Markets trade with traction tracking firm cues from Asian markets

Extending their northward journey for the third straight session, Indian equity benchmarks having made a gap up opening are trading in the green in early deals with a gains of around half a percent, tracking firm cues from Asian markets. Sentiments remained jubilant on report that India’s current account deficit (CAD) coming sharply lower at a four-year low to $4.2 billion or 0.9% of GDP in December quarter of 2013-14. The lower CAD was primarily on account of a decline in the trade deficit as merchandise exports picked up and imports moderated, particularly gold imports. Sentiments also remained up-beat after planning commission Deputy Chairman Montek Singh Ahluwalia said that the new government will need to revive investments and push infrastructure projects within the three months of being elected to bring economic growth back on track.

On the global front, overnight the US markets made a flat closing with traders taking a breather after a big rally and uncertainty about the near-term outlook for the markets ahead of Friday’s monthly jobs report. Asian markets were trading mostly in the green at this point of time led by the Japanese market after a Pension Fund report.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. On the sectoral front, all the sectoral indices on the BSE were trading in the green with realty, power and oil and gas segments gaining the most. Capital goods, metal, banking, healthcare and technology too were trading with significant gains. The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 1,105 shares on the gaining side against 447 shares on the losing side while 74 shares remain unchanged.

The BSE Sensex opened at 21336.32; about 59 points higher compared to its previous closing of 21276.86, and touched a high and a low of 21382.49 and 21329.88 respectively. The index is currently trading at 21369.18, up by 92.32 points or 0.43%. There were 25 stocks advancing against 5 declines on the index.

The overall market breadth has made a strong start with 67.83% stocks advancing against 27.78% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.84% and Small cap gained 0.85%. 

The top gaining sectoral indices on the BSE were, Realty up by 1.70%, Power up by 1.52%, Oil & Gas up by 1.08%, PSU up by 1.04% and Capital Goods up by 0.96%, while there were the no losers on the sectoral index.

The top gainers on the Sensex were Gail India up by 1.85%, Tata Power up by 1.68%, BHEL up by 1.65%, ONGC up by 1.50% and  ICICI Bank up by 1.38%. On the flip side, TCS was down by 0.45%, Tata Motors was down by 0.38%, Hindustan Unilever was down by 0.37%, ITC was down by 0.20% and Maruti Suzuki was down by 0.06% were the top losers on the Sensex.

Meanwhile, in a big sigh of relief for financially-stressed highway developers, the government has cleared a long awaiting bailout policy for financially-stressed developers which would also allow the developers to defer the premium that they have committed to pay the government.

As per the bailout policy, relief would be offered for highway developers through a mechanism called revenue shortfall loan under an article of the model concession agreement between developers and the government. Highway projects that are facing economic stress would now be eligible for this article which allows developers to reschedule the cash shortfall between necessary expenses and toll revenue in case of political events or default by the National Highway Authority of India (NHAI). Further, under this provision, the money that the developers need to pay the government would be considered as an expense.

The move is likely to benefit started highway projects facing difficulty in servicing debt. Now, the developers can service debt fully as it will be given priority over premium. Highway projects involving expansion from two lane to four lane are likely to benefit more as their debt servicing commences with tolling. On the other hand, projects involving expansion to six lane may not benefit so much owing to the fact that these projects have a moratorium period for servicing debt but toll collections commence from the beginning, thus, they would have to bring in equity on their own. Furthermore, debt flow to sector is also expected to improve as bankers will get more comfort and stressed projects could be prevented from turning into non-performing assets. 

The CNX Nifty opened at 6,344.75; about 16 point higher as compared to its previous closing of 6,328.65, and has touched a high and a low of 6,359.30 and 6,339.70 respectively. The index is currently trading at 6,356.55, up by 27.90 points or 0.44%. There were 47 stocks advancing against 7 declines on the index.

The top gainers of the Nifty were Ambuja Cements up by 2.27%, Gail up by 2.03%, Jindal Steel up by 1.78%, HCL Tech up by 1.72% and Tata Power up by 1.68%. On the flip side, TCS down by 0.54%, Tata Motors down by 0.51%, ITC down by 0.38%, Lupin down by 0.37% and Maruti Suzuki down by 0.28% were the top losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng increased 112.86 points or 0.50% to 22,692.64, Jakarta Composite added by 6.66 points or 0.14% to 4,665.83, KLSE Composite strengthened by 2.02 points or 0.11% to 1,831.13, Nikkei 225 soared 169.61 or 1.14% to 15,067.24, Straits Times rose by 12.21 points or 0.39% to 3,128.85 and Taiwan Weighted was up by 72.50 points or 0.84% to 8,705.43.

On the flip side, Shanghai Composite tumbled 2.03 points or 0.10% to 2,051.05 and KOSPI Composite was down by 0.28 points or 0.01% to 1,970.96.