Markets pare early gains; RIL down 1%

Markets opened marginally higher with infrastructure stocks leading the gains after the government paved the way for easing the land acquisition Act for public-private partnership and rural infrastructure projects.

At 9:35AM, the 30-share Sensex was down 23 points at 27,372 and the 50-share Nifty was trading 6 points lower at 8,240.

Pushing the reform agenda further, the Union Cabinet on Monday paved the way for easing the land acquisition Act for public-private-partnership (PPP) and rural infrastructure projects by approving an ordinance to make amendments to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The ordinance does away with the requirement of written consent from 70 per cent of landowners and social impact assessment for PPP projects in the infrastructure and social infrastructure sectors. The Cabinet on Monday also approved an ordinance to amend various provisions in the law on arbitration.

Meanwhile, in its latest Financial stability Report (FSR) RBI has estimated the rate of inflation to stabilise around 6% in 2015 while raising concerns over the possibility of a financial contagion in the Indian banking system, lower revenue generation in the last fiscal and the growing preference among FIIs towards the debt market which makes the Indian economy more vulnerable to the global trends.

Foreign institutional investors were net sellers in Indian equities worth Rs 204.22 crore on Monday, as per provisional stock exchange data.

Asian markets are subdued at opening tracking the trends in US markets and renewed concerns over political uncertainty in Greece. Japanese shares which had ended lower yesterday after paring their early gains on Ebola scare have started the day on a weak note and Nikkei has lost around 0.7%, so far. Hang Seng is also down by around 0.5% while Shanghai composite is flat.

Overnight, US markets closed flat in a thin trading session as volumes remained subdued ahead of the New Year’s holidays. S&P 500 index ended at record-closing high while Dow Jones Industrial Average and Nasdaq closed flat.

BSE Realty index was the top sectoral gainer up 0.9% followed by Capital Goods and Power indices while Metal, Bankex, Oil and Gas indices were the top sectoral losers.

Infrastructure major L&T was up 0.6% after the government approved ordinance to ease land acquisition. BHEL was marginally up.

Auto stocks also firmed up in early trades with M&M, Tata Motors and Maruti Suzuki up 0.2-0.5% each.

Meanwhile, IT majors extended gains with Infosys, Wipro and TCS up 0.1-0.3% each.

Oil and Gas shares were the top losers with Reliance Industries down 1% and ONGC eased 0.6%.

Private banks also witnessed profit taking with Axis Bank, HDFC Bank and ICICI Bank down 0.4-0.5% each.

In the broader market, the BSE Mid-cap index and Small-cap index were up 0.2% each.

Market breadth was strong with 851 gainers and 462 losers on the BSE.