Benchmarks extend losses; Bankex, TECK drag

Indian equity markets extend losses and are hovering near the lowest point of the day in the late afternoon session on account of selling in frontline blue chip counters. The downside was however capped on report of Foreign direct investment (FDI) in the country, which rose to four-month high of $3.85 billion in May 2015, up by 7 percent compared to the same month of last year. Traders were seen piling position in Consumer Durables, Oil & Gas and Auto sector stocks while selling was witnessed in Bankex, TECK and Capital Goods sector stocks. In scrip specific development, Cairn India was also trading firm on reports that Cairn Energy is set to vote against the merger of Cairn India with Vedanta. SKS Micro was trading firm after the micro-lender reported a 24% growth in net profit in June quarter.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,650 and 28,400 levels respectively. The market breadth on BSE was positive in the ratio of 1491:1192 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 28394.88, down by 110.05 points or 0.39% after trading in a range of 28356.11 and 28578.33. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index was down by 0.01%, while Small cap index up by 0.65%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.81%, Oil & Gas up by 0.52%, Auto up by 0.52%, Realty up by 0.46% and INFRA up by 0.28%, while Bankex down by 0.48%, TECK down by 0.44%, Capital Goods down by 0.41%, IT down by 0.25% and Power down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.12%, Dr. Reddy’s Lab up by 1.94%, Mahindra & Mahindra up by 1.38%, Maruti Suzuki up by 1.04% and NTPC up by 0.62%.

On the flip side, Lupin down by 4.64%, Bajaj Auto down by 4.64%, Tata Steel down by 3.21%, Bharti Airtel down by 1.80% and Hindustan Unilever down by 1.64% were the top losers.

Meanwhile, domestic rating agency India Ratings and Research (Ind-Ra) has said that the Centre's housing for all (HFA) project is expected to give the economy Rs 15-trillion (trn) boost over the next 7 years, though it also cautioned that its success will depend on ramping up existing urban infrastructure, fast tracking approval process and targeting the actual beneficiary.

As per the study, the direct benefit of HFA to the economy is estimated to be Rs 15trn in a seven-year timeframe (FY16-FY22). Funding of the investment of Rs 15trn through public-private partnerships and ramping up the supply of raw materials for construction namely steel and cement are big challenges for the execution of the HFA scheme. Municipal services such as supplying piped water, sewerage, sanitation and municipal solid waste management are also far from being equipped to take on a project of this magnitude in the next seven years. 

The government’s scheme to provide 20 million houses in three phases over FY16-FY22 has a central grant component (Rs100,000 per slum household) going to the state government, and central assistance (Rs150,000 other households) is likely to go directly to households. Also, the central government will provide interest subvention to households at 6.5% for loans up to a 15-year tenor through two nodal agencies – Housing and Urban Development Corporation and National Housing Bank. The rating agency has also said that the government will have to find more resources to finance this, so as to adhere to its fiscal deficit target.

Ind-Ra has said that allied sectors to construction, such as cement, iron and steel, will also grow, depending on the strength of the forward and backward linkages of the construction sector with the rest of the economy. It expects the demand for cement for the scheme alone to be closer to FY15 production levels and steel demand to be higher than the production levels of bars and rods. Local bodies will face challenges in supplying piped water, sewerage, sanitation and municipal solid waste management.

The CNX Nifty is currently trading at 8601.10, down by 32.40 points or 0.38% after trading in a range of 8584.90 and 8654.75. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 6.56%, Tata Motors up by 3.16%, Dr. Reddy’s Lab up by 1.98%, PNB up by 1.26% and Mahindra & Mahindra up by 1.25%.

On the flip side, Lupin down by 4.88%, Bajaj Auto down by 4.72%, Tata Steel down by 3.33%, Zee Entertainment down by 1.87% and Hindustan Unilever down by 1.77% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 0.34 points or 0.02% to 2,065.07, Straits Times increased 6.65 points or 0.2% to 3,365.82, Nikkei 225 increased 90.28 points or 0.44% to 20,683.95, Shanghai Composite increased 97.88 points or 2.43% to 4,123.92 and Hang Seng increased 116.23 points or 0.46% to 25,398.85.

On the other hand, Taiwan Weighted decreased 127.58 points or 1.43% to 8,791.12, Jakarta Composite decreased 2.23 points or 0.05% to 4,904.46 and FTSE Bursa Malaysia KLCI decreased 1.98 points or 0.11% to 1,727.55.

The European markets were trading in green; UK’s FTSE 100 increased 4.53 points or 0.07% to 6,671.87, France’s CAC increased 10.4 points or 0.2% to 5,092.97 and Germany’s DAX increased 26.26 points or 0.23% to 11,546.93.