Indian markets make flat-to-positive start on firm global cues

Key domestic benchmarks, recovering from their few sessions of downfall, have made a flat-to-positive opening supported by firm global cues. Overnight, the US markets made a bounce back, as the Fed would continue its asset purchase program at a pace of $85 billion a month and traders shrugged off continued uncertainty about the situation in Cyprus after the Mediterranean island nation’s parliament rejected a proposed European Union bailout plan. Asian markets too were trading in fine fettle with Japanese and Chinese benchmarks leading from the front. Growth in China’s vast manufacturing sector picked up in March, a preliminary survey of factory managers showed on Thursday. While, Japanese Nikkei rose to a 4-1/2 year high on expectations of further monetary easing by the Bank of Japan’s new leadership.

Back home, the frontline gauges managed to keep their head above water on report that foreign direct investment (FDI) in India, after declining for two months in a row, grew by 8 percent year-on-year to $2.15 billion in January. Some strength also came in after ratings agency CARE pegged India’s FY14 GDP growth at 6 percent and said that the expansion over the current fiscal will also boost bank credit. On the sectoral front, metal witnessed the maximum gain in trade followed by technology and banking while, auto, realty and power remained the top losers on the BSE sectoral space. The broader indices were struggling to get some traction and trading mixed while, the market breadth on the BSE was negative; there were 782 shares on the gaining side against 966 shares on the losing side while 106 shares remain unchanged.

The BSE Sensex opened at 18,926.21; about 42 points higher compared to its previous closing of 18,884.19, and has touched a high and a low of 18,987.48 and 18,900.48 respectively.

The index is currently trading at 18,908.66, up by 24.47 points or 0.13%. There were 15 stocks advancing against 15 declines on the index.

The overall market breadth has made a weak start with 46.29% stocks advancing against 49.72% declines. The broader indices were trading mixed; the BSE Mid cap index was down by 0.07% and Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were, Metal up by 0.63%, Teck up by 0.60%, Bankex up by 0.57%, IT up by 0.35% and Capital Goods up by 0.12% while, Auto down by 1.34%, Realty down by 0.62%, Power down by 0.45%, Oil & Gas down by 0.43% and PSU down by 0.18% were the top loser on the index.

The top gainers on the Sensex were Bharti Airtel up by 3.43%, ICICI Bank up by 2.35%, Jindal Steel up by 2.12%, Gail India up by 0.93% and HDFC up by 0.88%.

On the flip side, Tata Motors was down by 3.04%, Mahindra & Mahindra was down by 1.43%, NTPC was down by 1.33%, BHEL was down by 0.91% and Bajaj Auto was down by 0.79% were the top losers on the Sensex.

Meanwhile, giving relief to the infrastructure sector, the Reserve Bank of India (RBI) has decided to treat loans for infrastructure companies implementing public private partnership (PPP) projects as secured subjected to certain conditions. Pursuant to which, the borrowing cost for infrastructure companies implementing these projects could come down as the lenders may be considered as secured to the extent assured by the project authority.

The central bank, in its notification issued to banks, has said that most of the projects in India are user-charge based for which the Planning Commission has published Model Concession Agreements (MCAs). The PPP projects have been adopted by various Ministries and State Governments and thus provide adequate comfort to the lenders regarding security of their debt. In view of the above features, it has been decided that in case of PPP projects, the debts due to the lenders may be considered as secured to the extent assured by the project authority in terms of the Concession Agreement. 

However, as per the existing guidelines, annuities received under Build-Operate-Transfer (BOT) model for road/highway projects, there are provisions to compensate the project sponsor if a certain level of traffic is not achieved, to be treated as tangible securities.

The government has identified the development of infrastructure a most critical prerequisite for sustaining the current growth momentum of the economy. The pace of development in the infrastructure sector lingers to a great extent on the investments made and timely execution of the projects.

Further, investment in existing and new infrastructure projects involves high risks, low returns, huge capital, high incremental capital/ output ratio, long payback periods as well as superior technology. Hence, in order to bring in adequate resources for setting up of a sound and efficient infrastructural base, the government has entered into the 'Public Private Partnership (PPP)' programme.

The CNX Nifty opened at 5,705.90; about 9 points higher as compared to its previous closing of 5,694.40, and has touched a high and a low of 5,728.80 and 5,705.90 respectively.

The index is currently trading at 5,709.90, up by 15.50 points or 0.27%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 3.59%, ICICI Bank up by 2.42%, Jindal Steel up by 2.34%, UltraTech Cement up by 2.09% and Siemens up by 1.49%.

On the flip side, Tata Motors down by 2.68%, Reliance Infrastructure down by 1.77%, NTPC down by 1.75%, M&M down by 1.11% and Bajaj-Auto down by 0.76%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite rose 9.33 points or 0.40% to 2,326.71, Hang Seng added 0.78 points to 22,257.22, Jakarta Composite increased 1.35 points or 0.03% to 4,832.85, KLSE Composite moved up 0.22 points or 0.01% to 1,631.76, Nikkei 225 surged 151.44 points or 1.21% to 12,619.67, Straits Times jumped 20.10 points or 0.62% to 3,268.50 and Taiwan Weighted was up by 33.31 points or 0.43% to 7,831.34.

On the flip side, KOSPI Composite was down by 1.91 points or 0.10% to 1,957.50.