Indian equities pare gains; Nifty holds 5,700 mark

Indian equity markets pared gains but continued its firm trade in the late afternoon session on account of selling in frontline counters. Traders were seen piling some position in Realty, Auto and Health Care sector stocks while selling was witnessed in Oil & Gas, IT and TECK sector stock. Hectic activity was noticed in FMCG stocks like Dabur India, Nestle India, Marico, Godrej Consumer Products, Colgate-Palmolive (India), Britannia Industries and Tata Global Beverages on expectation of likely normal monsoon this year. FMCG companies derive substantial revenue from rural markets. In scrip specific development, HMT was trading firm on reports that the government is mulling Rs 1,000 crore revival plans for the company. Sun TV Network was trading in green after the foreign research house Credit Suisse initiated an outperform rating on the stock. Kingfisher Airlines was trading in red on fears that the aviation regulator may not allow the carrier to restart operations. The airline had submitted a revival plan to the DGCA last week but it did not yield any results because officials found the plan inconclusive.  On the global front, most of the Asian markets were trading in green while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,700 and 18,700 levels respectively. The market breadth on BSE was positive in the ratio of 1083:1065 while 130 scrips remain unchanged.

The BSE Sensex is currently trading at 18,767.69, up by 22.76 points or 0.12% after trading in a range of 18,869.88 and 18,673.44. There were 18 stocks advancing against 12 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading up by 0.24% and 0.46% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.43%, Auto up by 1.33%, Health Care up by 1.13%, FMCG up by 1.12% and Bankex up by 1.00% while, Oil & Gas down by 1.59%, IT down by 0.71%, TECK down by 0.48%, Consumer Durables down by 0.13% and Capital Goods down by 0.09% were the top losers on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.61%, Sun Pharma up by 3.86%, Sterlite Industries up by 3.23%, SBI up by 2.30% and ICICI Bank up by 2.09%.

On the flip side, RIL down by 3.29%, TCS was down by 1.47%, Wipro down by 1.30%, Tata Power down by 0.99% and Jindal Steel down by 0.82% were the top losers on the Sensex.

Meanwhile, in a major boost for India’s infrastructure sector, the Employees' Provident Fund Organization (EPFO), the country's largest pension fund, is finally ready to route some of its $100 billion corpus into the sector through Infrastructure Debt Funds or IDFs. The move will help the cash-strapped core sector that requires an estimated $1 trillion over the next five years.

Long-term funds would be crucial for building new infrastructure that faces severe funding constraints as banks having little room to deploy fresh funds into long-gestation projects due to the concerns over rising asset liability mismatch. Therefore, the finance ministry has been knocking insurance as well as pension funds to push more investment in the infrastructure sector. 

Further, under the new norms, the maximum tenure for AAA-rated PSUs has been raised to 25 years from 15 years and to 15 years from 8 years for AA-rated PSUs. AAA ratings denote the highest level of safety for bond investments. With EPFO opening up its Rs 500,000-crore corpus to IDFs, fresh money could trickle into infrastructure.

Although, the EPFO is expected to get better returns on this investment as it had just offered 8.25 per cent return to its subscribers in 2011-12 because of the strict investment guidelines that allow a majority of its corpus to be put in government backed securities.

IDF provides an opportunity to channelize savings and global liquidity to create an alternate pool of capital, for investing in public-private projects in ports, railways, roads, highways and other such infrastructure projects, which have already commenced commercial production. The first IDF was set up earlier this year jointly by ICICI Bank, Bank of Baroda, Citibank and Life Insurance Corporation of India (LIC) with a corpus of $2 billion.

Meanwhile, the government has identified the development of infrastructure a most critical requirement for sustaining the current growth momentum of the economy. The infrastructure sector’s growth lingers to a great extent on the investments made and timely execution of the projects. 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 is currently trading at 5,702.05, up by 13.10 points or 0.23% after trading in a range of 5,732.15 and 5,669.00. There were 27 stocks advancing against 22 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were M&M up by 4.63%, Sun Pharma up by 3.82%, Sesa Goa up by 3.35%, Ambuja Cements up by 2.83% and SBI up 2.40%.

On the flip side, Reliance Industries down by 3.43%, Reliance Infrastructure down by 2.60%, TCS down by 1.47%, Ranbaxy down by 1.30% and Tata Power down by 1.25% were the major losers on the index.

Most of Asian equity indices were trading in green; Jakarta Composite rose 0.75%, KLSE Composite surged 0.60%, Nikkei 225 soared 1.22%, Taiwan Weighted was up by 0.10% and KOSPI Composite up by 0.08%. On the other hand, Shanghai Composite down by 0.05%, Hang Seng lost 0.47% and Straits Times dropped by 0.13%.

The European markets were trading in red; France’s CAC 40 lost 0.71%, Germany’s DAX dropped 1.18% and United Kingdom’s FTSE 100 edged lower by 0.49%.