Markets continue to hold their head above water

Recovering from day's lows, Indian equity indices were holding their head above water and trading up with modest gains of around quarter percent. The Sensex continued to hold 26,700 level, while Nifty was trading above 8,250 level. Higher opening in European counterparts added some support to domestic sentiments. European markets were trading slightly in green as the European Central Bank extended its quantitative easing program in the face of political uncertainty at home and abroad, but said it would slow the stimulus program from April next year. Though, investors remained cautious ahead of the outcome of Federal Reserve's two-day policy meeting that will start next week. Majority of economists expect Fed rate hike but the commentary on further rate hike is key to watch out for. Back home, on the sectoral front, select pharma stocks remained under pressure with the report that the Indian pharmaceutical industry will grow at a slower pace due to sluggish growth in the US market, increased competition leading to price erosion in high single digits and generic adoption reaching saturation levels.

The BSE Sensex is currently trading at 26767.92, up by 73.64 points or 0.28% after trading in a range of 26707.81 and 26803.76. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.07%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Realty up by 1.16%, Bankex up by 1.02%, FMCG up by 0.74%, IT up by 0.62% and Consumer Durables up by 0.46%, while Auto down by 0.67% and Metal down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.15%, ITC up by 2.10%, SBI up by 2.02%, ONGC up by 1.26% and Reliance Industries up by 0.80%. On the flip side, Bajaj Auto down by 1.90%, Coal India down by 1.67%, HDFC down by 1.63%, Mahindra & Mahindra down by 1.20% and Hero MotoCorp down by 0.89% were the top losers.

Meanwhile, in order to raise more funds and attract long-term institutional investment, the government has approved monetisation of public funded operational national highway projects that are generating toll revenue for at least two years. The Cabinet Committee on Economic Affairs in August had authorised National Highways Authority of India (NHAI) to monetise the public funded highway projects which could result in funds in the range of Rs.80,000 to Rs.1 trillion initially.

Minister of State for road transport and highways, Mansukh L Mandaviya said that approval has been given for at least two years after start of operation through the Toll Operate Transfer (TOT) model. He added that the recycling of brownfield assets shall be done by inviting bids under the model in which foreign pension funds can also participate subject to the bidder satisfying the eligibility criteria required in the bid. The proceeds from such monetisation will go to the Consolidated Fund of India and are to be ring-fenced for utilisation by the NHAI.

The minister further elaborated that as of now, 75 operational national highway projects have been identified for monetisation under the TOT model. The aggregate length of these projects is around 4,500 km and their annual toll collection is around Rs 2,700 crore.

The TOT model provides an efficient Operation and Maintenance (O&M) framework requiring reduced involvement of NHAI in projects post construction completion. Further, the corpus generated from proceeds of such project monetisation could be utilised by the government to meet its fund requirements regarding future development and O&M of highways in the country.

The CNX Nifty is currently trading at 8261.05, up by 14.20 points or 0.17% after trading in a range of 8241.95 and 8274.95. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 2.45%, Tech Mahindra up by 2.18%, SBI up by 2.12%, Bank of Baroda up by 2.02% and ITC up by 2.01%. On the flip side, Bharti Infratel down by 3.13%, Bajaj Auto down by 2.03%, HDFC down by 1.97%, Coal India down by 1.84% and Eicher Motors down by 1.81% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 100.86 points or 0.44% to 22,760.98, Jakarta Composite slipped 16.36 points or 0.31% to 5,287.38, KOSPI Index decreased 6.38 points or 0.31% to 2,024.69 and FTSE Bursa Malaysia KLCI was down by 4.47 points or 0.27% to 1,639.28. On the other hand, Taiwan Weighted rose 16.82 points or 0.18% to 9,392.68, Shanghai Composite increased 17.52 points or 0.54% to 3,232.88 and Nikkei 225 was up by 230.9 points or 1.23% to 18,996.37.

All the European markets were trading in green; Germany’s DAX rose 4.85 points or 0.04% to 11,184.27, France’s CAC increased 9.13 points or 0.19% to 4,744.61 and UK’s FTSE 100 was up by 13.24 points or 0.19% to 6,944.79.