICI Bank down by 2.65% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.23 points or 0.13% to 1,730.29, Jakarta Composite increased 9.64 points or 0.18% to 5,221.47, KOSPI Index increased 20.05 points or 1.05% to 1,924.70, Nikkei 225 increased 30.63 points or 0.18% to 17,197.73 and Hang Seng increased 84.42 points or 0.35% to 23,919.95.

On the other hand, Taiwan Weighted decreased 22.45 points or 0.24% to 9,215.58, Straits Times decreased 12.44 points or 0.37% to 3,332.67 and Shanghai Composite decreased 8.04 points or 0.24% to 3,285.41.

The European markets were trading mostly in red; UK’s FTSE 100 decreased 4.16 points or 0.06% to 6,565.80, Germany’s DAX decreased 0.45 points or 0% to 9,837.16 while, France’s CAC increased 0.74 points or 0.02% to 4,260.93.