Benchmarks end flat on penultimate day of F&O expiry

Indian equity benchmarks ended the choppy day of trade on quiet note as investors remained on sidelines on penultimate day of F&O expiry. Disappointing quarterly results from companies such as Tata Motors and Tech Mahindra dampened the sentiments. Meanwhile, the Indian rupee has breached the 64 level to trade at 64.03 per dollar level at the time of equity markets closing as compared to a previous close of 63.98 per dollar. Additionally, cautiousness ahead of GDP data which is scheduled to be released on Friday also weighed on the sentiment.

However, markets showed some strength in late trade and pare most of their initial gains with Sensex ending in green with a gain of one tenth of a percent, while Nifty ending slightly in red. Some support came with Chief Economic Advisor (CEA) Arvind Subramanian pinning hopes on adequate food grain stock helping to keep inflation under control even with below-normal monsoon and pitching for rate cut by the Reserve Bank in its upcoming policy review to boost growth. CEA has though cautioned that the government needs to reconsider levy of one percent additional tax by states over and above GST rate as it could make intra-state movement of goods expensive and hurt the 'Make in India' campaign.

On the global front, European markets made a firm opening and CAC, DAX and FTSE were trading in green in early deals amid the easing of tensions around the Greek situation. Asian shares ended mostly lower as investors worried over Greece’s debt talks and potentially higher US interest rates. Additionally, minutes from the Bank of Japan's policy meeting also dented investor sentiment because it showed that some members felt that consumer prices in the world's third largest economy would not meet the central's bank target in the 2017 fiscal year.

Back home, some support came with report that foreign portfolio investors bought shares worth a net Rs 114.81 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 123.85 crore on May 26, 2015, as per provisional data released by the stock exchanges. Meanwhile, stocks related to banking space remained on buyers’ radar on speculation that the Reserve Bank of India (RBI) is likely to cut its benchmark interest rate by 25 basis points to 7.25 per cent when it meets early next week and make a similar move before December. Additionally, Shares of public sector oil marketing companies (PSU OMCs) advanced on decline in global crude oil prices.

The NSE’s 50-share broadly followed index Nifty declined marginally by around five points and ended below the psychological 8,350 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over thirty points to finish above the psychological 27,550 mark. Broader markets too struggled to get any traction and ended the session mixed. The market breadth remained in favor of decliners, as there were 1,196 shares on the gaining side against 1,435 shares on the losing side while 109 shares remain unchanged.

Finally, the BSE Sensex gained 33.25 points or 0.12% to 27564.66, while the CNX Nifty lost 4.75 points or 0.06% to 8,334.60.

The BSE Sensex touched a high and a low of 27595.80 and 27363.72, respectively. The BSE Mid cap index was up by 0.06%, while Small cap index down by 0.03%.

The top gainers on the Sensex were BHEL up by 3.34%, ONGC up by 2.70%, Axis Bank up by 2.26%, Coal India up by 2.11% and Bharti Airtel up by 1.91%. On the flip side, Tata Motors down by 5.12%, Mahindra & Mahindra down by 2.80%, Infosys down by 2.00%, Sun Pharma down by 1.97% and GAIL India down by 1.84% were the top losers.

The gaining sectoral indices on the BSE were PSU up by 1.51%, Bankex up by 1.19%, Oil & Gas up by 0.97%, Consumer Durables up by 0.95% and Capital Goods up by 0.71% while, Auto down by 2.11%, IT down by 1.88%, TECK down by 1.42%, INFRA down by 0.59% and Healthcare down by 0.36% were the losing indices on BSE.

Meanwhile, the government has constituted a 10-member committee to be headed by former finance secretary Vijay Kelkar, to revitalise the public private partnership (PPP) mode for infrastructure development. The panel has been entrusted to suggest ways on improving capacity building within the government for effective implementation of PPP projects.

The panel’s terms of reference of the committee include reviewing the experience of PPP policy, analysis of risks involved in such projects in different sectors and existing framework of sharing of such risks between project developer and government. It would also deliberate upon design modifications to contractual arrangements of PPP; examine international best practices as well as institutional context.

Among the other members of the committee are CS Rajan, chief secretary, Rajasthan government; SB Nayar, CMD, IIFCL; Shekhar Shah, director general, NCAER; Pradeep Kumar, MD, CBG, SBI; Vikram Limaye, MD, IDFC; PS Behuria, former IRS and Sudipto Sarkar, Barrister-at-law, Kolkata. It will have a representative, not below the rank of joint secretary, from the road ministry as its member, while Sharmila Chavaly, joint secretary, department of economic affairs, finance ministry will be the member secretary.

Finance Minister Arun Jaitley in his budget speech for 2015-16 had made an announcement regarding re-visiting the existing PPP mode to execute such projects. The panel is likely to consult various stake holders in private sector, government sector, legal experts, banking/financial institutions and academia while firming up recommendations. The Committee has been asked to submit its report within three months.

The CNX Nifty touched a high and low of 8,342.85 and 8,277.95 respectively.

The top gainers on Nifty were BHEL up by 3.81%, Idea Cellular up by 2.98%, ONGC up by 2.78%, Bharti Airtel up by 2.46% and NMDC up by 2.36%. On the flip side, Tech Mahindra down by 14.72%, Tata Motors down by 4.99%, Mahindra & Mahindra down by 3.45%, Sun Pharmaceuticals Industries down by 2.23% and GAIL (India) down by 2.11% were the top losers.

European Markets were trading in the green; Germany's DAX was up by 0.07%, France's CAC up by 0.48% and UK's FTSE was up by 0.53%.

The Asian markets closed mostly in red on Wednesday, after a sell-off on Wall Street, but Shanghai extended its winning streak to seven successive sessions. The International Monetary Fund (IMF) stated that China should step up fiscal support for its economy if growth dips below 6.5 percent this year, or prepare to take steps to rein in credit and investment if growth surprises on the upper side. The IMF expects China’s annual economic growth to be 6.8 percent this year, before slowing further to 6.25 percent in 2016. Seeking to become more competitive, Indonesia wants to bring annual inflation lower, nearer to the rates managed by its Southeast Asian neighbors. Bank Indonesia Governor Agus Martowardojo stated that the central bank aims to bring down the inflation rate to between 2.5-4.5 percent in 2018, from a target of 3-5 percent this year.

The Bank of Japan stated in minutes of its April board meeting released that inflation in Japan won’t hit a sustained 2% pace this year and any pickup in prices could take considerable time. A key going forward will be how firms move to raise prices and wages, but for now there is no need for further easing. At the April 30 meeting, the BoJ held pat on monetary policy with member Takahide Kiuchi once again dissenting and calling for the stimulus of government bond buying to be cut to 45 trillion yen annually from 80 trillion yen annually now. Singaporean GDP rose to a seasonally adjusted 2.6%, from 2.1% in the preceding quarter.