Indian equities trim gains but continue to trade in green

Indian equities trim gains but continued their firm trade in green in the late afternoon session. Sentiments got support from growing speculation that Greece's New Democracy party will come to a coalition agreement with the socialist Pasok party however; Spain's soaring government bond yields limited gains. Traders were seen piling up position in Oil & Gas, FMCG and Healthcare sector while selling was witnessed in Metal, Realty and IT sector. On the global front, the Asian markets were trading on a mix note while the European markets were also trading on mix note. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,000 and 16,700 levels respectively.

The BSE Sensex is currently trading at 16,752.19, up by 46.36 points or 0.28%. The index has touched a high 16,874.35 and low 16,681.89 of respectively. There were 19 stocks advancing against 11 declines on the index. The market breadth on BSE was negative in the ratio of 1080:1361 while 131 scrips remained unchanged.

The broader indices were trading on a negative note; the BSE Mid cap index declined 0.24% while Small cap index shed 0.12%.

On the BSE sectoral space Oil & Gas up 1.45%, FMCG up 1.25%, Healthcare up 0.52%, PSU up 0.40%, and Capital Goods up 0.15%  were the major gainers, while Metal down 0.65%, Realty down 0.61%, IT down 0.61% , TECk down 0.45% and  Bankex down 0.38%  were the major laggards in the space.

ITC up 2.28%, RIL up 1.71%, Cipla up 1.49%, ONGC up 1.48%, and Gail India up 1.28% were the major gainers on the Sensex, while Sterlite down 3.34%, Infosys down 1.82%, Tata Power down 1.68%, BHEL down 1.14%, and HDFC Bank down 0.71% were the major losers in the index.

Meanwhile, In a move that will give a big push to manufacturing sector, the Finance Ministry has approved the Department of Industrial Policy and Promotion’s (DIPP) proposal to offer 26% stake to the Japanese government in the $100 billion Delhi-Mumbai Industrial Corridor (DMIC) project. Along with the finance ministry, all other concerned ministries including the Labour Ministry have supported the DIPP’s proposal.

A commerce and industry ministry official said, ‘we have received comments from the Finance Ministry and they have supported the proposal. Soon we will move the final note for Cabinet Committee on Economic Affairs approval. We had moved the draft cabinet note in December 2011 itself.’

According to the draft cabinet note on the DMIC Development Corporation (DMICDC) re-structuring, 49% stake will be held by the government, 26% by the Japanese government and the state-run firms like Life Insurance Corporation, HUDCO and India Infrastructure Finance Company will hold 25%.

Japan, which has expressed keen interest in the DMIC project, proposes to invest $4.5 billion in the project, which will cover 1,483 km between Delhi and Mumbai, over the next 5 years. Further, the corporation will develop industrial enclaves next to the Delhi-Mumbai rail corridor adjoining seven states - Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.

Timely re-structuring would help in fast-tracking the ambitious project and DMICDC is a special purpose vehicle for the implementation of the DMIC project. It will run the trust fund into which the government, multilateral agencies and Japanese entities will invest to finance the project. Earlier in September 2011, the Cabinet had approved equity re-structuring of DMICDC and an expenditure of Rs 18,500 crore on development of infrastructure, thereby making DMICDC a deemed government company.

Conceptualized in 2006, the DMIC project is developed in collaboration with Japan as a manufacturing and trading hub, however till now Japanese participation did not involve any equity holding. The project intends to create globally competitive environment and latest infrastructure to start local commerce, improve foreign investment, create employment opportunities, boost exports and attain sustainable development.

 The S&P CNX Nifty is currently trading at 5,072.95, up by 8.70 points or 0.17% after trading as high as 5,108.80 and as low as 5,048.10. There were 25 stocks advancing against 25 declines on the index.

The top gainers on the Nifty were Ambuja up 2.73%, ITC up 1.89%, Siemens up 1.78%, GAIL up 1.71%, and Reliance up 1.62%. While Sesa Goa down 3.62 %, Sterlite down 2.98%, Bank of Baroda down 2.38%, Infosys down 1.89%, and Tata Power down 1.74% were the major losers on the index.

In the Asian space, Shanghai Composite declined 0.66%, Hang Seng slipped 0.06%, Nikkei 225 sank 0.75% and Taiwan Weighted eased 0.11%.

On the other hand, Jakarta Composite inched up 0.29%, KLSE Composite gained 0.59%, Straits Times Index climbed 0.45% and KOSPI Composite Index rose 0.01%.

The European markets were trading on mixed trend, CAC 40 down 0.09%, Germany’s DAX gained 0.05% and the United Kingdom’s FTSE 100 rose 0.56%.