Benchmarks trade flat ahead of WPI data

Indian equity benchmarks are exhibiting consolidation with fronting gauges trading mostly unchanged in early deals on Monday, after witnessing four consecutive days of fall. Though, investors are trading cautiously ahead of Reserve Bank of India's monetary policy and US Federal Reserve’s meeting outcome later this week for the further direction. Traders were also awaiting WPI inflation numbers to be announced later in the day, as it will have a major bearing on RBI policy meet on December 18 after the CPI surged to a nine-month high of 11.24 percent in November.

Global cues too remained choppy with the US markets ending flat in last session but the traders remained concerned about the Fed’s probable tapering announcement in its upcoming policy meeting, there was some profit booking too that kept the markets in check. Moreover, all the Asian equity benchmarks were trading lower at this point of time with Japanese stock market drifting lower, despite the Bank of Japan’s Tankan survey showing an improvement in Japanese big manufacturers’ business confidence over the three months to December.

Back home, some cautiousness also crept-in as the foreign direct investment (FDI) inflows into the services sector declined by about 62 percent year-on-year to $1.36 billion during April-October of the ongoing fiscal. However, the losses remained capped on report that the government has put on the fast track projects worth Rs 34,647 crore in petroleum and natural gas and power sectors by approving a number of them and giving directions for urgent clearances to the rest. On the sectoral front, software witnessed the maximum gain in trade followed by consumer durables and technology, while oil and gas, auto and metal remained the top losers on the BSE sectoral space. The broader indices, however, outperforming benchmarks, while the market breadth on the BSE was positive; there were 689 shares on the gaining side against 494 shares on the losing side while 55 shares remain unchanged.

The BSE Sensex opened at 20714.26; about 1 point lower compared to its previous closing of 20715.58, and has touched a high and a low of 20764.52 and 20667.02 respectively. The index is currently trading at 20716.66, up by 1.08 points or 0.01%. There were 9 stocks advancing against 21 declines on the index.

The overall market breadth has made a strong start with 54.47% stocks advancing against 41.27% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices were up by up by 0.29% and 0.40% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 1.03%, Healthcare up by 0.94%, Consumer Durables up by 0.91%, Teck up by 0.89% and Capital Goods up by 0.35%, while Oil & Gas down by 0.62%, Auto down by 0.49%, Metal down by 0.40%, FMCG down by 0.32% and PSU down by 0.14% were the top losers on the sectoral index.

The top gainers on the Sensex were Infosys up by 1.73%, ICICI Bank up by 1.04%, TCS up by 1.00%, SSLT up by 0.78% and SBI up by 0.51%. On the flip side, Jindal Steel was down by 1.92%, Hindalco Industries was down by 1.43%, Hero MotoCorp was down by 1.14%, Tata Power was down by 0.92% and Tata Motors was down by 0.88% were the top losers on the Sensex.

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 opened at 6,168.35; lower by 0.05 points as compared to its previous closing of 6,168.40, and has touched a high and a low of 6,183.25 and 6,152.90 respectively. The index is currently trading at 6,168.95, up by 0.55 points or 0.01%. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Infosys up by 1.81%, IDFC up by 1.69%, Axis Bank up by 1.41%, Power Grid up by 1.08% and ICICI Bank up by 0.99%. On the flip side, Jindal Steel down by 1.85%, NMDC down by 1.77%, Ambuja Cements down by 1.76%, BPCL down by 1.72% and UltraTech Cement down by 1.32% were the major losers on the index.

The Asian equity indices were trading in red; Shanghai Composite declined 31.33 points or 1.43% to 2,164.75, Hang Seng dropped 163.22 points or 0.70% to 23,082.74, Jakarta Composite shed 51.47 points or 1.23% to 4,123.36, KLSE Composite slipped 4.86 points or 0.26% to 1,835.49, Nikkei 225 decreased 195.10 points or 1.27% to 15,208.01, Straits Times dipped 11.39 points or 0.37% to 3,054.63, Seoul Composite contracted 0.44 points or 0.02% to 1,962.47 and Taiwan Weighted was down by 40.74 points or 0.49% to 8,336.20.