Benchmarks trim gains in late afternoon session

Benchmarks trimmed most of their initial gains in late afternoon session, but managed to keep their head above neutral line. Traders found support after Ministry of Finance, Department of Expenditure has released the 19th weekly installment of Rs 2,104 crore to the States. Out of this, an amount of Rs 2,103.95 crore has been released to 7 States and an amount of Rs. 0.05 crore has been released to the Union Territory of Puducherry. Traders took note of report that financial sector will have to play an important role in infrastructure lending which needs specialised expertise. Chief Economic Adviser KV Subramanian said that for India to become a USD 5 trillion economy, capital allocation to the infrastructure sector should be of high quality. Capital allocation to the infrastructure sector has to be of high quality and the financial sector has an important role in this regard. On the global front, Asian markets were trading mixed as investors await US House of Representatives' decision on passing the new massive financial rescue bill for the economy. European markets were trading mostly in green even after the Bank of England (BOE) governor warned on the prospect of rising inflation.

The BSE Sensex is currently trading at 50594.71, up by 153.64 points or 0.30% after trading in a range of 50396.10 and 50994.60. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.32%, while Small cap index was down by 1.03%.

The only gaining sectoral indices on the BSE were Bankex up by 1.07%, while Metal down by 3.05%, Oil & Gas down by 2.94%, PSU down by 2.55%, Utilities down by 2.54% and Power was down by 2.27% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 2.55%, HDFC Bank up by 2.26%, HDFC up by 1.72%, ICICI Bank up by 1.54% and Asian Paints up by 1.37%. On the flip side, ONGC down by 2.87%, Power Grid down by 2.79%, NTPC down by 2.22%, SBI down by 1.77% and Bharti Airtel down by 1.65% were the top losers.

Meanwhile, in order to meet the GST compensation shortfall, the Ministry of Finance, Department of Expenditure has released the 19th weekly instalment of Rs 2,104 crore to the States. Out of this, an amount of Rs 2,103.95 crore has been released to 7 States and an amount of Rs. 0.05 crore has been released to the Union Territory of Puducherry.Till now, 96 percent of the total estimated GST compensation shortfall has been released to the States & UTs with Legislative Assembly. Out of this, an amount of Rs 97,242.03 crore has been released to the States and an amount of Rs 8,861.97 crore has been released to the 3 UTs with Legislative Assembly.

The amount released this week was the 19th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 5.8594%. So far, an amount of Rs 1,06,104 crore has been borrowed by the Central Government through the special borrowing window at an weighted average interest rate of 4.8842%.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources. All the States have given their preference for Option-I.

The CNX Nifty is currently trading at 14999.25, up by 43.05 points or 0.29% after trading in a range of 14925.45 and 15119.30. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were SBI Life up by 5.27%, Kotak Mahindra Bank up by 2.69%, HDFC Bank up by 2.57%, Grasim Industries up by 1.89% and HDFC up by 1.78%. On the flip side, BPCL down by 5.42%, Tata Steel down by 4.04%, Indian Oil down by 3.62%, GAIL India down by 3.37% and ONGC down by 2.66% were the top losers.

Asian markets were trading mixed, Nikkei 225 surged 284.69 points or 0.99% to 29,027.94, Hang Seng increased 232.40 points or 0.81% to 28,773.23, Taiwan Weighted strengthened 32.98 points or 0.21% to 15,853.09 and Straits Times was up by 32.17 points or 1.05% to 3,103.33. On the flip side, KOSPI fell 19.99 points or 0.67% to 2,976.12, Jakarta Composite lost 48.82 points or 0.78% to 6,199.65 and Shanghai Composite was down by 62.12 points or 1.82% to 3,359.29.

European markets were trading mostly in green, UK’s FTSE 100 increased 8.44 points or 0.13% to 6,727.57 and France’s CAC was up by 5.18 points or 0.09% to 5,908.17. On the flip side, Germany’s DAX was down by 10.99 points or 0.08% to 14,369.92.