Benchmarks slip into negative territory

Indian equity benchmarks after making a cautious start slipped into red in the late morning session on account of selling in frontline blue chip counters ahead of a widely anticipated speech by the Fed chief at the central bank’s annual meeting in Jackson Hole scheduled on Friday. The sentiments remain under pressure after experts pointed out that it would be preferred if the new Goods and Service Tax (GST) regime is rolled out after adequate preparation, even if it is in the middle of the year. The government could be looking at rolling out the country’s biggest indirect tax reform from mid-2017, realizing that it may be an uphill task to have all the pieces for GST rollout in place by April 1, the start of the fiscal. The central GST and integrated GST laws may make it through Parliament only in the budget session, not leaving much time for preparation for the industry. Minor selling crept in on report that pledging of shares by promoters in companies listed on the National Stock Exchange hit a seven year high at the end of June. The downside was however arrested after economic think-tank NCAER’s business confidence index (BCI) registered a sequential increase of 2.2% in June quarter of 2016-17, mainly driven by improvement in perception about economic conditions and financial position of firms in the next six months. Traders were seen piling position in IT, TECK and Consumer Durables stocks, while selling was witnessed in Capital Goods, Oil & Gas and PSU sector stocks. In scrip specific development, Welspun group stocks Welspun India, Welspun Corp and Welspun Enterprises were trading under pressure for second consecutive sessions on report that Target Corp is ending all business with Welspun India, one of the world’s biggest textile manufacturers, after saying the supplier was sending it phony Egyptian cotton sheets.

On the global front, Asian stocks were mostly down, ahead of a widely anticipated speech by the Fed chief kept on whether the Federal Reserve will raise US interest rates this year. A survey of Japanese manufacturing activity showed signs of steadying in August as output rose for the first time in six months, but had little impact on stocks. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,650 and 28,000 levels respectively. The market breadth on BSE was positive in the ratio of 1108:998, while 122 scrips remained unchanged.

The BSE Sensex is currently trading at 27946.10, down by 39.44 points or 0.14% after trading in a range of 27928.63 and 28028.98. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.46%, while Small cap index was up by 0.01%.

The gaining sectoral indices on the BSE were IT up by 1.59%, TECK up by 1.26%, Consumer Durables up by 0.02% and Metal up by 0.01%, while Capital Goods down by 0.94%, Oil & Gas down by 0.92%, PSU down by 0.85%, FMCG down by 0.68% and Power down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.77%, Infosys up by 1.73%, GAIL India up by 1.58%, Wipro up by 0.57% and Axis Bank up by 0.45%.

On the flip side, Bajaj Auto down by 1.41%, SBI down by 1.31%, ICICI Bank down by 1.13%, ITC down by 1.08% and Larsen & Toubro down by 1.07% were the top losers.

Meanwhile, the government will allow collection of public funded highway projects by leasing out to private players for toll collection, in order to achieve economies of scale, synergy in operations and it is expected to create a framework for attracting long term institutional investment on the strength of future toll receivables. The fund generated from such monetization shall be utilized for development of national highways in the country, which would benefit highway users throughout the country.

The development comes in the wake of the Cabinet earlier this month giving nod to a proposal from the Road Transport and Highways Ministry to monetize public funded national highway projects that could gather funds in the range of Rs 80,000- 1 lakh crore initially. This approval would ensure better operations and maintenance (O&M) of public funded NH stretches resulting in enhanced quality of service for national highway users across the country.

The portfolio of this projects would be prepared on the basis of geographical proximity that would be leased out to institutional investors under toll operate transfer (TOT) model. Around 75 operational NH projects completed under public funding have been preliminarily identified for potential monetization using the TOT Model.

Under the policy, infrastructure developers, private equity firms and institutional investors like pension and wealth funds along with the local operation and management partners can take up completed highway stretches. The government has lined up around 104 highway projects to be leased out. These national highways have been constructed by the National Highways Authority of India (NHAI). Road transport and highways ministry expects a minimum investment of around Rs 75,000 crore in these projects.

The CNX Nifty is currently trading at 8615.85, down by 13.30 points or 0.15% after trading in a range of 8608.00 and 8635.85. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.53%, TCS up by 1.88%, Infosys up by 1.72%, GAIL India up by 1.51% and Tech Mahindra up by 1.06%.

On the flip side, BHEL down by 3.34%, BPCL down by 2.13%, SBI down by 1.30%, ICICI Bank down by 1.15% and ITC down by 1.14% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 108.02 points or 0.65% to 16,490.17, Hang Seng decreased 70.92 points or 0.31% to 22,926.99, Jakarta Composite decreased 53.04 points or 0.98% to 5,374.14 and FTSE Bursa Malaysia KLCI decreased 3.07 points or 0.18% to 1,688.00.

On the other hand, KOSPI Index increased 7.14 points or 0.35% to 2,049.30, Shanghai Composite increased 7.86 points or 0.25% to 3,092.66 and Taiwan Weighted increased 53.32 points or 0.59% to 9,035.13.