Benchmarks extend southward journey for second straight session

Extending their southward journey, Indian equity benchmarks ended the session choppy day of trade with a cut of around half a percent as investors remained on sidelines ahead of data on industrial production for January and consumer price index for February scheduled to be announced on Thursday. Moreover, factory growth probably lost more momentum in January while inflation remained below the Reserve Bank of India's target last month, bolstering chances of further interest rate cuts.

However, losses remained capped as some support came in with OECD’s latest report, which has said that India’s economic growth is firming up, while projecting stable growth momentum for most major economies. Meanwhile, foreign direct investment (FDI) inflows into the services sector grew by 44 per cent to $ 2.29 billion in the April-December period of the current fiscal, as compared to $ 1.59 billion during April-December, 2013-14.

Global cues remained sluggish with European markets were trading in red in early deals despite the European Central Bank’s new bond buying campaign continuing to push down the euro and the bloc’s already record-low borrowing costs. Asian markets ended mostly lower as markets overlooked better-than-expected Chinese inflation data and a positive lead from Wall Street. Meanwhile, the Japanese and South Korean currencies hit new lows against the U.S. dollar on the back of the underlying theme of monetary policy divergence.

Back home, investors failed to draw any sense of relief from report that foreign portfolio investors (FPIs) bought shares worth a net Rs 838.30 crore yesterday, as per provisional data released by the stock exchanges. Depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 62.67 per dollar at the time of equity markets closing compared with its previous close of 62.55. Meanwhile, realty stocks witnessed sharp drubbing after Minister of Parliamentary Affairs M.Venkaiah Naidu said in the Lok Sabha yesterday, March 9, 2015, that the government is willing to consider some further amendments to ensure minimum land acquisition based on the views and suggestion of the opposition parties. However, telecom stocks rang loud on the buzz that auction of telecom spectrum has reached the final stage.

The NSE’s 50-share broadly followed index Nifty declined by over forty points to end below the psychological 8,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by over one hundred and thirty points to end below its crucial 28,750 mark. Broader markets too struggled to get any traction during the trade and ended the session with a cut of around half a percent. The market breadth remained in favor of decliners, as there were 1,258 shares on the gaining side against 1,585 shares on the losing side while 122 shares remain unchanged.

Finally, the BSE Sensex plunged by 134.91 points or 0.47% to 28709.87, while the CNX Nifty declined by 44.70 points or 0.51% to 8,712.05.

The BSE Sensex touched a high and a low of 28949.11 and 28584.49, respectively. The BSE Mid cap index was down by 0.38%, while Small cap index was down by 0.28%.

The top gainers on the Sensex were Bharti Airtel up by 7.09%, Coal India up by 3.84%, Mahindra & Mahindra up by 1.74%, BHEL up by 0.80% and Bajaj Auto up by 0.75%. On the flip side, HDFC down by 3.89%, Hindalco down by 2.06%, Hindustan Unilever down by 1.81%, Sun Pharma down by 1.58% and Tata Power down by 1.34% were the top losers.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.20%, TECK up by 0.78%, Metal up by 0.58%, Infrastructure up by 0.51% and Auto up by 0.37%, while Realty down by 1.83%, Oil & Gas down by 0.78%, Power down by 0.63%, Bankex down by 0.49% and Capital Goods down by 0.41% were the top losing indices on BSE.

Meanwhile, government is planning to lay 30 kms of roads per day in the next two years, up from the current level of 11 kms a day. Road Transport and Highways Minister Nitin Gadkari has said that at present, 11 kms of road are being laid each day which is likely to go up to 15 kms by the end of March this year.

The Minister further stated that the government would come out with a new 'model agreement' for road projects and  now it has been decided that unless possession of land to the extent of at least 80 per cent for BOT and 90 per cent EPC projects is available, no project shall be awarded.Highway minister also pointed that National Highways Authority of India (NHAI) has been facing serious delays in project completion on account of various factors including land accquisition, environment and forest clearance. The ministry is currently working on restructuring the NHAI for greater transparency and faster decision making at the body.

The government is also planning to revive the proposal to build high speed roads in the country. The earlier proposal of executing expressways in the country could not move forward due to delays in land acquisition and construction of existing roads. Meanwhile, the government is also considering one time fund infusion to revive and physically complete some of the languishing projects being implemented on Public-Private-Partnership (PPP) mode of delivery only.

The CNX Nifty touched a high and low of 8,778.00 and 8,677.35 respectively.

The top gainers on Nifty were Bharti Airtel up by 6.87%, Coal India up by 4.00%, NMDC up by 1.96%, Mahindra & Mahindra up by 1.93% and Zee Entertainment Enterprises up by 1.74%. On the flip side, DLF down by 4.44%, HDFC down by 3.62%, Jindal Steel & Power down by 2.54%, Hindustan Unilever down by 2.10% and Hindalco Industries down by 2.06% were the top losers.

European Markets were trading in the red; Germany's DAX was down by 0.69%, UK's FTSE 100 was down by 0.60% and France's CAC was down by 0.63%.

The Asian markets ended mostly in red on Tuesday, with a rebound in Chinese inflation in February was trumped by data showing prices at factory gates had plunged, raising fears about deflation in the mainland economy. South Korea’s central bank is likely to keep interest rates unchanged on Thursday but cut them next month when it revises its forecasts to reflect a more tepid economic recovery than initially expected. In its last forecast made in January, the Bank of Korea cut this year’s growth projection from 3.9% to 3.4%, while adding quarterly growth would remain around 1% throughout 2015. The pace of Chinese inflation unexpectedly picked up in February, but producer prices continued to slide, underscoring the intense pressure on profit margins at Chinese companies and adding urgency to policymakers’ efforts to find new ways to support growth. The producer price index (PPI) declined 4.8 percent in February - the most negative reading posted since Oct 2009 - extending a long-running factory deflation cycle that began in 2012 to nearly three years. Chinese CPI rose to an annual rate of 1.4%, from 0.8% in the preceding month. Japan’s M2 Money Stock rose to a seasonally adjusted 3.5%, from 3.4% in the preceding month.