Benchmarks continue weak trade; Bankex, Capital Goods drag

Indian equity markets continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were under pressure after Reserve Bank of India (RBI) Governor Raghuram Rajan has asked central banks from across the world to define new rules of the game as he warned that the global economy may be slipping into problems similar to the Great Depression of the 1930s. Traders were seen piling up position in IT, Realty and Consumer Durables stocks, while selling was witnessed in Bankex, Capital Goods and Oil & Gas stocks. Hectic selling activity was witnessed in banking stocks after RBI’s stress tests surprisingly showed private banks are likely to see a significant jump in bad loans. In scrip specific development, GVK Power & Infrastructure was trading firm on reports that the company is going to launch an Initial Public Offering of its airport arm. The company is planning to raise Rs 3,500 crore by listing its airport arm, GVK Airport Developers that operates in Mumbai & Bangalore airports.

On the global front, the Asian markets were trading mostly in red, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,400 and 27,900 levels respectively. The market breadth on BSE was negative in the ratio of 1096:1401 while 122 scrips remained unchanged.

The BSE Sensex is currently trading at 27810.58, down by 85.39 points or 0.31% after trading in a range of 27675.16 and 27921.86. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was down by 0.18%, while Small cap index up by 0.10%.

The gaining sectoral indices on the BSE were IT up by 1.31%, Realty up by 1.25%, Consumer Durables up by 1.05%, TECK up by 0.71% and Auto up by 0.37% while, Bankex down by 0.91%, Capital Goods down by 0.90%, Oil & Gas down by 0.70%, INFRA down by 0.70% and Metal down by 0.65% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.66%, Cipla up by 1.37%, TCS up by 1.30%, Dr. Reddy’s Lab up by 1.26% and Bajaj Auto up by 1.15%.

On the flip side, GAIL India down by 2.93%, Vedanta down by 2.50%, Bharti Airtel down by 2.07%, BHEL down by 2.01% and ITC down by 1.47% were the top losers.

Meanwhile, after the launch of three schemes by Prime Minister Narendra Modi, operational guidelines have been set by the Urban Development Ministry for execution, approval of projects under these three missions (Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All).

For AMRUT scheme, a set of 11 reforms need to be executed in 4 years, which includes promoting e-governance, improving collection of various taxes, fee and user charges, augmenting double entry accounting, constitution and professionalization of municipal cadre, preparation of GIS-based master plans, devolution of funds and functionaries to urban local bodies, review of building by-laws, setting up financial intermediaries for pooling and disbursement of resources, credit rating of urban local bodies, energy and water audit and achieving Swachh Bharat Mission. It also stated that, States need to transfer funds to Urban local bodies within 7 working days of transfer by the Centre. Funds will be allocated according to the urban population and number of towns/cities in each State/UT.

Ministry has stated that the central resources for Smart Cities mission will be used only for infrastructure projects that have larger public benefits. Special Purpose Vehicles (SPVs) will be provided for implementation of Smart City plans with 50-50 equity of States and Urban local bodies. According to the guidelines, 500 acres is the minimum area norm for retrofitting; 50 acres for re-development; 250 acres for Greenfield projects. The criteria will be 50 % for North-Eastern and Himalayan States. About 10 per cent of energy needs are to be met from renewable sources, 80 % of building construction to be green and 35 % of housing in green field projects to be for Economically Weaker Section (EWS), in smart cities. The cities which are been selected will be provided Rs 100cr per year.

In the scheme of Housing for all, the ownership of the houses will be in the name of woman or jointly with husband. It also stated that the houses of 30sq. m carpet area to be built for EWS category. If there is non availability, the States can accept their beneficiaries and increase the area while meeting the additional expenses. Rs 1 lakh per house will be provided by the Centre for slum redevelopment project in the State to make them operable. Once the loan is sanctioned to the beneficiary an interest subvention at 6.50% will be paid soon in order to bring down the EMI.

The CNX Nifty is currently trading at 8382.85, down by 15.15 points or 0.18% after trading in a range of 8339.70 and 8408.55. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 3.12%, Ultratech Cement up by 1.75%, Infosys up by 1.72%, ACC up by 1.47% and Bajaj Auto up by 1.39%.

On the flip side, GAIL India down by 2.97%, Vedanta down by 2.31%, Cairn India down by 2.29%, BHEL down by 1.95% and Kotak Mahindra Bank down by 1.89% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 481.88 points or 1.78% to 26,663.87, Shanghai Composite decreased 334.9 points or 7.4% to 4,192.88, Nikkei 225 decreased 65.25 points or 0.31% to 20,706.15, Straits Times decreased 22.73 points or 0.68% to 3,327.14, Taiwan Weighted decreased 13.77 points or 0.15% to 9,462.57, FTSE Bursa Malaysia KLCI decreased 4.86 points or 0.28% to 1,711.95 and Jakarta Composite decreased 2.28 points or 0.05% to 4,917.76.

On the other hand, KOSPI Index increased 5.2 points or 0.25% to 2,090.26.

The European markets were trading in red; UK’s FTSE 100 decreased 60.01 points or 0.88% to 6,747.81, Germany’s DAX decreased 56.52 points or 0.49% to 11,416.61 and France’s CAC decreased 27.22 points or 0.54% to 5,014.49.