Selling pressure drifts benchmark towards day's low

Indian equities continued its weak trade hovering near the lowest point of the day in the late afternoon session on account of selling in the frontline blue chip counters. Traders were seen piling up position in PSU sector while selling was witnessed in Realty, Capital Goods and Oil & Gas sector. The trade continued on weak note after the newly re-instated Railway minister Mukul Roy rolled back most fare hikes proposed by the earlier minister. However, the markets have not shown any knee-jerk reaction to the development as it was largely on the expected lines after the sacking of former rail minister Dinesh Trivedi. But the move has reignited worries amongst the market participants over the decision making power of the ruling Congress as they fear any decision by the government relating to hike in prices of petroleum products is likely to meet with similar fortune. In the scrip specific development, 3i Infotech was trading firm in green on reports that, CDR empowered group has approved CDR proposal. The lender will convert 20% of unsecured debt into shares. It has also got RBI's nod to replace existing FCCBs with fresh FCCBs. Indoco Remedies  was in green on news that the board will meet on March 29, 2012 to consider a proposal for bonus shares and sub-division of shares. Muthoot Finance and Manappuram Finance were trading weak in red as RBI has issued circular restricting loans by gold finance firms to 60% of the value of gold jewellery pledged as collateral. Currently gold loan companies are lending as much as 75% of the gold value. Higher the loan as a ratio of the gold pledged more the interest rate.

On the global front, Asian markets were trading on a mix note while the European markets were trading in red on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,350 and 17,500 levels respectively. The market breadth on BSE was in favor of declines in the ratio of 1045:1679 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 17,439.57 down by 162.14 points or 0.92% after trading as high as 17,687.01 and as low as 17,433.52. There were 7 stocks advancing against 23 declines on the index. The broader indices were trading on a negative note; the BSE Mid cap index slipped 0.87% while Small cap shed 0.48%.

On the BSE sectoral space, PSU up by 0.23% was the sole gainer, while Realty down 2.06%, Capital Goods down 1.63%, Oil & Gas down 1.60%, Bankex down 1.42% and Metal down 1.26% were the major losers in the space.

Coal India up 3.34%, Hero MotoCorp up 0.82%, TCS up 0.74%, ONGC up 0.65% and Sterlite Industries up 0.39%, were the major gainers on the Sensex, while Jindal Steel down 6.51%, RIL down 2.81%, DLF down 2.29%, L&T down 1.97% and ICICI Bank down 1.90% were the major losers in the index.

Meanwhile, the Government of India, Asian Development Bank (ADB) and the India Infrastructure Finance Company (IIFCL) have signed a $240 million loan agreement to stimulate infrastructure development through Public-Private Partnership (PPP) investments. The loan has a 25-year term with a grace period of 5 years and interest would be determined in accordance with ADB’s LIBOR-based lending facility.

The fund will be used to expand road networks in Andhra Pradesh, Bihar, Gujarat, Maharashtra, and Jammu & Kashmir. It will also help connect far flung communities to markets. A power project in Gujarat will also receive funding. The loan is the third and final tranche of the second India Infrastructure Project Financing Facility (IIPFF II) to stimulate infrastructure development through PPP investments. In 2009, ADB had agreed to provide a $700 million multi-tranche financing facility to help IIFCL provide long-term funding for infrastructure development.

The first and the second tranche of $460 million were allocated to finance subprojects for improving roads and highways in Madhya Pradesh, Punjab, Haryana, Himachal Pradesh, National Capital Region of Delhi, Uttar Pradesh, Maharashtra, Rajasthan, and to partially fund a power project in Kutch district in Gujarat.

As per government officials, long term funds for infrastructure financing will improve financial viability and sustainability of the project companies and generate employment directly. The absence or inadequacy of infrastructure is most critically felt by the vulnerable section of population. This loan is expected to benefit economically disadvantaged people directly through improved access to various infrastructure services, lowering of input costs, opening of opportunities for entrepreneurs and increase in employment opportunities.

The S&P CNX Nifty is currently trading at 5,301.65, lower by 63.30 points or 1.18% after trading as high as 5,385.95 and as low as 5,298.60. There were 7 stocks advancing against 43 declines on the index.

The top gainers on the Nifty were Coal India up 3.29%, Hero MotoCorp up 1.07%, ONGC up 0.48%, Siemens up 0.39%, Sterlite Industries up 0.35%.

Jindal Steel down 6.90%, IDFC down 5.13%, JP Associates down 4.08%, RIL down 3.25% and Reliance Power down 3.03% were the major losers on the index.

In the Asian space, Hang Seng gained 0.22%, KLSE Composite added 0.18%, Nikkei 225 advanced 0.40% and Taiwan Weighted surged 0.98%. On the other hand, Jakarta Composite lost 0.02%, Shanghai Composite eased 0.10%, Straits Times dropped 0.35% and Seoul Composite shed 0.05%.

The European markets were trading in red with, France’s CAC 40 dropped 1.17%, Germany’s DAX descended 0.67% while Britain’s FTSE 100 lost 0.54%.