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

Recovering from day’s low, benchmark equity indices have gained momentum however were still trading below the neutral line as market participants remained cautious ahead of the US Federal Reserve's direction on key policy rates at a meeting scheduled on August 26, 2016. Anxiety of the investors was also increased by the repot that foreign portfolio investors (FPIs) sold shares worth a net Rs 372.08 crore on August 25, 2016. Also India Meteorological Department (IMD) in its latest monsoon update said that for the country as a whole, cumulative rainfall during this year's monsoon so far (till 24 August 2016) was 2% below the long period average (LPA).  However, losses remained capped with the Reserve Bank of India (RBI) announcing a raft of measures to boost investor participation and market liquidity in both the corporate bond and currency markets.  Meanwhile, some buying observed in selected jewellery stocks after the report that exports of gems and jewellery grew 11.7 per cent to $11.4 billion during the first four months of the current fiscal, driven largely by demand in major markets such as the US. Shares of credit rating agencies like ICRA, CRISIL and Credit Analysis and Research (CARE) rallied on the hopes that rating firms may get more business due to the RBI’s new norms on corporate bond markets.

On the global front, Asian markets were witnessing mixed trend on Friday, with investors preferring to sit on the sidelines ahead of US Federal Reserve Chairwoman Janet Yellen's speech for cues on the timing of the next policy rate hike. Recent strong readings on the U.S. labor market and signs that inflation was finally beginning to pick up, is encouraging some policymakers to believe that rates should be hiked, if not as soon as September's policy meeting then at least before the end of the year. Further, US stocks registered small losses Thursday’s session with healthcare stocks extending previous trading session's decline.

Back home, stocks from Consumer Durables, Auto and Oil & Gas counters were supporting the markets, while those from Capital Goods, Realty and Banking counters were adding to the underlying cautious undertone. In scrip specific development, J Kumar Infraprojects has rallied after the company in joint venture (JV) has bagged an order aggregating worth Rs 5,012 crore.  Moreover, Prakash Constrowell has gained after the company received orders worth Rs 158 crore for construction of dwelling units and allied services at Mumbai.
The market breadth remained pessimistic as there were 1004 shares on the gaining side against 1247 shares on the losing side, while 150 shares remained unchanged.

The BSE Sensex is currently trading at 27823.05, down by 12.86 points or 0.05% after trading in a range of 27793.22 and 27935.88. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.01%, while Small cap index up by 0.04%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.85%, Auto up by 0.74%, Oil & Gas up by 0.70% and FMCG up by 0.07%, while Capital Goods down by 0.74%, Realty down by 0.63%, Bankex down by 0.62%, Metal down by 0.23% and Power down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.28%, Tata Motors up by 2.01%, Cipla up by 1.09%, Reliance Industries up by 0.70% and Mahindra & Mahindra up by 0.69%. On the flip side, Adani Ports &Special down by 1.66%, Asian Paints down by 1.20%, Larsen & Toubro down by 1.19%, Wipro down by 0.88% and SBI down by 0.86% were the top losers.

Meanwhile, in a big boost to infrastructure companies, the government think-tank NITI Aayog has prepared a Cabinet note on how to unlock stalled infra projects and speed up payment to the industry. There are reports of over Rs 1.5 lakh crore locked in stalled infrastructure projects, the Aayog will take care of cases of dispute and the order of the arbitration panel. It will suggest infrastructure related ministries to ease arbitration norms and release stalled payments of infrastructure companies.

The government is working on a proposal to help the sector to avoid cost over runs and payment delays. This proposal comes at a time when about Rs 1.65 lakh crore of banks' Rs 3.65 lakh crore exposure to the construction sector is stressed. Therefore, Niti Aayog has been asked to prepare a Cabinet note for infrastructure ministries such as road and highways, transport, urban development and petroleum, where project delays are largely due to reasons like environment clearance and land acquisition.

A cabinet note proposes that in case of a dispute and the order of the arbitration panel going in the company's favour, no appeals should be made against the order and the government should clear the payment due to the company. The note also suggests that infrastructure related ministries should ease arbitration norms and release stalled payments of infra companies. According to Ministry of Statistic and Programme Implementation, as on June as many as 1, 330 of 1,076 projects, each worth at least Rs 150 crore, were running behind schedule.

The CNX Nifty is currently trading at 8586.40, down by 5.80 points or 0.07% after trading in a range of 8573.30 and 8622.95. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.74%, GAIL India up by 2.41%, Tata Motors - DVR up by 2.15%, Tata Motors up by 2.04% and Hindalco up by 1.23%. On the flip side, Indusind Bank down by 1.65%, Adani Ports &Special down by 1.55%, Idea Cellular down by 1.36%, Yes Bank down by 1.35% and Bank of Baroda down by 1.20% were the top losers.

Asian markets were trading mixed; Taiwan Weighted rose 0.18%, FTSE Bursa Malaysia KLCI gained 0.1%, Shanghai Composite increased 0.27% and Hang Seng was up by 0.34%. On the flip side, Nikkei 225 declined 1.17%, Jakarta Composite shed 0.33% and KOSPI Index was down by 0.21%.