Benchmarks bounce back from the lows; IT, TECK lead

Indian equity markets pared losses in the late afternoon session on account of value buying in beaten down fundamental counters and gained quite a bit of ground, however, continued to trade below the previous day's close. The sentiment were pessimistic from the early trade as rupee inexorably slide to historic lows of ‘68/$’ and on growing concerns over increase in government's subsidy burden following the passage of the food security bill. Caution prevailed after global rating agency Standard & Poor’s (S&P) stated that countries with the largest deficits - India and Indonesia - would face hardships in the near term. Traders were seen piling position in IT, TECK and Metal stocks while selling was witnessed in PSU, Realty and Bankex sector stocks. In scrip specific development, BHEL was trading under pressure for second consecutive session after foreign brokerage firm Credit Suisse assigned underperform rating on the stock. Strides Arcolab was trading in green after Foreign Investment Promotion Board (FIPB) cleared US-based Mylan’s Rs 5,168 crore proposal to acquire Agila Specialties- a subsidiary of pharma firm Strides Acrolab. The market may remain volatile in the near term as traders may roll over positions in the futures & options (F&O) segment from the current month i.e. August 2013 series to next month i.e. September 2013 series. The near month August 2013 derivatives contract will expire tomorrow i.e. August 29, 2013.

On the global front, all the Asian markets were trading in red barring Jakarta Composite and Taiwan Weighted while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,250 and 17,900 levels respectively. The market breadth on BSE was negative in the ratio of 602:1410, while 117 scrips remain unchanged. 

The BSE Sensex is currently trading at 17847.39, down by 120.69 points or 0.67% after trading in a range of 17902.51 and 17448.71. There were only 13 stocks advancing against 17 declines on the index.

The broader indices were too trading in red; the BSE Mid and Small cap indices were trading down by 1.62% and 1.21% respectively.

The top gaining sectoral indices on the BSE were, IT up by 2.17%, TECK up by 1.17% and Metal up 0.17%. While, PSU down by 3.32%, Realty down by 2.69%, Bankex down by 2.11%, Oil and Gas down by 1.92% and Consumer Durables down by 1.77% were the top losers indices on the BSE.

The top gainers on the Sensex were, Tata Power up by 3.55%, TCS up by 3.21%, Wipro up by 2.76%, Jindal Steel up by 2.33% and NTPC up by 1.65%. On the flip side, ONGC down by 7.93%, HDFC down by 6.57%, Gail India down by 4.04%, Coal India down by 4.02% and Bharti Airtel down by 2.45% were the top losers on the Sensex.

Meanwhile, in order to boost business sentiments in a slowing economy, the Cabinet Committee on Investment (CCI) has cleared infrastructure projects worth Rs 1.83 lakh crore including 18 power projects that were stuck due to delay in clearance. The 18 power projects worth Rs 83,773 crore, which were stuck due to lack of fuel linkages, will sign coal supply agreements with Coal India by September 6.

The banks have already disbursed as much as Rs 30,000 crore for these power sector projects. Besides this, the CCI cleared hurdles for projects like Reliance Power's 4,000 MW ultra mega power project at Sasan in Madhya Pradesh, L&T's Metro Rail project in Hyderabad, Essar Power's Jharkhand project and Hindalco Industries project. The Cabinet Committee on Investment (CCI) has also set a 60- day deadline for ministries to clear various infrastructure projects in the power, coal and highways sectors.

Country’s infrastructure development is crucial to boost the economy’s growth and thus the government has recently set up the Cabinet Committee on Investments (CCI) to clear the bottlenecks holding back mega infrastructure projects. For the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector. Further, in order to speed up the implementation of infrastructure projects, the government has also set up special cell, special project monitoring group, which is meant to supplement CCI's efforts and has been tasked with monitoring the progress of projects cleared by CCI.

The CNX Nifty is currently trading at 5,242.05, down by 45.40 points or 0.86% after trading in a range of 5,256.95 and 5,118.85. There were 17 stocks advancing against 33 declines on the index.

The top gainers of the Nifty were Ranbaxy Laboratories up by 6.70%, Cairn India up by 6.12%, TCS up by 3.28%, Tata Power up by 3.22% and HCL Technologies up by 2.61%. On the flip side, ONGC down by 7.89%, Axis Bank down by 6.93%, BPCL down by 6.91%, HDFC down by 6.47% and Ultratech Cement down by 5.85% were the major losers on the index.

The Asian equity indices were trading in mixed; Straits Times down by 1.08%, KLSE Composite down by 0.70%, Seoul Composite down by 0.07%, Hang Seng down by 1.60%, Nikkei 225 down by 1.51% and Shanghai Composite down 0.11% while Jakarta Composite was up 1.12% and Taiwan Weighted up by 0.05%.

The European markets were trading in red; France’s CAC 40 was down 0.05%, Germany’s DAX slipped 0.44% and UK’s FTSE 100 dropped 0.33%.