Benchmarks continue to reel under selling pressure in noon deals

Indian equity benchmarks continued to trade lower in noon deals amid sluggish global cues. Most of the Asian equity benchmarks were trading in the red at this point of time as sentiments remained subdued amid renewed concerns about the outlook for the US Federal Reserve’s monetary stimulus plan. Weak opening in European markets too dampening the sentiments with CAC, DAX and FTSE all were trading in the red in early deals. Back home, investors opted to remain sidelines on taking any positions in risky assets as it being a penultimate day of September F&O expiry. Sentiments also remained down-beat as banking counters continue to trade under pressure on fourth day in a row on expectation of further hike in repo rate by Reserve Bank of India.

Meanwhile, public sector oil marketing companies (OMCs) edged lower after the Minister of Petoleum & Natural Gas M Veerappa Moily on September 24, 2013, ruled out any steep increase in diesel and cooking-fuel prices. Bucking the trend, shares of some power generation firms rose after the Cabinet Committee on Economic Affairs approved the methodology for auctioning coal blocks, enabling the government to allot coal mining licences through competitive bidding to private companies.

On the sectoral front, capital goods witnessed the maximum gain in trade followed by power and healthcare, while banking, oil and gas and fast moving consumer goods remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1179:791; while 138 shares remained unchanged.

The BSE Sensex is currently trading at 19742.36 down by 177.85 points or 0.89% after trading in a range of 19978.49 and 19676.85. There were only 16 stocks advancing against 14 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.62%, while Small cap index down by 0.19%.

The top gaining sectoral indices on the BSE was Capital Goods up by 0.67%, Power up by 0.24%, Health Care up by 0.24% and PSU up by 0.15%. While Bankex down by 1.87%, Oil & Gas down by 1.68%, FMCG  down by 1.47%, Realty down by 1.43%  and Consumer Durables down by 0.74% remained the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 4.19%, Tata Motors up by 2.36%, ONGC up by 1.04%, Coal India up by 0.84% and Bharti Airtel up by 0.83%. On the flip side, Mahindra & Mahindra down by 3.20%, HDFC Bank down by 3.14%, RIL down by 2.93%, ITC down by 2.30% and ICICI Bank down by 2.14% were the top 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 5,834.30 down by 58.15 points or 0.99% after trading in a range of 5,910.55 and 5,813.60. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were BHEL up by 4.65%, Tata Motors up by 2.60%, Coal India up by 1.36%, Bharti Airtel up by 1.03% and SBI up by 0.99%. On the flip side, BPCL down by 4.61%, M&M down by 3.01%, IDFC down by 2.99%, Reliance Industries down by 2.97% and HDFC Bank down by 2.88% were the major losers on the index.

Most of the Asian equity indices were trading in red; Jakarta Composite down by 1.79%, KLSE Composite down by 0.46%, Nikki 225 down by 0.76%, Shanghai Composite down by 0.59%, Seoul Composite down by 0.45% and Taiwan Weighted down by 0.18%.  While, Hang Seng up by 0.03% was the only gainer.

 All the European markets were trading in red; France’s CAC 40 was down 0.32%, UK’s FTSE 100 dropped 0.22% and Germany’s DAX down by 0.28%.