Benchmarks trade near neutral line in early deals on Friday

After falling sharply in last session, Indian equity markets have made a flat but positive opening and are now trading with marginal gains on selective buying by funds and retail investors. Traders were getting encouragement with Prime Minister Narendra Modi’s statement that infrastructure could play a pivotal role in bolstering India's economic growth, he has said that concerted efforts have led to rolling out of stuck projects worth Rs 4 lakh crore. However, gains remained capped on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 991.87 crore on November 5, 2015, as per provisional data released by the stock exchanges. Further, cautiousness is likely to prevail in the markets as investors cautiously wait the Bihar poll outcome after the Thursday exit poll suggested a close contest between NDA and the Nitish Kumar-led Mahagatbandhan. On the sectoral front, traders were seen piling up position in IT, TECK, Consumer Durables, Realty and FMCG, while selling was witnessed in Metal, Power, PSU, Auto and Oil & Gas.

On the scrip specific development, Polaris Consulting & Services gained on the BSE after US-based global information technology services company Virtusa Corporation decided to purchase 53% stake in Polaris for nearly Rs 1,173 crore.

On the global front, the US markets ended lower on Thursday as energy shares were weighed down by falling crude prices. Asian markets were trading mixed as investors treaded cautiously ahead of the release of the closely-watched U.S. monthly jobs data later in the day.

Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,950 and 26,300 levels respectively. The market breadth on BSE was positive in the ratio of 797: 719 while 76 scrips remained unchanged

The BSE Sensex is currently trading at 26335.12, up by 30.92 points or 0.12% after trading in a range of 26276.32 and 26438.86. There were 13 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.06%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were IT up by 0.67%, TECK up by 0.52%, Consumer Durables up by 0.40%, Realty up by 0.32% and FMCG up by 0.22%, while Metal down by 1.21%, Power down by 0.59%, PSU down by 0.47%, Auto down by 0.30% and Oil & Gas down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.16%, Infosys up by 1.10%, HDFC up by 1.09%, SBI up by 0.92% and TCS up by 0.85%. On the flip side, Tata Steel down by 3.97%, Vedanta down by 2.18%, Tata Motors down by 1.87%, BHEL down by 1.36% and GAIL India down by 1.22% were the top losers.

Meanwhile, in a major policy reform, the Union Cabinet chaired by Prime Minister Narendra Modi has approved a major power reform programme, Ujwal Discom Assurance Yojna, or Uday, to provide financial turnaround and revival of power distribution companies, helping them reduce their interest burden and allowing them to buy power to ensure uninterrupted supply.

As per the programme, the Centre would ease rules to allow the states participating in the scheme to borrow more and help with the additional burden. The scheme provides that the debt taken over by the states would not be added to their fiscal deficit numbers during the current and the next financial year, which many viewed as 'below the line accounting', as the true debt position of the states would not be reflected. States can take over 75% of the discom debt as of September 30 and pay back lenders by selling bonds. For the remaining 25%, discoms would issue bonds. But unlike the debt recast plan of 2012, UDAY comes with strict budgetary constraints, provisions for monthly on-the-spot monitoring by Central teams and binding operational milestones for the state government and discom. It also provides incentives for performing states and budgetary blackouts for laggards.

The new scheme, approved by the Cabinet envisages a turnaround in next 2-3 years through four initiatives - improving operational efficiencies of discoms; reduction of cost of power; reduction in interest cost of discoms and enforcing financial discipline on discoms through alignment with state finances. The turnaround involves operational efficiency of distribution such as compulsory smart metering, upgradation of transformers, meters etc, energy efficiency measures like efficient LED bulbs, reduction of the average AT&C loss from around 22% to 15% in case of agricultural pumps, fans and air-conditioners.

Further, reduction in cost of power would be achieved through measures such as increased supply of cheaper domestic coal, coal linkage rationalisation, liberal coal swaps from inefficient to efficient plants, coal price rationalisation based on GCV (gross calorific value), supply of washed and crushed coal, and faster completion of transmission lines. NTPC alone is expected to save Rs 0.35/unit through higher supply of domestic coal and rationalization / swapping of coal which will be passed on to discoms/consumers.

The CNX Nifty is currently trading at 7959.70, up by 4.25 points or 0.05% after trading in a range of 7950.50 and 8002.65. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were HDFC up by 1.09%, TCS up by 1.06%, Kotak Mahindra Bank up by 0.84%,  Infosys up by 0.81% and SBI up by 0.75%. On the flip side, Bank of Baroda down by 4.27%, Tata Steel down by 4.21%, Vedanta down by 2.66%, Tata Motors down by 2.08% and Tata Power down by 1.61% were the top losers.

Asian markets were trading mixed, Hang Seng decreased 195.98 points or 0.85% to 22,855.06, Taiwan Weighted decreased 140.35 points or 1.59% to 8,709.83, KOSPI Index decreased 5.64 points or 0.28% to 2,043.77 and Jakarta Composite decreased 0.5 points or 0.01% to 4,576.73.

On the flip side, FTSE Bursa Malaysia KLCI increased 3.2 points or 0.19% to 1,691.74, Shanghai Composite increased 18.2 points or 0.52% to 3,541.02 and Nikkei 225 increased 67.58 points or 0.35% to 19,183.99.