Benchmarks pare some early losses; still continue to trade in red

Recovering from day’s low, benchmark equity indices gained momentum however were still trading below the neutral line in red on account of selling in front line blue chip counters. Sustained selling by funds amid weak trend on Asian counterparts following overnight sell-off in US markets on renewed jitters about the world’s top economy and broader concerns about global growth triggered selling on the domestic bourses. Sentiments remained down-beat with Paul Donovan, global economist, UBS Investment Bank stating that India's economic growth may come under pressure in the near term, as agricultural output is expected to remain low due to the impact of El Nino. Besides, depreciation in Indian rupee, which again breached the crucial 67-mark by falling 21 paise to trade at one-month low of 67.06 against the dollar, too weighed on sentiments. However, losses remained capped with the Finance Minister Arun Jaitley's statement that the economy is moving in the right direction and the pace of growth will gather momentum in the coming quarters on the back of on-going structural reforms.

On the global front, Asian stocks were trading lower tracking a sell-off in US stocks after weakening crude oil prices raised global growth concerns.  Stocks in Japan were the most hit with the Nikkei heading towards a 1-year low with exporters' stocks leading the decline. Furthermore, China's market is marching towards bear territory and all efforts of its government to stem the fall and restore investor confidence have gone to the winds. Back home, stocks from IT and Teck counters were supporting the markets’ uptrend, while those from Capital Goods, Metal and Auto counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Infosys surged after the company reported a better-than-expected 1.98% quarter on quarter (q-o-q) growth in consolidated net profit at Rs 3,465 crore for the third quarter ended December 31, 2015. On the other hand, shares of Tata Steel have dipped after the company said the rating agency Standard & Poor's downgraded the long-term corporate credit rating by a notch to 'BB-' from 'BB', citing weak financial performance and high debt leverage.

The market breadth on BSE was positive, out of 2327 stocks traded, 406 stocks advanced, while 1815 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24673.90, down by 180.21 points or 0.73% after trading in a range of 24473.22 and 24690.22. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.30%, while Small cap index down by 1.49%.

The only gaining sectoral indices on the BSE were IT up by 1.92% and TECK up by 1.28%, while Capital Goods down by 2.24%, Metal down by 2.00%, Auto down by 1.94%, Realty down by 1.93% and Bankex down by 1.68% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 4.59%, Asian Paints up by 0.47% and Lupin up by 0.28%. On the flip side, Tata Steel down by 4.45%, Tata Motors down by 3.59%, Axis Bank down by 3.04%, Larsen & Toubro down by 2.58% and BHEL down by 2.40% were the top losers.

Meanwhile, with a view to fund its highway expansion plan in the financial year 2016-17 beginning April 1, Road transport and highways ministry has sought Rs 80,000 crore from the finance ministry, the amount is almost double of what the ministry had received in the budget for 2015-16. The ministry is planning to use the funds in the government’s most ambitious Bharat Mala project. The ministry is also looking to raise funds through tax-free bonds and Road, transport and highways minister Nitin Gadkari is expected to meet finance minister Arun Jaitley by the end of this week to put forward his proposal.

Additionally, Gadkari in next year will be setting up an aggressive target of awarding around 15,000 km of roads, of which 30 per cent will be done through private participation and the rest through the engineering, procurement and construction (EPC) model. Besides, the ministry has also proposed to construct 15 expressways, out of which eight have already been approved by the Cabinet. These expressway projects would be taken on the newly-conceived hybrid annuity model.

Bharat Mala project envisages construction of 25,000 km of roads along India's borders, coastal areas, ports, religious and tourist places as well as over 100 district headquarters. The ministry aims to complete the project by 2022. The ministry, which has proposed Bharat Mala as an umbrella scheme, estimates an investment of Rs 80,000 crore on the 7,000 km stretch of border and coastal roads, Rs 85,000 crore on religious and tourists places connectivity, and Rs 30,000 crore on Setubharatam, which includes construction of 1,500 bridges and over-bridges.  Road construction has been among the top priorities of the Narendra Modi-led government and in the 2015-16 Budget it allocated Rs 42,000 crore for road and highway construction.

The CNX Nifty is currently trading at 7499.45, down by 62.95 points or 0.83% after trading in a range of 7443.80 and 7507.65. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Infosys up by 4.50%, HCL Tech up by 1.24%, Tech Mahindra up by 0.85%, Power Grid up by 0.45% and Asian Paints up by 0.43%. On the flip side, Tata Steel down by 4.30%, Tata Motors down by 3.88%, Hindalco down by 3.26%, Axis Bank down by 3.06% and BHEL down by 2.70% were the top losers.

Asian markets were trading in red; Nikkei 225 was down by 4.13%, Hang Seng down by 1.62%, Taiwan Weighted down by 1.61%, Shanghai Composite down by 0.94%, KOSPI Index down by 1.35%, Jakarta Composite down by 1.72% and FTSE Bursa Malaysia KLCI down by 0.46%.