Benchmarks continue firm trade in late afternoon session

Indian equity markets continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on optimistic note as International Monetary Fund in the World Economic Outlook projected that India is set to become the world’s fastest-growing major economy in about two years from now. Traders were seen piling positions in Consumer Durables, TECK and Capital Goods stocks while selling as witnessed in FMCG, Metal and Power sector stocks. In scrip specific development, Navin Fluorine International was trading firm after reporting its net profit which more than doubled to Rs 14.20 crore in the third quarter ended December 31, 2014 (Q3), on back of strong operational income. SpiceJet was trading under pressure after Mumbai Airport asked the budget carrier to immediately pay the pending dues of Rs 5 crore and provide a bank guarantee of Rs 15 crore.

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 8,700 and 28,800 levels respectively. The market breadth on BSE was negative in the ratio of 1127:1676 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 28855.74, up by 71.07 points or 0.25% after trading in a range of 28792.57 and 28958.10. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.34%, while Small cap index down by 0.32%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.42%, TECK up by 0.97%, Capital Goods up by 0.91%, IT up by 0.73%, Infra up by 0.45% while, FMCG down by 1.92%, Metal down by 1.06%, Power down by 0.45%, Realty down by 0.39%, Oil & Gas down by 0.32% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.62%, HDFC up by 3.08%, Hindustan Unilever up by 3.01%, SBI up by 2.44% and Sun Pharma up by 1.74%. On the flip side, ITC down by 4.57%, Sesa Sterlite down by 2.70%, Cipla down by 2.26%, Tata Motors down by 1.77% and Tata Steel down by 1.60% were the top losers.

Meanwhile, with an aim to boost the infrastructure development in the country, the Ministry of Road Transport and Highways is persuading the Employees' Provident Fund Organisation (EPFO) to lend its support by investing in an upcoming issue of infrastructure bonds by the National Highways Authority of India. However, the EPFO has sought government guarantee before committing any funds for investment as NHAI does not have net worth. The EPFO had about Rs 2,95,095 crore accumulated in the accounts of its members at the end of March 2014. 

The government requires at least Rs 1,80,000 crore to finance highway projects in the next financial year. The sector requires long term funding and EPFO’s fund tenure adequately match with the investment period required to finance highway projects. On the other hand, banks have become wary of lending to road projects because of delays in approvals and land acquisition.

The NHAI is likely to issue bonds of AAA rating, which are considered to have the highest degree of safety. The government could also use a cess on petrol as a predictable revenue source to assure the EPFO.

The government has identified the development of infrastructure a most critical prerequisite for sustaining the present growth momentum of the economy. India would require around $1 trillion in the 12th five year plan (2012-2017) to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

The CNX Nifty is currently trading at 8724.40, up by 28.80 points or 0.33% after trading in a range of 8689.60 and 8741.85. There were 26 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 3.98%, Bharti Airtel up by 3.76%, PNB up by 3.42%, Hindustan Unilever up by 3.39% and HDFC up by 3.11%. On the flip side, ITC down by 4.45%, Sesa Sterlite down by 2.77%, Cipla down by 2.76%, NMDC down by 1.88% and Jindal Steel & Power down by 1.77% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 2.92 points or 0.15% to 1,921.23, Straits Times increased 6.55 points or 0.2% to 3,340.57, FTSE Bursa Malaysia KLCI increased 11.14 points or 0.64% to 1,761.25, Jakarta Composite increased 25.9 points or 0.5% to 5,191.99, Taiwan Weighted increased 68.02 points or 0.74% to 9,319.71, Shanghai Composite increased 150.56 points or 4.74% to 3,323.61 and Hang Seng increased 401.42 points or 1.68% to 24,352.58.

On the other hand, Nikkei 225 decreased 85.82 points or 0.49% to 17,280.48.

The European markets were trading mostly in red; Germany’s DAX decreased 23.85 points or 0.23% to 10,233.28, France’s CAC decreased 4.68 points or 0.11% to 4,441.34 and UK’s FTSE 100 increased 46.66 points or 0.7% to 6,666.76.