Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in afternoon session, amid concerns of foreign fund outflows after the rupee hit a new low in its recent record-setting spree. Investors’ sentiments remain dented with a private report highlighting that a sustained weakness in the rupee may push the Reserve Bank of India to further tighten monetary policy, perhaps as early as next month. Some concern also came with NITI Aayog Vice Chairman Rajiv Kumar’s statement that the revised mechanism introduced by former RBI governor Raghuram Rajan to identify NPAs stopped banks from issuing fresh credit, resulting in slowdown of the economy in post demonetisation period. However, traders took some support with Fitch Ratings’ statement that the currency volatility will have only a limited impact on India’s sovereign credit profile as the country benefits from strong external finances. On the sectoral front, stocks related to telecom sector edged lower with private report stating that the sector continues to reel under acute financial stress, weighed down by nearly Rs 8 lakh-crore debt and bruising price wars reflected in slumping revenue and operating income.

The BSE Sensex is currently trading at 38366.92, up by 54.40 points or 0.14% after trading in a range of 38189.80 and 38518.56. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.15%, while Small cap index was down by 0.60%.

The top gaining sectoral indices on the BSE were IT up by 2.45%, TECK up by 1.88% and Energy up by 0.41%, while FMCG down by 1.97%, Basic Materials down by 1.21%, Consumer Durables down by 1.18%, Metal down by 1.04% and Telecom down by 0.92% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.66%, TCS up by 1.76%, Wipro up by 1.31%, Reliance Industries up by 1.19% and HDFC up by 0.89%. On the flip side, Hindustan Unilever down by 3.61%, Asian Paints down by 3.16%, Indusind Bank down by 2.11%, Coal India down by 1.74% and ITC down by 1.47% were the top losers.

Meanwhile, the ministry of statistics & programme implementation (MOSPI) in its latest report has indicated that as many as 343 infrastructure projects, worth Rs 150 crore or above, have reported a cost overrun to the tune of Rs 2.23 lakh crore due to delays and other reasons. It monitors infrastructure projects worth Rs 150 crore and above. Further, it indicated that total original cost of implementation of the 1,332 projects was Rs 16,26,675.52 crore and their anticipated completion cost is likely to be Rs 18,49,766.91 crore, which reflects overall cost overruns of Rs 2,23,091.39 crore (13.71% of original cost).

According to the MOSPI’s latest report, of these 1,332 projects, 343 reported cost overrun and 253 time escalation. It also noted that the expenditure incurred on these projects till April 2018 is Rs 6,63,109.75 crore, which is 35.85% of the anticipated cost of the projects. However, it said that the number of delayed projects decreases to 187 if delay is calculated with reference to latest revised schedules of completion. It stated that for 634 projects neither the year of commissioning nor the tentative gestation period has been reported. It added that out of 253 delayed projects, 59 projects have overall delay in the range of 1 to 12 months, 48 (13-24 months), 76 projects (25-60 months) and 70 projects (61months and above).

The report attributes the time overrun to a host of issues, including delay in land acquisition, forest clearance, supply of equipment, fund constraint, Maoist incursion, legal cases and law and order situation. It also pointed out that the brief reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in forest clearance, delay in supply of equipment, fund constraints and geological surprises, among others. It observed that project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are under-reported.

The CNX Nifty is currently trading at 11579.55, down by 2.80 points or 0.02% after trading in a range of 11532.05 and 11602.55. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.54%, Tech Mahindra up by 2.25%, TCS up by 1.96%, HCL Tech. up by 1.93% and Wipro up by 1.39%. On the flip side, Hindustan Unilever down by 3.64%, Asian Paints down by 3.37%, Indiabulls Housing Finance down by 2.62%, UPL down by 2.45% and Indusind Bank down by 2.20% were the top losers.

Asian markets were trading mostly in green; Straits Times increased 5.45 points or 0.17% to 3,212.65, Taiwan Weighted rose 57.16 points or 0.52% to 11,021.38, Hang Seng added 219.00 points or 0.78% to 27,931.54, Shanghai Composite surged 30.75 points or 1.12% to 2,751.48 and KOSPI increased 8.69 points or 0.38% to 2,315.72.

On the flip side, Jakarta Composite decreased 27.08 points or 0.46% to 5,940.50 and Nikkei 225 was down by 10.48 points or 0.05% to 22,696.90.