Benchmarks trade slightly in red in noon deals; Nifty reclaims 7,550 mark

Indian equity benchmarks continued to witness recovery with frontline gauges recapturing their crucial 7,550 (Nifty) and 24,800 (Sensex) levels, as investors opted to buy beaten down but fundamental strong stocks. Some support also came in with Infosys reporting better-than-expected earnings and also raised its revenue guidance in constant currency terms. The company has reported 6.62% rise in its consolidated net profit at Rs 3465 crore for the quarter as compared to Rs 3250 crore for the same quarter in the previous year. Some support also came with the Wholesale Price Index (WPI)-based inflation for December 2015 coming in at (-) 0.73 per cent. This is a contraction for the 14th straight month.

However, traders remained cautious with global ratings agency Moody's statement that lower rate of inflation and a sharp decline in prices of commodities like crude oil and steel would lead to accelerated growth only if corporate and bank balance sheets are repaired and the private sector remains internationally competitive. Global cues too remained sluggish with most of the Asian markets trading in red at this point of time amid a rout in oil and commodities prices, with crude plumbing to 12-year lows.

Back home, foreign funds were net sellers in equities worth Rs 76 crore on Wednesday, as per provisional stock exchange data. Financial shares continued to remain weak after rising consumer price inflation in December dashed hopes of a rate cut by the central bank at its next policy meet in early February. The broader indices were reeling under pressure, while the market breadth on the BSE was negative; there were 754 shares on the gaining side against 1,668 shares on the losing side while 157 shares remain unchanged.

The BSE Sensex is currently trading at 24838.01, down by 16.10 points or 0.06% after trading in a range of 24473.22 and 24844.91. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.66%, while Small cap index down by 0.72%.

The only gaining sectoral indices on the BSE were IT up by 2.47% and TECK up by 1.97%, while Auto down by 1.62%, Bankex down by 1.16%, Realty down by 1.02%, Capital Goods down by 0.99%, Finance down by 0.98% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 5.25%, Lupin up by 1.46%, Asian Paints up by 0.87%, Dr. Reddys Lab up by 0.76% and Adani Ports &Special up by 0.28%. On the flip side, Tata Motors down by 3.00%, Tata Steel down by 2.81%, Axis Bank down by 2.41%, Mahindra & Mahindra down by 1.86% and Hero MotoCorp down by 1.65% 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 7551.40, down by 11.00 points or 0.15% after trading in a range of 7443.80 and 7553.00. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Infosys up by 5.10%, Tech Mahindra up by 1.59%, Lupin up by 1.50%, HCL Tech up by 1.20% and Dr. Reddys Lab up by 0.72%. On the flip side, Tata Motors down by 3.17%, Tata Steel down by 2.64%, Axis Bank down by 2.64%, Cairn India down by 2.43% and Ultratech Cement down by 2.25% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 tumbled 474.68 points or 2.68% to 17,240.95, Taiwan Weighted declined 81.73 points or 1.04% to 7,742.88, Hang Seng slipped 79.31 points or 0.4% to 19,855.57, Jakarta Composite decreased 43.49 points or 0.96% to 4,493.68, KOSPI Index shed 16.27 points or 0.85% to 1,900.01 and FTSE Bursa Malaysia KLCI was down by 8.22 points or 0.5% to 1,634.32. On the flip side, Shanghai Composite was down by 52.61 points or 1.78% to 3,002.20.