Benchmarks continue firm trade in late morning session

After making a positive opening, Indian equity markets continue to trade in green in late morning session,on the back of value-buying in select blue-chip stocks, on the second day of 2015's final week. Meanwhile, the broader markets were outperforming the benchmark indices. The BSE mid-cap index rose 0.56% and the small-cap index added 0.31%. Positive trade in the other Asian peers too supported the sentiments.  State-owned oil marketing companies namely Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) were trading higher on the BSE on reports that they might jointly set up a mega refinery at Ratnagiri in coastal Maharashtra. Besides, auto shares also firmed up ahead of their December 2015 sales numbers to be announced later this week, M&M, Bajaj Auto, Hero MotoCorp and Maruti Suzuki were trading in green. However, upside remained capped on report that Foreign Institutional Investors (FIIs) were net sellers to the tune of Rs 302.62 crore on Monday as per provisional stock exchange data. On the sectoral front, most of the sectoral indices on BSE were trading in green, with prominent gainers being the stocks from Auto, Realty, Metal, Oil & Gas and Power counters. On the flip side, stocks from Consumer Durables and FMCG counters were the only losers of the session.

On the global front, Asian markets were trading mostly in green after the Japanese and South Korean markets erased morning losses.

Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,900 and 26,050 levels respectively. The market breadth on BSE was positive in the ratio of 1269: 908, while 198 scrips remained unchanged.

The BSE Sensex is currently trading at 26090.18, up by 56.05 points or 0.22% after trading in a range of 26065.08 and 26133.78. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.56%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Auto up by 0.50%, Realty up by 0.44%, Metal up by 0.42%, Oil & Gas up by 0.41% and Power up by 0.41%, while Consumer Durables down by 0.68% and FMCG down by 0.30% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.57%, GAIL India up by 1.51%, Bajaj Auto up by 1.31%, Wipro up by 1.21% and Mahindra & Mahindra up by 1.06%. On the flip side, Hindustan Unilever down by 0.85%, ONGC down by 0.69%, ICICI Bank down by 0.53%, ITC down by 0.51% and BHEL down by 0.20% were the top losers.

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 is currently trading at 7933.75, up by 8.60 points or 0.11% after trading in a range of 7923.90 and 7942.15. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 1.53%, NTPC up by 1.39%, Vedanta up by 1.36%, Bajaj Auto up by 1.19% and Wipro up by 1.10%. On the flip side, Hindustan Unilever down by 0.90%, ONGC down by 0.77%, HCL Tech. down by 0.76%, Cairn India down by 0.68% and ITC down by 0.48% were the top losers.

Asian markets were trading mostly in green, KOSPI Index increased 0.41 points or 0.02% to 1,964.47, Shanghai Composite increased 6.09 points or 0.17% to 3,539.87, Jakarta Composite increased 7.25 points or 0.16% to 4,564.61, FTSE Bursa Malaysia KLCI increased 7.35 points or 0.44% to 1,678.08, Hang Seng increased 69.59 points or 0.32% to 21,989.21, Nikkei 225 increased 114.19 points or 0.61% to 18,987.54

On the flip side, Taiwan Weighted decreased 64.16 points or 0.77% to 8,294.33.