Benchmarks gain strength after a flat start; Nifty surpasses 6,100 mark

After some initial jitters, Indian equity benchmarks have gained strength in morning deals with frontline gauges surpassing their crucial 20,600 (Sensex) and 6,100 (Nifty) bastions supported by buying in software and technology counters after upbeat results by bellwether Infosys last week. Some support also came in with Finance Minister P Chidambaram questioning IMF’s low growth projection of 3.8 percent for India for the current fiscal and said that the government will not hesitate to take difficult decisions to contain fiscal and current account deficits. However, gains on the up-side remained capped as investors remained on the sidelines ahead of Inflation data for September, as measured by the wholesale price index (WPI) and the consumer price index (CPI), are due to be released today.

On the global front, the US markets continued their northbound journey on Friday with major indices adding over half a percent on signs of progress toward resolving the fiscal crisis. However, most of the Asian equity markets were trading in the red at this point of time amid concerns about the political impasse in the U.S. on the debt ceiling issue. However, Chinese market was marginally in green despite the data showing China’s export growth unexpectedly fizzled in September.

Back home, some cautiousness also crept in on the back of lower than expected IIP numbers of August, which was announced late Friday and came at a meager 0.6% versus a robust 2.8% in July. Meanwhile, Indian rupee lost some ground in early deals ahead of the Thursday’s deadline for the US debt ceiling. On the sectoral front, software witnessed the maximum gain in trade followed by technology and banking, while power and metal remained the only losers on the BSE sectoral space. The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 785 shares on the gaining side against 385 shares on the losing side while 57 shares remain unchanged.

The BSE Sensex opened at 20534.61; about 6 points higher compared to its previous closing of 20528.59, and has touched a high and a low of 20645.94 and 20497.88 respectively. The index is currently trading at 20621.90, up by 93.31 points or 0.45%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a strong start with 57.81% stocks advancing against 36.06% declines. The broader indices were trading in green; the BSE Mid cap up by 0.80% and Small cap indices up by 0.62%. 

The top gaining sectoral indices on the BSE were, IT up by 1.55%, Teck up by 1.30%, Bankex up by 0.66%, Auto up by 0.64% and Capital Goods up by 0.57%, while Power down by 0.10% and Metal  down by 0.05%were the only losers on the sectoral index.

The top gainers on the Sensex were Wipro up by 3.01%, TCS up by 1.59%, Dr Reddys Lab up by 1.47%, Coal India up by 1.45% and Infosys up by 1.15%. On the flip side, BHEL was down by 1.50%, Hindalco Industries was down by 1.23%, Gail India was down by 0.89%, Jindal Steel was down by 0.87%  and NTPC was down by 0.66% 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.

Meanwhile, 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 opened at 6,093.00; about 3 points lower as compared to its previous closing of 6,096.20, and has touched a high and a low of 5,848.10 and 5,802.70 respectively.

The index is currently trading at 6,116.25, up by 20.05 points or 0.33%. There were 26 stocks advancing against 21 declines and 3 stocks remain unchanged on the index.

The top gainers of the Nifty were Wipro up by 2.97%, PNB up by 2.43%, Bank of Baroda up by 1.81%, TCS up by 1.76% and IndusInd Bank up by 1.52%. On the flip side, Asian Paint down by 2.78%, BHEL down by 1.19%, GAIL down by 1.13%, Jindal Steel down by 1.12% and DLF down by 1.10% were the major losers on the index.

Most of the Asian equity indices were trading in red; Straits Times declined 23.38 points or 0.74% to 3,156.33, Seoul Composite slipped 1.71 points or 0.08% to 2,023.19 and Taiwan Weighted was down by 61.70 points or 0.74% to 8,287.67.

On the flip side, Shanghai Composite rose 10.25 points or 0.46% to 2,238.39 and KLSE Composite was up by 0.20 points or 0.01% to 1,785.95.

Hong Kong, Indonesian and Japanese markets remained closed for the trade today for public holidays.