Benchmarks continue firm trade; Realty, IT lead

Indian equities continued firm trade in the late afternoon session on account of buying in front line counters and taking cues from global counterparts. The sentiments were on positive mood from the early trade after House Republican leaders in US proposed a temporary extension of the nation’s debt ceiling. The mood was also buoyant after Finance Minister P Chidambaram stated that he is confident that Indian economy will soon regain its momentum and grow at over 5% and perhaps closer to 5.5% in fiscal 2013-14 despite predictions to the contrary. Traders were seen piling positions in Realty, IT and Capital Goods stocks, while selling was witnessed in Metal, FMCG and Health Care sector stocks. Realty stocks gained ground after market watchdog Securities and Exchange Board of India (SEBI) has issued draft guidelines to set up Real Estate Investment Trusts (REITs) in India, which could open up new funding channels for real estate assets in the country. In scrip specific development, Infosys was trading firm after the company revised guidance for the year upwards to 9-10% for the 2013-14 fiscal from 6-10% earlier, while just reporting marginal 1.6% rise in consolidated net profit to Rs 2,407 crore for the second quarter ended September 30, 2013, on back of large deals and increased sales. Ranbaxy Laboratories was trading in green after the company got the US Food and Drug Administration (USFDA) approval for manufacturing practices for its US facility Ohm Laboratories.

On the global front, the Asian markets were trading in green while the European markets were trading on a mixed note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,050 and 20,400 levels respectively. The market breadth on BSE was positive in the ratio of 1233:1043 while 152 scrips remained unchanged.  

The BSE Sensex is currently trading at 20495.26, up by 222.35 points or 1.10% after trading in a range of 20559.69 and 20368.06. There were only 21 stocks advancing against 9 declines on the index.

The broader indices were too trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.52% and 0.46% respectively.

The gaining sectoral indices on the BSE were Realty up by 3.18%, IT up by 2.91%, Capital Goods (CG) up by 2.77%, Bankex up by 2.61% and TECK up by 2.39%. While, Metal down by 1.11%, Fast Moving Consumer Goods (FMCG) down by 1.00%, Health Care (HC) down by 0.92%, Power down by 0.81% and Consumer Durables (CD) down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 4.69%, Infosys up by 4.48%, L&T up by 4.13%, Tata Motors up by 4.10% and Maruti Suzuki up by 2.71%. On the flip side, Coal India down by 3.49%, Tata Power down by 2.50%, NTPC down by 2.03%, Hindalco Industries down by 1.92% and Sun Pharma down by 1.85% were the top losers on the Sensex.

Meanwhile, in order to revive country’s highway sector and to attract more road developers, the government has set up a committee headed by chairman of the PM's economic advisory council, C Rangarajan to decide all terms and conditions of the bailout policy for the road developers. The proposed committee is expected to make its recommendations within one month and around 40 stalled projects that were awarded after April 2010 will be reviewed under this bailout policy.

Meanwhile, Indian highway sector has been facing a series of concerns since 2012-13 and multiple road projects have failed to take-off. So far this fiscal, the National Highways Authority of India (NHAI) managed to award only 479 kms as compared to the set target of 3,000 kms by September 2013. Further, the previous financial year proved to be the worst year for the highway sector as NHAI awarded only 1,116-km road projects against the target of 9,500-km.

the government is taking measures to revive the growth in highway road projects in the country and has recently approved highways ministry's premium deferral proposal that all highway projects be considered for premium restructuring except 23 premium-based projects selected earlier. Highways ministry hopes that the policy will instill confidence among lenders and attract more financing for the sector. Further, under this policy, the highway authority can extend this rescue-measure to projects that are found to be under financial stress. The government while approving the premium deferral proposal, noted that road developers should now pay a discount rate of 12% on the premium payment and also pay a penalty of up to 0.5% of the total project cost in case of default on their part. Moreover, if toll revenues turn out to be more than projected, the money left after servicing debt and other necessary costs would go to NHAI as advance payment.

The CNX Nifty is currently trading at 6,085.90, up by 64.95 points or 1.08% after trading in a range of 6,107.60 and 6,046.40. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were ICICI Bank up by 4.74% DLF up by 4.62%, Infosys up by 4.51%, Bank of Baroda up by 4.31% and L&T up by 4.13%. On the flip side, Coal India down by 3.52%, Tata Power down by 2.39%, NTPC down by 2.37%, Sun Pharma down by 2.06% and SSLT down by 1.98% were the major losers on the index.

The Asian equity indices were trading in Green; Jakarta Composite up by 0.59%, Straits Times up by 0.55%, Nikkei 225 up by 1.48%, KLSE Composite up by 0.58%, Hang Seng up by 1.16%, Taiwan Weighted up by 0.06%, Seoul Composite up by 1.17%, and Shanghai Composite up by 1.70%.

The European markets were trading on a mixed note; France’s CAC 40 was down 0.02%, Germany’s DAX added 0.47% and UK’s FTSE 100 gained 0.61%.