FLAT TRADE

The Indian equity markets have made a positive start tracking firm Asian counterparts but, benchmarks reversed their direction soon after initial gains and are trading flat at the moment. The US markets continued their decline overnight on getting weak economic reports while, all the Asian indices were trading in the positive terrain at this point of time. Back home, on the sectoral front fast moving consumer goods gauge was witnessing the maximum gain in trade followed by capital goods and software sector undertaking while, auto, public sector undertaking and banking stocks remained the top losers on the BSE sectoral space. However, the broader indices were trading in the red at this point of time. Index heavyweight Reliance Industries (RIL) extended two-day fall while State Bank of India extended its previous session decline triggered by poor earnings moreover, PSU oil marketing companies viz., BPCL, HPCL and IOC all were trading with a cut in a range of 2-3 percent in the trade after a positive start. The market breadth on the BSE turned negative; there were 720 shares on the gaining side against 801 shares on the losing side while 71 shares remained unchanged.

The BSE Sensex opened at 18,177.32; about 40 points higher as compared to its previous closing of 18,137.35, and has touched a high and a low of 18,218.20 and 18,114.79, respectively. The index is currently trading at 18,145.88, up by 8.53 points or 0.05%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a negative start with 45.23% stocks advancing against 50.31% declines. The broader indices were trading in the red; the BSE Mid cap and Small cap indices were down by 0.18% and 0.01% respectively. 

The top gaining sectoral indices on the BSE were, FMCG up by 0.67%, CG up by 0.67%, IT up by 0.48%, TECk up by 0.44% and Power was up by 0.15%. While, Auto down by 0.81%, PSU down by 0.79%, Bankex down by 0.65%, Oil and Gas down by 0.54% and Realty down by 0.53% were the top losers on the index.

The top gainers on the Sensex were HDFC up by 1.10%, ITC up by 1.01%, L&T up by 0.86%, TCS up by 0.81% and ONGC was up by 0.76%.

On the flip side, Tata Motors down by 1.94%, SBI down by 1.83%, Maruti Suzuki down by 1.29%, RIL down by 0.83% and Tata Steel down by 0.79% were the top losers on the index.

Meanwhile, the Ministry of Finance is planning to set guidelines on the Infrastructure Debt Fund by end of this June. This Infra Debt fund will help to finance the core sector to sustain high economic growth. The Infra Debt Funds are planned to be structured either as a trust or a company, depending upon the nature they would be regulated either by RBI or SEBI.

Department of Economic Affairs' secretary is scheduled to meet all the stakeholders including the central bank RBI, market regulator SEBI and insurance sector watchdog IDRA to discuss the guidelines and the Capital Adequacy Ratio for the companies to be helped also the exposure limits. Matters connecting to regulators, possible debt seekers, and credit rating may also come up in the meeting.

The ministry of finance is of the view that instead of an owned funds for the infra investment, it should be pooled funds, as discussed in internal meeting. Since both companies and trust might be allowed in this space, they would issue bonds and units accordingly & SEBI can regulate companies and RBI can regulate trust.

In this year's union budget, Finance Minister Pranab Mukherjee had announced setting up the funds through special purpose vehicles for attracting foreign investment in the infrastructure sector. In his Budget speech FM said "To attract foreign funds for financing of infrastructure, I propose to create special vehicles in the form of notified infrastructure debt funds,"

Recently, planning commission deputy chief, Montek Singh Ahluwalia had said, "India needs $1 trillion investment in infrastructure creation to continue to grow at 9% over the next five year".

The Finance Ministry and Planning Commission is planning to invest $1trillion in creation of ports, highways, power utilities and telecom infrastructure in next Five Year Plan starting from 2013. An inclusive policy framework for PPP in building Physical infra and social sectors such as health and education is on the list. It will place guidelines for the entry of private players and implementation of infrastructure projects.

The S&P CNX Nifty opened at 5,448.20; about 10 points higher compared to its previous closing of 5,438.95, and has touched a high and a low of 5,460.50 and 5,429.65 respectively. The index is currently trading at 5,435.20, lower by 3.75 points or 0.07%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were HDFC up by 1.01%, TCS up by 0.94%, Wipro up by 0.94%, ITC up by 0.90% and BHEL up by 0.89%.

SAIL down by 2.24%, Tata Motors down by 2.12%, SBI down by 1.97%, Ranbaxy down by 1.62% and Maruti was down by 1.41%, were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up 20.68 points or 0.72% to 2,873.45, Hang Seng was up 115.66 points or 0.51% to 23,016.74, Jakarta Composite was up 26.49 points or 0.70% to 3,825.71, KLSE Composite was up 2.44 points or 0.16% to 1,538.71, Nikkei 225 was up 98.51 points or 1.03% to 9,665.53, Straits Times was up 5.08 points or 0.16% to 3,141.56, Seoul Composite was up 27.65 points or 1.32% to 2,130.06 and Taiwan Weighted was up 24.57 points or 0.28% to 8,908.66.