Benchmarks recoup partial losses; Nifty holds above 6,150 bastion

Benchmark equity indices have recouped some losses on the back of lower level buying despite a quiet European markets start. European stocks opened lower on Friday, mirroring losses on Wall Street, following comments from some US central bank officials saying the Federal Reserve could begin easing up its monetary stimulus this summer. Back home, however, markets seem to be consolidating at current levels after two consecutive session of spectacular run as select investors digesting slew of negative news, have mostly undertaken a cautious approach, which have capped the upturn of benchmark equity indices. 30-share index, Sensex, trading a little below its neutral line is oscillating above the crucial 20,200 bastion, while, 50-share index, Nifty, too trading flat with negative bias, is holding above the 6,150 psychological level.

On the BSE sectoral front, stocks from Consumer Durable, Health Care and Oil & Gas counters are endorsing the underlying weakness of the bourses. Banking shares too are trading downbeat after two straight days of gains sparked by rising hopes the Reserve Bank of India will cut interest rates as early as June. Additionally, Pharma stocks are trading lower after the government formally notified a new drug pricing policy designed to increase the number of drugs deemed essential that are subject to price caps. Nevertheless, stocks from Realty, Power and Capital Goods counters, are slogging to limit the losses of the bourses. Meanwhile, Cement stocks such as ACC Cements, Ambuja Cement and Madras Cements are trading positive even as Competition Appellate Tribunal (COMPAT) levied 10 per cent penalty of Rs 6,300 crore on cement companies, which needs to be paid within a month.

The overall market breadth on BSE is in the favour of declines, which have thumped advances in the ratio of 1056:973; while 127 shares remain unchanged.

 The BSE Sensex is currently trading at 20,233.59, down by 13.74 points or 0.07% after trading in a range of 20,308.97 and 20,185.27. There were 14 stocks advancing against 16 declines on the index.

The broader indices too added some ground; the BSE Mid cap and Small cap index were trading up by 0.24% and 0.13% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.72%, Power up by 0.1.39%, Capital Goods up by 0.45%, PSU up by 0.43% and Auto up by 0.21%, while, Consumer Durables down by 1.14%, Health Care down by 0.49%, Oil & Gas down 0.21%, Metal down by 0.12% and FMCG down 0.07% were the losers on the BSE.

The top gainers on the Sensex were NTPC up by 2.56%, ICICI bank up by 1.24%, ONGC up by 1.01%, Bajaj Auto up by 0.91% and TCS up by 0.90%.

On the flip side, Dr Reddys Lab down by 1.47%, Wipro down by 1.31%, Bharti Airtel down by 1.23% Sterlite Industries down by 1.17% and HDFC Bank down by 1.11%, were the top losers on the Sensex.

Meanwhile, in order to make a speedy resolution on disputes relating to public contracts or public-private partnerships (PPPs), the Prime Minister’s Office (PMO) has asked the Planning Commission to formulate a draft Bill on dispute resolution in infrastructure projects especially in the gas and road sectors. The proposed bill will be drafted in consultation with all stakeholders and ministries.

The PMO in its statement said, ‘dispute resolution in large public contracts is an area of growing concern and the Prime Minister has initiated the first steps in improving the institutional arrangement for dispute settlement’. The statement comes at a time when the government is aiming to get 50 per cent of the $1-trillion investment for infrastructure sector from private companies.

Further, the PMO admitted that there were concerns over the existing PPP mechanism as the private companies have been raising concerns over the responses they receive from project authorities about the obligations of project authorities leading to increase in costs, lower returns on investment and project delays. Thereby, it is essential to consider an institutional arrangement to address the disputes to provide assurance of speedy resolution, especially for large public contracts.

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

The CNX Nifty is currently trading at 6,166.65, down by 3.25 points or 0.05% after trading in a range of 6,188.60 and 6,149.30. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were NTPC up by 2.59%, Ambuja Cement up by 2.12%, Cairn India up by 1.53%, JP Associates up by 1.50% and Grasim up by 1.47%.

On the flip side, IndusInd Bank down by 2.58%, Dr Reddy's Laboratories down by 1.51%, HCL technologies down by 1.33%, NMDC down by 1.28% and Lupin down by 1.25% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 1.52%, Jakarta Composite surged 0.47%, KLSE Composite increased 0.19%, Nikkei 225 added 0.67% and Straits Times was up by 0.02%.

On the flip side, Taiwan Weighted was down 0.26% was the only loser.  Markets in Hong Kong and South Korea are closed for holidays.

European markets got off to a flat to negative start; With CAC 40 declining by 0.36%, DAX sliding by 0.18% and FTSE 100 edging lower by 0.06%.