Benchmark continue weak trade in late afternoon session

Indian equities continued weak trade in the late afternoon session on account of selling in front line counters taking cues from weak global counterparts. The sentiments were on pessimistic mood from the early trade on account of murky set of macro-economic data, which fuelled expectations that RBI would hike key interest rate by 25 basis points in upcoming monetary policy meet on December 18. On the macro-front, November Retail inflation jumped to nine-month high level at 11.24%, October IIP shrinking for the first time in four months, contracted by 1.8%. Traders were seen piling positions in Auto stocks, while selling was witnessed in Bankex, Capital Goods and Realty sector stocks. In scrip specific development, Bharti Airtel was trading in green after a foreign brokerage firm upgraded its rating on the stock to outperform from underperform.

On the global front, the Asian markets were trading mixed, while the European markets were too trading on a mixed note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,200 and 20,800 levels respectively. The market breadth on BSE was negative in the ratio of 747:1483 while 151 scrips remained unchanged.

The BSE Sensex is currently trading at 20746.39 down by 179.22 points or 0.86% after trading in a range of 20867.17 and 20715.50. There were only 8 stocks advancing against only 22 stocks declining on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.99% while Small cap index down by 0.56%.

The gaining sectoral indices on the BSE were Auto up by 0.05% while, Bankex down by 1.97%, Capital Goods down by 1.89%, Realty down by 1.66%, Power down by 1.63% and Consumer Durables down by 1.09% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.66%, Wipro up by 1.19%, Bharti Airtel up by 1.00%, Coal India up by 0.96% and Mahindra & Mahindra up by 0.66%. On the flip side, BHEL down by 3.78%, ICICI Bank down by 3.45%, Hero MotoCorp down by 2.56%, Gail India down by 2.49% and HDFC down by 2.24%.

Meanwhile, the Highway Ministry has accepted the formula proposed by a high-level panel for restructuring the annual premium owed to the government by developers of stressed road projects. Now, final report would be sent to finance ministry after receiving comments from various government departments include the National Highways Authority of India (NHAI), Department of Economic Affairs (DEA) and the Planning Commission. The panel, headed by PMEAC chairman C Rangarajan, was set up in November to decide the modalities of the premium rescheduling policy, whose final decision could be implemented by the highways ministry after the finance minister's approval.

As per the panel report, developers of stressed highway projects will have to pay 25% of the annual premium committed upfront for the first three years of the projects and would have to pay 50% thereafter. The report further added that if there is any cash surplus after debt servicing and meeting O&M expenses, then it would have to be paid too and developers must fulfill all their premium obligations three years before the contract expires. The discount rate for calculating the net present value would be 10.75%. For the four-laning projects, developers can avail the policy after commercial operations have begun and construction is complete. Meanwhile, in case of six-laning projects, developers can avail the policy during construction but would have to provide a construction milestone-linked bank guarantee for the premium deficit of 75% during this period.

The development of infrastructure is a most critical prerequisite to boost the economy’s growth and the ministry of road transport and highways is taking measures to revive the growth in highway road projects in the country. The government has also entered into the 'Public Private Partnership (PPP)' programme in order to bring adequate resources for setting up of a sound and efficient infrastructural base. Meanwhile, it has set the $1-trillion investment target for the infrastructure sector for the 12th Five Year Plan (2012-17).

The CNX Nifty is currently trading at 6,177.70 down by 59.35 points or 0.95% after trading in a range of 6,208.60 and 6,169.85. There were 9 stocks advancing against 41 declining on the index.

The top gainers of the Nifty were Tata Motors up by 2.68%, Wipro up by 1.17%, Bharti Airtel up by 0.97%, Coal India up by 0.89% and M&M up by 0.80%. On the flip side, JP Associate down by 4.61%, IndusInd Bank down by 4.55%, BHEL down by 3.88%, ICICI Bank down by 3.55% and Ultratech Cement down by 3.23% were the major losers on the index.

The Asian equity indices were trading mixed; Hang Seng up by 0.12%, Nikkei 225 up by 0.40%, Taiwan Weighted up by 0.19%, Straits Times up 0.22% and KLSE Composite up by 0.40%. While, Seoul Composite down by 0.26%, Jakarta Composite down by 1.03% and Shanghai Composite down by 0.31%.

The European markets were trading mixed; France’s CAC 40 was up 0.10%, Germany’s DAX added 0.12% and UK’s FTSE 100 lost 0.10%.