Local bourses turn red after a positive start

The Indian equity markets have turned negative after making a firm start tracking positive cues from global indices. The US markets moved higher on Friday while, most of the Asian counterparts were trading in the positive terrain at this point of time, indicating strong investors' sentiments. Back home, sustained selling witnessed in key heavyweights, pulled the market into the negative terrain after a firm start. The BSE's Sensex and NSE's Nifty were trading tad below their crucial 18,500 and 5,550 level. On the sectoral front metal witnessed the maximum gain in trade followed by fast moving consumer goods and realty while, banking, auto and software remained the top losers on the BSE sectoral space. Meanwhile, Paramount Printpackaging, the new listing was trading with a gain of about four percent in the trade. The broader indices were outperforming benchmarks. The market breadth has made a positive start; there were 875 shares on the gaining side against 743 shares on the losing side while 75 shares remained unchanged.

The BSE Sensex opened at 18,628.63; about 110 points higher compared to its previous closing of 18,518.81, and has touched a high and a low of 18,643.58 and 18,463.56 respectively.

The index is currently trading at 18,484.33, down by 34.48 points or 0.19%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a positive start with 51.68% stocks advancing against 43.89% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices up by 0.18% and 0.19% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 0.52%, FMCG up by 0.27%, Realty up by 0.24%, HC up by 0.12% and Power was up by 0.10%. While Bankex down by 0.69%, Auto down by 0.65%, IT down by 0.39%, TECk down by 0.13% and PSU down by 0.11% were the top losers on the index.

The top gainers on the Sensex were Tata Power up by 2.30%, Bharti Airtel up by 1.35%, Hindalco up by 1.31%, Sterlite Industries up by 0.89% and Reliance Infra was up by 0.87%.

On the flip side, Jaiprakash Associates down by 1.97%, Hero Honda down by 1.56%, HDFC Bank down by 1.22%, TCS down by 1.10% and Maruti Suzuki down by 1.09% were the top losers on the index.

Meanwhile, an empowered group of ministers (EGoM) on infrastructure has decided to award 95% of the road projects in the current year on build-operate-transfer (BOT) model which will ensure that the builder remains engaged with the projects for many years. It has decided that EPC (engineering, procurement and contract) deals wherein the developers only have to build roads for the government for a payment, after which their engagement ends, will be limited to 5% of the projects.

This policy shift however will be beneficial to bigger developers only as small developers lack the financial strength needed to undertake the projects on BOT and annuity basis. The returns on BOT projects are received through tolling of roads or annuity payments from the government, but the government is keener on the self-funding toll model, as the annuity payments have become a big drag on the budget in the recent years and is hence considering a cap on such payments. Also, EPC model is a big burden on the government because in case the cost estimates and design of the project changes midway, the government covers the costs and the model does not mandate the contractor to maintain the road which adds additional burden on the government. However, the projects on EPC basis will be a necessity in the naxal-affected areas because of security reasons and inability to toll roads.

As per the government proposed BOT projects, the deals which will be executed in partnership with the private sector, 60% will be toll-based while 35% will be compensated to the developer through annuity payments by the government. Hence, the government is aiming to award 7,300 km under the BOT (toll) category this fiscal, while only 1,000 km of projects will be awarded as a mix of annuity and engineering procurement and construction (EPC).

Meanwhile, the National Highways Authority of India (NHAI) recently awarded four projects worth Rs 5,527 crore last month to be built on build, operate and transfer (BOT) basis, out of six for which it had received bids beginning February last week.

The S&P CNX Nifty opened at 5,575.20; about 24 points higher compared to its previous closing of 5,551.45, and has touched a high and a low of 5,586.05 and 5,533.10 respectively.

The index is currently trading at 5,536.05, down by 15.40 points or 0.28%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Tata Power up by 1.99%, Ranbaxy up by 1.76%, GAIL up by 1.50%, Hindalco up by 1.19% and Cairn up by 1.19%.

JP Associates down by 2.31%, Maruti Suzuki down by 1.75%, TCS down by 1.66%, Hero Honda down by 1.62% and HUL was down by 1.27%, were the major losers on the index.

Asian markets were trading mostly in the green; Shanghai Composite was up 10.60 points or 0.37% to 2,874.48, Hang Seng was up 214.08 points or 0.92% to 23,373.22, KLSE Composite was up 2.68 points or 0.18% to 1,518.18, Straits Times was up 41.54 points or 1.34% to 3,141.06, Seoul Composite was up 6.80 points or 0.32% to 2,154.25 and Taiwan Weighted was up 85.47 points or 0.95% to 9,062.70.

On the flip side, Jakarta Composite was down 7.17 points or 0.19% to 3,791.39 and Nikkei 225 was down by 49.31 points or 0.50% to 9,809.89.

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