Benchmark continue weak trade on weak global cues

The benchmarks have continued to remain weak in the late morning session after making a weak start for the week as sentiment turned bearish in global markets on concerns of tapering down of bond purchase programme in the US. Foreign institutional investors, the biggest driver in Indian markets, have sold cash shares for eight straight sessions, totalling Rs. 5,949 crore. The sustained selloff by FIIs is weighing on sentiments, traders. The market is likely to remain volatile in the near ahead of the June series F&O expiry this week. On the global front, Asian markets were trading near their fresh nine and a half month low at this point of time led by the Chinese market amid cash crunch at the banks and after an investment banker lowered its 2013 growth estimates for the country, citing weaker economic indicators and tightening of financial conditions.

Back home, the traders were seen selling in Consumer Durables, Realty and Capital Goods sector. In scrip specific developments, Companies engaged in gems and jewellery business too remain under pressure on concerns that the Reserve Bank of India and government initiative to curb gold imports may impact the sector’s growth. In scrip specific actions, Tata Power soared after the company is looking for opportunities across geographies including the Middle East and aims to have about 5,000 MW overseas generation capacity in coming years. NMDC surged after Legacy Iron Ore the Australian arm of state-owned National Mineral Development Corp. (NMDC), plans to raise AUD 25 million by way of rights issue. Bharti Airtel tanked after the telecom major said it will cut 4G data charges by 31% on Monday in an aggressive bid to boost mass appetite for fourth-generation wireless broadband services and also make life more difficult for future challengers. .

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 5,600 and 18,600 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in ratio of 592:984. The BSE Sensex is currently trading at 18652.74, down by 121.50 points or 0.65% after trading in a range of 18714.06 and 18582.55. There were 9 stocks advancing against 21 declines on the index. The broader indices were trading in green; the BSE Mid cap index was down by 1.34% and Small cap index was down by 0.73%.

The top losing sectoral indices on the BSE were Consumer Durables down by 2.72%, Realty down by 2.28%, Capital Goods down by 1.49%, PSU down by 1.25%, and Power down by 1.16% while there were the no gainers on the BSE.

The top gainers on the Sensex were Hindalco Industries up by 1.76%, Tata Power up by 1.16%, ITC up by 0.71%, Tata Steel up by 0.53% and Maruti Suzuki up by 0.45%. On the flip side, Gail India was down by 2.74%, Hero MotoCorp was down by 1.94%, BHEL was down by 1.93%, Mahindra & Mahindra was down by 1.88% and Dr Reddys Lab was down by 1.78% were the top losers on the Sensex.

Meanwhile, in order to attract road developers and to revive highway sector, the Cabinet Committee on Economic Affairs (CCEA) approved a proposal for allowing companies to exit projects harmoniously without attracting punitive measures. The move will help to expedite implementation of road infrastructure in the country and insulate the NHAI from heavy financial claims and unnecessary disputes.

The CCEA said that to bring about required flexibility for existing concessionaires in terms of exit options, existing concessionaires both in case of completed and on-going projects are now permitted to divest their equity in totality. Subsequent to the substitution, the leading substituting entity shall require to maintain at least 51 percent equity holding in project special purpose vehicle (SPV). The mechanism of project implementation would include lender's representative in consultation with the concessionaire to invite, negotiate and procure offers either by private negotiations or public auction or tenders, for the takeover and transfer of the Project Highway.

The decision is taken in the view of declining interest among bidders for highway projects under the public-private-partnership mode and difficulties faced in achieving financial closure for such projects awarded in the recent past. Presently, a large number of highway projects including 20 major projects involving investment of Rs 27,000 crore are stalled owing to various hurdles like environment clearance.  Further, there was also a need to relax exit norms as many investment companies with sufficient resources have shown interest to acquire road projects, but are either unable or unwilling to take up due to the construction risks. 

The CNX Nifty is currently trading at 5,625.10 down by 42.55 points or 0.75% after trading in a range of 5,640.00 and 5,606.80. There were 9 stocks advancing against 41 declines on the index.

The top gainers of the Nifty were Tata Power up by 1.23%, Hindalco Industries up by 1.22%, Lupin up by 0.97%, Bank of Baroda up by 0.87% and ITC up by 0.85%. On the flip side, JP Associate down by 7.63%, Ranbaxy down by 4.93%, BPCL down by 3.10%, Cairn down by 2.79%, and Kotak Bank down by 2.75% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite tumbled 62.32 points or 3.01% to 2,010.77, Hang Seng declined 297.64 points or 1.47% to 19,965.67, Jakarta Composite slipped 14.60 points or 0.32% to 4,500.77, KLSE Composite dropped 9.72 points or 0.55% to 1,746.13, Nikkei 225 contracted 60.51 points or 0.46% to 13,169.62, Straits Times decreased 23.47 points or 0.75% to 3,100.98, KOSPI Composite dropped 5.97 points or 0.33% to 1,816.86 and

On the flip side, Taiwan Weighted was down by 3.29 points or 0.04% to 7,790.02.