Benchmarks end volatile trade on a quiet note

Indian equity benchmarks ended the volatile session of trade on a flat note on Thursday, a day after touching their fresh all-time closing high levels. The bourses went through volatility where benchmarks, despite making decent opening, slipped into red for a couple of times during the session. Investors in last leg of trade turned cautious and booked profit ahead of the Infosys’ fourth quarter performance which will set the tone of earnings season for the January-March quarter. Overall, sentiments remained up-beat after World Bank projected an economic growth rate of 5.7 percent in fiscal year 2015 for India on the back of a more competitive exchange rate and many large investments going forward.

Investors’ confidence also got boost with report that India Inc raised $2.72 billion more through external commercial borrowings (ECB) in the first 11 months of financial year 2013-14 on the back of better business environment. Some support also came in on report that foreign institutional investors (FIIs) bought shares worth a net Rs 1043.86 crore on April 9, 2014, as per provisional data from the stock exchanges.

Supportive cues from US markets led the gains in local markets and sentiments remained up-beat following the release of the minutes of the latest Federal Reserve meeting that eased concerns about the central bank raising interest rates sooner than anticipated. Asian markets too ended mostly in the green with both Hong Kong and Shanghai markets edging higher, after China announced a plan to widen market access for overseas investors and allow direct stock trading between Hong Kong and Shanghai. However, disappointing start of European markets took their toll on domestic sentiments and capped the gains.

Back home, selling pressure in software manufacturer Infosys, cigarette to hotel conglomerate ITC and private lender ICICI Bank pulled the benchmarks lower in dying hour of trade. Meanwhile, stocks related to healthcare space which witnessed splendid run in last few sessions witnessed massacre in today’s trade. Software and technology counters too witnessed selling pressure as investors remained concerned ahead of the release of quarterly earnings next week.

On the flip side, steel stocks like Tata Steel, JSW Steel, SSLT and SAIL all edged higher on the World Steel Association (WSA) statement that India’s steel demand may grow 3.3 per cent this year on higher demand from construction and manufacturing sectors. Stocks related to aviation stocks too remained on buyers’ radar, as the SEBI is likely to pass final order on Jet Airways, Etihad Airways deal soon.

The NSE’s 50-share broadly followed index Nifty edged marginally higher to end near the psychological 6,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over ten points to hold the psychological 22,700 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of over half a percent. The market breadth remained in favor of advances, as there were 1,551 shares on the gaining side against 1,251 shares on the losing side while 144 shares remain unchanged.

Finally, the BSE Sensex gained 12.99 points or 0.06%, to settle at 22715.33, while the CNX Nifty added 0.20 points to settle at 6,796.40.

The BSE Sensex touched a high and a low of 22792.49 and 22644.43, respectively. The BSE Mid cap index was up by 0.63%, while the Small cap index gained 0.63%.

The top gainers on the Sensex were Tata Power up by 4.12%, BHEL up by 2.70%, NTPC up by 2.57%, Tata Motors up by 2.33% and SBI up by 2.15%, while Dr Reddys Lab down by 2.72%, Sun Pharma down by 1.85%, Hero MotoCorp down by 1.70%, Infosys down by 1.43% and ITC down by 1.42% were the top losers in the index.

On the BSE Sectoral front, Power up by 2.52%, Capital Goods up by 1.61%, Realty up by 1.25%, PSU up by 0.98% and Oil & Gas up by 0.74% were the top gainers, while Healthcare down by 1.47%, IT down by 0.80%, Teck down by 0.73%, FMCG down by 0.47% and Consumer Durables down by 0.38% were the top losers in the space.

Meanwhile, the Insurance Regulatory and Development Authority (IRDA) is likely to come out with final norms in the next few months for insurance marketing firms, while the domestic insurance firms are taking a cautious approach to distribute products through this channel. Industry players are of the view that sections of the agent/broker community can forcefully push unit-linked products (ULIP) to customers which might lead to trust deficit. Further, insurance firms perceive misuse of customer data as insurance marketing firms dealing with customers for different financial products will have an opportunity to cross-sell products.

The IRDA has introduced a new channel of distribution in order to enhance the penetration level of insurance products in the country. The insurance regulator might allow insurance companies to have multiple tie-ups with insurance marketing firms, which can market and service insurance and sell mutual funds, pension products, and other Sebi-regulated financial products. As per the IRDA, limited liability partnership firms, partnership firms, companies formed under the Companies Act, or any other person recognised by IRDA can apply to be an insurance marketing firm. The IRDA’s move is likely to benefit the corporate who want to enter the Indian insurance industry via a new route.

IRDA has recently held various meetings with the representatives of life and non-life insurance companies and has asked all stakeholders to provide their views on the draft by April 15, 2014. Later, the final norms for insurance marketing firms will be issued and firms will be licensed. Insurance in India is mainly of two types namely ‘life insurance’ and ‘general insurance’. At present, there are fifty-two insurance companies operating in India of which twenty-four are in the life insurance business. At present, the growth of Indian insurance industry is under pressure owing to the prevailing economic slowdown and change in some traditional product norms. Insurance penetration in India has fallen for the second time after the sector was opened for private players. During 2013, insurance penetration, measured as percentage of insurance premium to gross domestic product, declined to around 3.96% as against 4.1% in 2011 and 5.1% in 2010, reflecting need to develop the insurance sector.

The CNX Nifty touched a high and low of 6,819.05 and 6,777.30 respectively.

The top gainers of the Nifty were Tata Power Company up by 3.93%, NTPC up by 2.86%, BPCL up by 2.60%, Cairn India up by 2.39% and Tata Motors up by 2.01%. On the other hand, Dr. Reddy's Laboratories down by 3.17%, Sun Pharmaceuticals Industries down by 2.70%, HCL Technologies down by 2.05%, Lupin down by 1.94% and Tech Mahindra down by 1.88% were the top losers.

Most of the European markets were trading in red, France's CAC 40 was down by 0.26% and Germany's DAX was down by 0.16% while, United Kingdom's FTSE 100 was up by 0.08%.

The Asian markets concluded Thursday’s trade mostly in green with Indonesian stocks felling the most - sending the main index to its biggest decline in seven months - after early legislative results showed that presidential candidate Joko Widodo’s party may not have enough seats to secure its own pick and would have to form a coalition, disappointing investors who hoped for an easy nomination. Both Hong Kong and Shanghai markets were up, after China announced a plan to widen market access for overseas investors and allow direct stock trading between Hong Kong and Shanghai. Malaysian Industrial Production rose to a seasonally adjusted annual rate of 6.7%, from 3.7% in the preceding month. Japan’s Core Machinery Orders fell and stood at -8.8% from 13.4% in the preceding month.

China’s exports and imports unexpectedly fell in March as Premier Li Keqiang informed that the nation will roll out more policies to support growth while avoiding stronger stimulus. Overseas shipments declined 6.6 percent from a year earlier, attributing the drop partly to distortions from inflated data in early 2013. Imports fell 11.3 percent, in part on falling commodity prices, leaving a trade surplus of $7.71 billion.