Markets trade flat with positive bias in low-volume session

Indian equity benchmarks alternating between positive and negative territory, were now trading flat with bit of positive bias on increased buying by funds and retail investors. Broader markets continue to outperform the benchmark indices- BSE Midcap and Smallcap indices were up 0.57%-0.43%. Sentiments remained upbeat with report that foreign direct investment into India has grown by 35 per cent in the last 17 months even as across the world it has fallen by 16 per cent. FDI has come mainly into manufacturing, consumer goods, logistics and food processing sectors. However, investors remained cautious with the ICRA’s report that indicates the recovery in Indian economic activity remains tentative and narrowly focused in sectors such as roads, railways, power transmission and passenger vehicles. The report on the Indian economy says the consumption boost from the Seventh Pay Commission award is unlikely to lead to an immediate investment in capacity expansion, as utilization is still low at 71.5% in first quarter of current fiscal though up marginally from 70.2% in the corresponding quarter last fiscal. Meanwhile, volumes remained thin for yet another session as most of foreign institutional investors are away in a year-end holiday season and other participants were not interested in widening their bets in a big way ahead of Dec F&O expiry tomorrow.

On the global front, Asian shares unwound early gains on Wednesday, as investors turned cautious following renewed selling in recently battered crude oil futures. Oil prices had been volatile during the holiday-shortened final week of 2015 but remained near multi-year lows in the face of indications a global crude supply glut will continue into next year. Back on street, stocks from Oil & Gas, Realty and Power counters were supporting the markets’ uptrend, while those from Consumer Durables, Auto and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Petron Engineering Construction have surged after the company has won a construction order from JSW Cement. Furthermore, SKS Microfinance gained after the company completed the third securitization transaction for a pool value of Rs 372.47 crore during FY16.

The market breadth on BSE was positive, out of 2340 stocks traded, 1382 stocks advanced, while 772 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26091.22, up by 11.74 points or 0.05% after trading in a range of 26064.72 and 26130.20. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index up by 0.43%.

The top gaining sectoral indices on the BSE were Metal up by 0.73%, Power up by 0.69%, Capital Goods up by 0.60%, TECK up by 0.36% and Realty up by 0.28%, while Oil & Gas down by 0.21%, Bankex down by 0.05% and FMCG down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.94%, Dr. Reddys Lab up by 1.09%, BHEL up by 1.07%, HDFC up by 0.83% and NTPC up by 0.76%. On the flip side, ICICI Bank down by 0.87%, Reliance Industries down by 0.65%, Bajaj Auto down by 0.36%, Hero MotoCorp down by 0.34% and Asian Paints down by 0.26% were the top losers.

Meanwhile, in order to make Infrastructure a key growth driver of the Indian economy, the government has set up  and is ready to launch the National Infrastructure Investment Fund (NIIF), with an initial corpus of at least Rs 40,000 crore along with two large overseas funds which are expected to sign commitments of at least $1billion each next month. Economic affairs secretary Shaktikanta Das said that the fund will invest in greenfield, brownfield as well as stalled projects.

Das said that while the government will invest Rs 20,000 crore in NIIF from the Budget, another Rs 20,000 crore is expected to come from private investors.  Several sovereign funds and pension funds from Russia, Singapore, the UK and the UAE are willing to participate in the fund and cooperate with it at various levels. Russian Direct Investment Fund and Rusnano have held talks with government. The proposed fund is expected to play a key role in boosting investments in the infrastructure as private companies, which are saddled with debt and are not in a position to drive growth in the core sectors. Besides, the funds is expected to ease pressure on banks, which are facing severe stress from bad loans

The government is banking on the fund to kick-start the infrastructure sector and help script a strong economic recovery. The NIIF, announced in the budget, is set to be registered with Sebi and the final clearances are expected soon. In July, the Cabinet had approved creation of NIIF, a sort of sovereign fund, for development of infrastructure projects, including the stalled ones.

The government is looking for a CEO at a market-linked salary. The finance ministry had in October constituted a search-cum-selection committee under the chairmanship of economic affairs secretary Shaktikanta Das for selecting a CEO for the Investment Management Company, which operates under NIIF. India Infrastructure Finance Company (IIFCL) has been appointed as investment advisor to NIIF and IDBI Capital Market Services as advisor to NIIF Trustee, initially for six months and one year respectively. The Investment Management Company would be responsible for taking investment decision on behalf of NIIF. The government’s share in the corpus shall not exceed 49 per cent.

The CNX Nifty is currently trading at 7933.80, up by 4.85 points or 0.06% after trading in a range of 7924.35 and 7944.75. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 1.88%, Zee Entertainment up by 1.84%, Tata Power up by 1.19%, Tech Mahindra up by 1.17% and BHEL up by 1.16%. On the flip side, Reliance Industries down by 0.77%, ICICI Bank down by 0.70%, BPCL down by 0.61%, Sun Pharma down by 0.45% and Bajaj Auto down by 0.37% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 0.46%, Taiwan Weighted d down by 0.26%, KOSPI Index down by 0.27% and Shanghai Composite was down by 0.07%. On the flip side, Jakarta Composite was up by 0.49%, FTSE Bursa Malaysia KLCI up by 0.84% and Nikkei 225 up by 0.47%.