Benchmarks recover from day's low; bounce back into positive territory

Bouncing back from day's low, benchmark equity indices were trading in green with slender gains of around one tenth of a percent, which kept both Sensex and Nifty above crucial 24,600 and 7,500 levels respectively. Sentiments got a boost with Finance Minister Arun Jaitley’s statement that India continues to be one of the fastest growing economies in the world, but there is still potential to grow at a much faster pace. Finance Minister has further said that the Centre and states need to work together to put the country on a high growth path even as states pitched for higher allocation to meet additional outgo towards pay revision of their employees. Some support also came with IMF chief Christine Lagarde stating that she hoped Indian Government would be able to implement a series of 'critically important' economic reforms including GST for unleashing the country's growth potential. With Chinese market remaining close, one can hope no trigger for fall emanates from there for few days. Key results will continue to swing individual stocks. Investor remained cautious with the report India’s economic recovery is losing some steam and there is a likelihood of slowdown in the growth momentum. Meanwhile, all eyes remained on GDP Data slated to be announced later in the day and general expectations are that India will remain one of the fastest growing economies in the world, with GDP annual growth at 7.3 per cent in the quarter through December.

On the global front, US markets declined broadly Friday, led by a rout in technology shares, capping a week that reflected investors' caution amid a murky picture of the US economy. Employment in the US rose by less than expected in the month of January, according to a report released by the Labour Department on Friday, non-farm payroll employment climbed by 151,000 jobs in January compared to estimates for an increase of about 188,000 jobs.  Meanwhile in Asia, Singapore, Hong Kong and mainland China benchmark indices are shut on account of Lunar New Year holiday. Japan’s Nikkei was trading higher, despite the concerns about weak earnings and after the US jobs report failed to give clues on the Federal Reserve's monetary policy outlook.

Back home, stocks from Realty, PSU and Capital Goods counters were supporting the markets’ uptrend, while those from IT and TECK counters were adding to the underlying cautious undertone. Shares of metal companies have gained after the report that the government has decided to impose a minimum import price (MIP) on steel products to protect primary producers in the domestic steel industry. In scrip specific development, shares of Procter & Gamble Hygiene and Health Care (P&G) have surged after the company posted a strong 62% year on year (YoY) jump in the net profit to Rs 148 crore for the second quarter ended December 31, 2015. Furthermore, 3M India has rallied after the company reported more than three-fold jump in net profit at Rs 56.61 crore for the quarter ended December 31, 2015 (Q3FY16) on back of strong operational income.

The market breadth on BSE was positive, out of 2127 stocks traded, 1321 stocks advanced, while 714 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24636.47, up by 19.50 points or 0.08% after trading in a range of 24530.43 and 24663.08. 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 0.85%, while Small cap index up by 0.85%.

The top gaining sectoral indices on the BSE were Realty up by 1.74%, PSU up by 1.12%, Capital Goods up by 0.91%, Bankex up by 0.87% and Power up by 0.86%, while IT down by 0.78% and TECK down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 3.41%, SBI up by 3.18%, Axis Bank up by 3.03%, Tata Steel up by 1.50% and BHEL up by 1.36%. On the flip side, Tata Motors down by 2.03%, TCS down by 1.40%, Infosys down by 1.12%, Cipla down by 1.04% and ONGC down by 0.59% were the top losers.

Meanwhile, in order to speed highways building, the government has given its approval for 18 highway development projects worth Rs 17,000 crore investments totaling about 1,000 km of highways. These projects will be awarded by March-end. The approved projects can be rolled out soon since adequate land is available for these works and there are hardly any cases where environment and forest clearances are required.The panel with representatives from departments such as finance, expenditure and Niti Aayog is headed by road transport secretary Sanjay Mitra.

Out of the 18 approved projects, 11 will be awarded through Hybrid Annuity mode, which was recently approved by the Cabinet. In this case, the government will pay back the entire investment in a staggered manner and the companies will get 40% of the project cost up front during construction. Further, six of the approved projects will be undertaken through public funding mode known as EPC (engineering, procurement and construction) and the rest one will be on build operate and transfer (BOT-Toll) mode.

The projects under EPC mode include Rs 1,249 crore Bar-Bilara-Jodhpur stretches on NH 112 in Rajasthan, Rs 1,453 crore Mukkola Junction-Kerala stretch in Kerala, Rs 426 crore Kamrej-Chaltan stretch on NH 8 in Gujarat and Rs 813 crore Aligarh-Muradabad stretch in Uttar Pradesh. The other projects on EPC mode are Rs 1,070 crore end of Jalandhar bypass-Hoshiarpur-Punjab/Himachal Pradesh border in Punjab and Rs 995 crore Karnataka/AP border to Gooty section on NH 67 in Andhra Pradesh besides Rs 1,102 and Rs 491 crore projects in Maharashtra and Chhattisgarh, respectively. The only BOT project pertains to Rs 1,280 crore Dhule to Aurangabad section of NH 211 in Maharashtra.

In a bid to revive public-private-partnership (PPP) mode and attract more investments in roads projects, last month the government has approved hybrid annuity model for building roads. The hybrid annuity model is a mix of EPC and build-operate-transfer formats, with the government and the private companies sharing the total project cost in the ratio of 40:60 respectively. Under this model, the government will provide 40 per cent of the project cost to the developer to start work, while the remaining investment has to be made by the developer. The government has set a target of awarding 10,000 km during the ongoing fiscal year.

 The CNX Nifty is currently trading at 7502.80, up by 13.70 points or 0.18% after trading in a range of 7463.95 and 7504.70. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 3.43%, SBI up by 3.36%, GAIL India up by 3.07%, Axis Bank up by 2.98% and PNB up by 2.90%. On the flip side, Tata Motors down by 1.96%, TCS down by 1.36%, HCL Tech. down by 1.13%, Cipla down by 1.12% and Infosys down by 1.06% were the top losers.

Japanese market, the only major Asian market trading today, was up by 213.69 points or 1.27% to 17,033.28