Benchmarks trade flat in morning deals

Indian equity benchmarks erased initial losses and were trading flat in morning deals, as persistent selling by foreign institutional investors (FIIs) and dull Q2 earnings dampened the sentiment on Dalal Street. Traders remained cautious as Member of Economic Advisory Council to the Prime Minister (EAC-PM) Sanjeev Sanyal stated that artificial intelligence (AI) will both create and destroy jobs and a lot depends on how it is adopted. He claimed AI will impact highly skilled people and functions will be disintermediated. However, traders took support with survey showing that growth in India's business activity picked up slightly in October after softening last month, led by stronger demand in the manufacturing sector. It also showed job creation rose at the fastest pace since February 2006. HSBC's flash India Composite Purchasing Managers' Index, compiled by S&P Global, rose to 58.6 this month from September's final reading of 58.3, which was a 10-month low. Meanwhile, India has imposed anti-dumping duty on five Chinese goods, including glass mirror and cellophane transparent film, for five years to guard domestic players from cheap imports from the neighbouring country. These duties were imposed as these products -- isopropyl alcohol, sulphur black, cellophane transparent film, thermoplastic polyurethane, unframed glass mirror -- were exported to India from China at below normal prices. On the global front, Asian markets are trading mostly in red as traders react to rising bond yields and amid bets the US Fed will take a more measured approach on interest rate cuts. The continued tension in the Middle East is also weighing on the markets.

The BSE Sensex is currently trading at 80077.07, down by 4.91 points or 0.01% after trading in a range of 79813.02 and 80259.82. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.38%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Utilities up by 0.98%, PSU up by 0.95%, Power up by 0.87%, Consumer Durables up by 0.67% and Bankex up by 0.61%, while FMCG down by 1.77%, TECK down by 0.68%, Telecom down by 0.55%, IT down by 0.48% and Metal down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.31%, Ultratech Cement up by 1.30%, Bajaj Finance up by 1.12%, Power Grid Corporation up by 0.99% and NTPC up by 0.92%. On the flip side, Hindustan Unilever down by 5.61%, Nestle down by 2.02%, Bharti Airtel down by 1.16%, Maruti Suzuki down by 1.00% and ITC down by 0.94% were the top losers.

Meanwhile, Union minister Nitin Gadkari has said the government has decided to double the 'defect liability period' to 10 years for contractors of engineering, procurement and construction (EPC) projects. Currently, under EPC projects, the responsibility for maintenance of national highways lies with the government after the defect liability period (5 years) is over.

Gadkari said ‘The quality of roads built under EPC mode is not good. The defect liability period under EPC mode is 5 years... and within 3 years, there are lots of problems on roads.’ He noted that the roads built under BOT (build-operate-transfer) or HAM (Hybrid Annuity Model) mode are in good condition because the responsibility of maintenance of roads lies with the contractor and he has to pay the price.

He stated that increasing the defect liability period for contractors will force them to make good quality roads. EPC projects are the ones where the government pumps in money, while the private partners only provide engineering construction assistance. The HAM model of road construction is where the government partially funds the construction of national highways and BOT or build-operate-transfer is where the construction risk is borne by the private concessionaire with a concession period of 20-30 years.

National Highways Authority of India (NHAI) and National Highways and Infrastructure Development Corporation (NHIDCL) are mainly responsible for the construction of National Highways and Expressways in the country. Maintenance of National Highways is financed by the Central Road Infrastructure Fund.

The CNX Nifty is currently trading at 24431.75, down by 3.75 points or 0.02% after trading in a range of 24341.20 and 24480.65. There were 28 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.24%, Coal India up by 1.79%, Ultratech Cement up by 1.47%, HDFC Bank up by 1.37% and Bharat Electronics up by 1.25%. On the flip side, Hindustan Unilever down by 5.59%, SBI Life Insurance down by 4.77%, Hindalco down by 4.56%, Nestle down by 2.02% and Bajaj Auto down by 1.41% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 78.38 points or 0.21% to 38,026.48, Taiwan Weighted lost 116.6 points or 0.5% to 23,218.16, Hang Seng declined 205.11 points or 1% to 20,555.04, KOSPI dropped 10.72 points or 0.41% to 2,588.90, Jakarta Composite plunged 25.57 points or 0.33% to 7,762.00 and Shanghai Composite weakened 16.63 points or 0.51% to 3,286.17.

On the flip side, Straits Times rose 19.54 points or 0.54% to 3,620.32.