Markets continue to trade choppy lacking any supportive cues

Indian markets continue to trade choppy with all intraday recovery attempts being sold out lacking any supportive cues. Some early cheers after the government cleared several proposals on the last day of the Budget session, too seems to have faded with the fact that important legislations like goods & services tax (GST) and land acquisition legislation got delayed. There was sector specific movement based on the government’s decisions. Infra stocks continue to trade jubilantly after the government allowed road developers to exit projects two years after they are completed. This will let them monetise operational projects, freeing up funds that can be used to complete others or invest in new ones. Also, National Highways Authority of India to inject funds in languishing projects through loans at a pre-determined rate of return. Fertiliser sector was not very enthusiastic and most of the companies were trading in red, as the government approved the new urea policy which aims to maximize indigenous urea production and promote energy efficiency in units to reduce the subsidy burden on the government. The policy is expected to raise urea production by 20 million tonnes and reduce imports.  RCF was down by 0.50%, NFL was down by 2%, Zuari was down by 0.50%, Coromandel and Chamble Fertilizers too were trading with negative bias. On the positive side, the broader markets were holding up their gains and were trading up by about half a percent.

The BSE Sensex is currently trading at 27128.06, down by 123.04 points or 0.45% after trading in a range of 26948.62 and 27293.99. 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 0.58%, while Small cap index gained 0.52%.

The top gaining sectoral indices on the BSE were INFRA up by 0.50%, Auto up by 0.47%, Oil & Gas up by 0.35%, Realty up by 0.31%, PSU up by 0.29%, while IT down by 1.02%, TECK down by 0.60%, Bankex down by 0.41%, Consumer Durables down by 0.26%, Capital Goods down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.16%, Bharti Airtel up by 1.70%, Cipla up by 1.68%, Hindalco up by 1.61% and Mahindra & Mahindra up by 1.50%. On the flip side Vedanta down by 1.74%, Infosys down by 1.48%, Sun Pharma Inds down by 1.28%, HDFC down by 1.14% and Wipro down by 1.13% were the top losers.

Meanwhile, the government has cleared two major policy initiatives to give a fresh thrust to the highways sector and bring the private sector back on board. The Cabinet Committee on Economic Affairs (CCEA) has given the go-ahead to a comprehensive exit policy for developers aimed at improving the availability of funds in the market and also authorised the National Highways Authority of India (NHAI) to intervene in projects that are near completion but stuck due to a lack of funds.

The government has extended the relaxed exit policy for highway developers to public-private partnership (PPP) projects awarded before 2009. The exit policy would help unlock equity from completed projects making it potentially available for investment in new projects, harmonising conditions uniformly across all concessions signed prior to 2009 with the policy framework for post-2009 contracts which permit divestment of equity up to 100 per cent two years after completion of construction.

The CCEA has also approved fund infusion by National Highways Authority of India (NHAI) as loans in PPP projects which are at advanced stages of completion, but stuck due to lack of additional equity or lenders’ reluctance to provide more loans. The loan was to be recovered along with interest from the toll receipts immediately after the completion of construction. The NHAI has been directed to develop a robust mechanism to determine eligibility of the project as also the extent of funds required to complete projects, in a time bound manner.

The CNX Nifty is currently trading at 8191.40, down by 44.05 points or 0.53% after trading in a range of 8137.30 and 8232.80. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.18%, Bajaj Auto up by 2.06%, Cipla up by 1.63%, Hindalco up by 1.57% and Bharti Airtel up by 1.57%. On the flip side, Lupin down by 3.70%, Vedanta down by 1.90%, Infosys down by 1.56%, Power Grid Corpn. down by 1.49% and Kotak Mahindra Bank down by 1.36% were the top losers.

Asian markets were trading mostly in red Nikkei 225 was down by 194.48 points or 0.98% to 19,570.24, Taiwan Weighted lost 113.28 points or 1.16% to 9,610.83, Hang Seng was down by 30.13 points or 0.11% to 27,219.15, Shanghai Composite declined by 18.03 points or 0.41% to 4,357.73 and Straits Times was lower by 8.31 points or 0.24% to 3,444.86.

On the other hand, FTSE Bursa Malaysia KLCI was up by 3.21 points or 0.18% to 1,806.23,
KOSPI Index gained 6.17 points or 0.29% to 2,120.33 and Jakarta Composite was higher by 40.52 points or 0.78% to 5,246.13.