Benchmarks reverse gears; slip into negative territory

Reversing gears, Indian equity markets have slipped into negative territory in noon session as market participants remained jittery after the US Federal Reserve raised interest rates by a quarter point on late Wednesday and signalled a faster pace of increases in 2017 and 2018, increasing fears that higher interest rates in US would trigger foreign investment outflows from emerging markets including India towards the US. On the domestic front, investors remained cautious with global rating agency Standard & Poor's statement that demonetisation has cast a shadow over the RBI's competence and independence, it further said that slow replacement of the abolished bills has sparked a shortage of cash that has hit large parts of the economy. However, the downside remained capped with Prime Minister Narendra Modi’s statement that presently, cleaning the system from black money and corruption is very high on his agenda and added that India is currently witnessing an economic transformation. Meanwhile, shares of liquor makers such as Globus Spirits, Pincon Spirit, Radico Khaitan and United Spirits declined after the Supreme Court ordered closure of liquor shops along the national and state highways.

On the global front, Asian markets were trading mostly lower on Wednesday after the Federal Reserve raised rates for the first time in a year and hinted at the risk of a faster pace of tightening than investors were positioned for. Yields on short-term US debt surged to the highest since 2009, sending the dollar to the peak which was not seen in almost 14 years. The drop in the yen could cushion Japanese stocks, lifting Japan's Nikkei 0.9 percent. However, other Asian markets had less luck, with MSCI's broadest index of Asia-Pacific shares outside Japan dropping 0.7%. Overnight on Wall Street, the Dow ended lower 0.6%, while the S&P 500 declined 0.81% and the Nasdaq 0.5%.

Back home, stocks from IT, Realty and Power counters were supporting the markets, while those from FMCG, Oil & Gas and Consumer Durables counters were adding to the underlying cautious undertone. In scrip specific development, National Aluminium Company declined after the company reported 52% year on year drop in its net profit at Rs 121 crore for the quarter ended September 30, 2016. Moreover, TVS Srichakra slipped after the company reported 1.6% year on year decline in its standalone net profit at Rs 48.18 crore for the quarter ended September 30, 2016.

The market breadth remained optimistic as there were 1159 shares on the gaining side against 1139 shares on the losing side, while 135 shares remained unchanged.

The BSE Sensex is currently trading at 26552.78, down by 50.06 points or 0.19% after trading in a range of 26407.58 and 26737.86. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.09%, while Small cap index up by 0.26%.

The top gaining sectoral indices on the BSE were IT up by 1.23%, TECK up by 0.88%, Realty up by 0.44%, Power up by 0.24% and Metal up by 0.13%, while FMCG down by 0.83%, Oil & Gas down by 0.83%, Consumer Durables down by 0.26%, PSU down by 0.22% and Auto down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.29%, Power Grid up by 1.13%, Infosys up by 0.99%, Mahindra & Mahindra up by 0.84% and Bajaj Auto up by 0.78%. On the flip side, Sun Pharma down by 1.95%, Tata Motors down by 1.61%, ITC down by 1.22%, Cipla down by 1.22% and Dr. Reddys Lab down by 1.07% were the top losers.

Meanwhile, in order to promote the expansion of port infrastructure, the Union Cabinet, headed by the Prime Minister, Narendra Modi has given approval to the proposal of Ministry of Shipping to replace the existing Major Port Trusts Act, 1963 with the Major Port Authorities Bill, 2016. The move aims to empower 12 major ports to perform with greater efficiency on account of full autonomy in decision-making and by modernising the institutional structure of major ports and once passed by Parliament will give port boards more autonomy and flexibility.

As per the proposed bill, all future public-private partnership (PPP) operators will be free to fix tariff based on market conditions and will simply need to notify the port authority. The new Bill has also proposed a simplified composition of the Board of Port Authority which will comprise of 11 members from the present 17 to 19 Members representing various interests. A compact Board with professional independent members will strengthen decision making and strategic planning. Provision has been made for inclusion of representative of the State Government in which the Major Port is situated, Ministry of Railways, Ministry of Defence and Customs, Department of Revenue as Members in the Board apart from a Government Nominee Member and a Member representing the employees of the Major Ports Authority. One of the salient features of the Bill is that it is more compact in comparison to the existing bill as the number of sections has been reduced to 65 from 134 by eliminating overlapping and obsolete Sections.

The new Major Ports Authority Bill, 2016 would help to impart faster and transparent decision making benefiting the stakeholders as well as better project execution capability. The proposed bill is aimed at reorienting the governance model in central Ports to landlord port model in line with the successful global practice. This will also help in bringing transparency in operations of Major Ports.

The CNX Nifty is currently trading at 8169.45, down by 13.00 points or 0.16% after trading in a range of 8121.95 and 8225.90. There were 20 stocks advancing against 30 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were TCS up by 2.30%, HCL Tech up by 1.35%, Power Grid up by 1.10%, Mahindra & Mahindra up by 0.98% and Bajaj Auto up by 0.93%. On the flip side, Sun Pharma down by 1.70%, Tata Motors down by 1.49%, Ultratech Cement down by 1.44%, Ambuja Cement down by 1.41% and ITC down by 1.35% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 1.92%, Taiwan Weighted decreased 0.09%, Shanghai Composite shed 0.98%, Jakarta Composite dipped 0.12% and FTSE Bursa Malaysia KLCI dropped 0.43%. On the flip side, KOSPI Index increased 0.13% and Nikkei 225 was up by 0.10%.