Post Session: Quick Review

It turned out to be a rollercoaster ride for the frontline indices which, after flip flopping during the session, managed to eke out slender gains. The session was characterized by high amount of volatility with key gauges struggling to keep their head above water. The markets made a positive opening, as investors got some encouragement with the Finance Minister Arun Jaitley’s statement that the rolling out the ambitious Goods and Services Tax (GST) regime is ‘certainly’ doable in 2016 and he is in ‘continuous touch’ with the Congress party in a bid to persuade them to cooperate. He hope that in the next session (of Parliament), the GST will make headway.

However, markets entered into negative terrain in noon deals, as investors turned cautious ahead of F&O expiry for the month of December. Depreciation in Indian rupee too dampened sentiments. The rupee was trading lower by 19 paise at 66.38 against the dollar at the time of equity markets closing at the Interbank Foreign Exchange on month-end demand for the US currency from importers amid capital outflows.

Sentiments once again turned up-beat and markets got momentum in last leg of trade albeit logged marginal gains on government’s expectation that FDI inflows will rise by 40-45 percent in the New Year while further steps could be on anvil to attract foreign capital. As per the latest available figure for 2015, FDI inflows during January-September period has increased by 18 percent to $26.51 billion.

Global cues too remained supportive with European counters making a firm start as oil prices stabilised above 11-year lows on the back of prospects for lower temperatures on both sides of the Atlantic. Asian markets ended mostly in green, shrugging off early losses, as Chinese shares rose a day after marking their biggest loss in a month and crude prices took back some lost ground.

Bach home, liquor stocks like United Breweries, United Spirits, Tilaknagar Industries came under pressure after the Supreme Court of India upheld the Kerala liquor ban policy. However, buying was witnessed in oil and gas space on reports that they might jointly set up a mega refinery at Ratnagiri in coastal Maharashtra. Select stocks from infra pack too edged higher, with the eight-member Vijay Kelkar Committee coming up with host of recommendations, including a review of the model concession agreements, allowing fund raising through zero coupon bonds and setting up of independent sectoral regulators.

The NSE’s 50-share broadly followed index Nifty rose marginally to hold its psychological 7,900 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over forty points to finish near the psychological 26,100 mark. Broader markets too struggled to get some traction and exhibited mixed trend.

The market breadth remained in favor of advances, as there were 1,195 shares on the gaining side against 1,466 shares on the losing side while 250 shares remain unchanged. (Provisional)

The BSE Sensex ended at 26079.48, up by 45.35 points or 0.17% after trading in a range of 25994.45 and 26133.78. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.42%, while Small cap index down by 0.13%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 0.72%, Auto up by 0.56%, Consumer Discretionary Goods & Services up by 0.53%, Finance up by 0.41% and Oil & Gas up by 0.01%, while Realty down by 0.92%, Capital Goods down by 0.46%, FMCG down by 0.42%, Metal down by 0.42% and PSU down by 0.19% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Auto up by 2.02%, Mahindra & Mahindra up by 1.70%, Hero MotoCorp up by 1.38%, GAIL India up by 1.27% and HDFC up by 0.91%. On the flip side, BHEL down by 1.54%, Coal India down by 1.18%, Hindustan Unilever down by 1.02%, Dr. Reddys Lab down by 0.68% and Tata Motors down by 0.48% were the top losers. (Provisional)

Meanwhile, the eight member committee headed by former finance secretary Vijay Kelkar that reviewed the public-private partnership (PPP) model for infrastructure projects has recommended for easy financing of these, including issuance of zero coupon bonds by banks to developers, equity divestment by the government from completed projects, review of the model concession agreement, setting up of independent sectoral regulators and removing bars on monetisation of viable projects after the engineering, procurement and construction (EPC) work is finished.

The committee in its report titled “Report of the Committee on Revisiting and Revitalising the PPP Model of Infrastructure” has suggested that the government should encourage development of infrastructure sectors, including airports, ports and railways under the PPP mode by ensuring easier funding for projects with long development period. The report said that PPPs are an important policy instrument that will enable India to compress time in this journey towards economic growth and development. A successful and growing stream of PPPs in infrastructure will go a long way in accelerating the country's development process.

The panel also stated that finance ministry should allow banks and financial institutions to issue zero coupon bonds, which will also help to achieve soft lending for user charges in infrastructure sector. The report said there should be a better identification and allocations of risks between the stakeholders and the contracts for the PPP projects should focus more on service delivery instead of fiscal benefits. The committee said that there is an urgent need to evolve a suitable mechanism that evaluates and addresses actionable stress. Sector specific institutional frameworks should be developed to address these stalled infrastructure projects.

The Kelkar committee highlighted the need to resolve the legacy issues in various sectors and recommended independent regulators in sectors that are going in for PPPs. Further, it has suggested a review committee (IPRC) for such projects to evaluate and send recommendations in a time-bound manner upon a reference being made of actionable stress for a project beyond a notified threshold value. The report also recommended amendment in the Prevention of Corruption Act, 1988 while explaining the need for change in attitude and in the mind-set of all authorities dealing with PPP.

The other suggestion in the report includes restrictions on number of banks in a consortium, building up of risk assessment and appraisal capabilities by banks and specific RBI guidelines to lenders for encashment of bank guarantees. The report also underlined the need for review the Model Concession Agreement (MCA) and ensures speedier resolution of disputes. It suggested an independent tariff regulatory authority for railways to help it tap PPP opportunities.

The CNX Nifty ended at 7928.95, up by 3.80 points or 0.05% after trading in a range of 7902.75 and 7942.15. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bajaj Auto up by 1.52%, ACC up by 1.47%, Ambuja Cement up by 1.41%, Grasim Industries up by 1.28% and Mahindra & Mahindra up by 1.22%. On the flip side, BHEL down by 1.69%, HCL Tech down by 1.52%, Coal India down by 1.15%, Hindustan Unilever down by 0.92% and Power Grid down by 0.84% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 32.6 points or 0.52% to 6,287.24, France’s CAC surged 68.79 points or 1.49% to 4,686.74 and Germany’s DAX was up by 172.3 points or 1.62% to 10,826.21.

Asian equity markets ended mostly higher on Tuesday as gains in health-care shares overshadowed losses in raw-material producers. China stocks closed higher after lawmakers approved a proposal to reform stock listings and the People's Bank of China said it would ‘flexibly’ use various policy tools to maintain appropriate liquidity and keep the Yuan stable. Japanese shares ended a choppy session higher as investors bought domestically-focused stocks and avoided taking large positions as the year draws to a close. Hong Kong stocks ended modestly higher, helped by calmer trading in mainland China after a sharp fall in the previous session.