Markets extend losses in afternoon session; trade at intra-day low level

Indian equity benchmarks extended losses and lurched around intra-day low levels in the afternoon session amid selling in blue chip stocks such as Reliance, HDFC Bank and ITC. Further, weak global cues also affected investors’ sentiments as the Asian indices too were trading in the red. On sector specific movement, buying was witnessed only in capital goods stocks, while FMCG and bankex stocks were trading lower by over 1.5 percent. Power generation stocks will remain in focus as the government has approved the methodology for auctioning coal blocks, enabling the government to allot coal mining licences through competitive bidding for the first time. On stock specific movement, BHEL, Tata Motors and ONGC were trading up by over 1.5 percent; while, HDFC Bank, M&M and ITC were trading lower by over 3 percent on BSE.

On global front, Asian equity indices were trading in red with Japanese index Nikki down by 0.26 % as concerns over the uncertainty about the Federal Reserve's policy outlook left investors cautious to take aggressive positions. Back home, the market breadth remained negative, out of 1,926 stocks traded, 754 stocks advanced, while 1048 stocks declined on the BSE.        

The BSE Sensex is currently trading at 19,701.87 down by 218.34 points or 1.10% after trading in a range of 19,978.49 and 19,701.76. There were only 11 stocks advancing against 19 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.60%, while Small cap index down by 0.14%.

The only gaining sectoral indice on the BSE was Capital Goods up by 0.56%. While FMCG down by 2.08%, Bankex down by 1.67%, Oil and Gas down by 1.53% and Consumer Durables down by 1.13% remained the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.69%, Tata Motors up by 2.26%, ONGC up by 1.73%, Bharti Airtel up by 1.26% and Hero Moto Corp up by 0.65%. On the flip side, HDFC Bank down by 3.57%, M&M down by 3.16%, ITC down by 3.02%, Reliance down by 2.83% and HDFC down by 1.76% were the only losers on the Sensex.

Meanwhile, in a move to boost the infrastructure development in the country, the Department of Economic Affairs (DEA) Secretary Arvind Mayaram has said that the government is working on various steps, including deepening of the bond market and setting up of a fund, to promote debt and equity investment in the infrastructure sector. By adding further, mayaram said that on equity front, the government will come up with Infrastructure Trust Fund (ITF) within two months, while, on debt side the government is making efforts to develop the corporate bond market and encourage Employees Provident Fund Organisation (EPFO) to invest in infrastructure projects. In the coming month there will be greater deepening of the equity and bond markets for financing the country’s infrastructure sector, he added.

Referring to Infrastructure Trust Fund (ITF), Mayaram said under the ITF structure underlying revenue of a project will be transferred to a trust which will issue units to investors, including foreign investors who want to buy the units. DEA Secretary also expressed the need to encourage overseas pension funds and sovereign wealth funds (SWFs) to make investment in infrastructure projects and once they make investment, Indian investors would also follow suit. On Infrastructure Debt Fund (IDF), Mayarm added that the government is working with the Reserve Bank to make an appropriate shift towards Infrastructure Debt Fund (IDF) under which loans given by banks would not be treated as restructuring of debt. Under IDFs framework, the interest rate should come down as the construction risk has already been borne by the banks. Further, he added that the term of IDFs should be stretched for 15-20 years to attract long-term pension funds or sovereign wealth funds.

The government has identified the development of infrastructure a most critical prerequisite to boost the economy’s growth. For the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector.

The CNX Nifty is currently trading at 5,819.10 down by 73.35 points or 1.24% after trading in a range of 5,910.55 and 5,813.60. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were BHEL up by 4.04%, Tata Motors up by 2.25%, ONGC up by 1.51%, Bharti Airtel up by 1.18% and Hero Moto Corp up by 0.75%. On the flip side, BPCL down by 4.23%, HDFC Bank down by 3.68%, M&M down by 3.21%, IDFC down by 2.99% and Reliance down by 2.84% were the major losers on the index.

The Asian equity indices were trading in red; Straits Times down by 0.08%, Jakarta Composite down by 1.50%, KLSE Composite down by 0.40%, Nikki 225 down by 0.76%, Shanghai Composite down by 0.28%, Seoul Composite down by 0.45% and Taiwan Weighted down by 0.18%.  While, Hang Seng up by 0.07% was the only gainer.