Benchmarks continue to trade under pressure

Indian equity benchmarks remained under pressure in the last leg of trade, benchmarks continued their flat trade with negative bias. Sentiments also remained dampened as information technology stocks were hit by tough talk on visas by US president Donald Trump. Trump pledged to stop companies from abusing the visa process for foreign workers. IT firms were among the leading decliners, with the Nifty IT index shedding as much as 1.51 per cent, Infosys fell as much as 2.44 per cent, while Tata Consultancy Services and Wipro shed around one and a half per cent, respectively. Oil marketing companies declined after crude prices surged to their highest since mid-2015. Traders also remained cautious ahead of domestic trade deficit data, November CPI inflation and WPI inflation to be announced later in the week.

On the global front, Asian markets were mixed ahead of a Federal Reserve meeting that is widely expected to raise U.S. interest rates and as oil prices soared after producers agreed to reduce output. South Korean stocks remained unchanged following the impeachment of the country’s president.

The BSE Sensex is currently trading at 26524.65, down by 222.53 points or 0.83% after trading in a range of 26511.98 and 26725.31. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined by 1.17%, while Small cap index was down by 0.62%.

The top losing sectoral indices on the BSE were Auto down by 1.76%, Bankex down by 1.38%, Consumer Durables down by 1.26%, FMCG down by 0.98% and Oil & Gas was down by 0.95%, while there were no gainers on BSE sectoral front.

The top gainers on the Sensex were ONGC up by 1.55%, NTPC up by 1.07%, Sun Pharma Inds. up by 0.67%, Larsen & Toubro up by 0.42% and Reliance Industries up by 0.40%. On the flip side, Asian Paints down by 3.11%, Tata Motors down by 2.66%, Axis Bank down by 2.52%, Bajaj Auto down by 2.28% and Adani Ports &Special down by 2.01% were the top losers.

Meanwhile, domestic rating agency, ICRA in its latest report has said that NHAI’s plan to provide relief to road developers by covering 90 per cent of interest cost and O&M expenses for the period during which government had suspended user fee collection on National Highways with effect from November 9 and which went on till December 2 (midnight), is insufficient as it does not cover debt repayment obligation. It also mentioned that this compensation may possibly lead to clashes with developers given the huge revenue loss for them.

According to the report, in most of the toll projects, the revenue loss is greater than Rs 1 crore and even in terms of the net realisable fee, it’s around 6.6 per cent (24/365*100), some of the developers are seeking for Clause 41 to be implemented in this case. Under this, NHAI has obligation to place the concessionaire in the same financial position as it would have enjoyed had there been no such change in law. In which case, the clause also provides for cash compensation for revenue loss in order to protect the net present value of the cash flows to the developers.

Earlier NHAI came up with a plan to provide compensation to the extent of 90 per cent of interest cost for the 24-day period, only to the extent of the interest accrued on principal amount of debt provided by senior lenders for financing the total project cost. National Highway Authority of India (NHA) has suffered an income loss of around Rs 1,238 crore (at an average toll collection per day of Rs 51.59 crore) due to suspension of toll collection on highways till December 2 post demonetisation.

The CNX Nifty is currently trading at 8179.05, down by 82.70 points or 1.00% after trading in a range of 8178.20 and 8230.65. There were 9 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.56%, NTPC up by 1.07%, Sun Pharma up by 0.61%, TCS up by 0.40% and Bosch was up by 0.39%. On the flip side, BPCL down by 3.38%, Ultratech Cement down by 3.06%, Asian Paints down by 3.05%, Ambuja Cement down by 3.03% and Tata Motors - DVR was down by 2.88% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined by 327.96 points or 1.44% to 22,433.02, Shanghai Composite dropped by 79.91 points or 2.47% to 3,152.97, Taiwan Weighted shed by 42.74 points or 0.46% to 9,349.94 and FTSE Bursa Malaysia KLCI was down by 2.33 points or 0.14% to 1,641.42.

On the flip side, KOSPI Index gained 2.55 points or 0.13% to 2,027.24, Jakarta Composite increased 4.39 points or 0.08% to 5,308.13 and Nikkei 225 was up by 158.66 points or 0.84% to 19,155.03.

European markets were trading mostly in green; UK’s FTSE 100 increased 0.2 points to 6,954.41, France’s CAC gained 8.17 points or 0.17% to 4,772.24, while Germany’s DAX was down by 22.05 points or 0.2% to 11,181.58.