Benchmarks continue firm trade in late morning session

Indian bourses continued to trade in green in late morning session on increased buying by funds and retail investors, mainly in oil and gas, banking, capital goods, realty and FMCG sector stocks. Firm global cues coupled with the appreciation in rupee value against the dollar too added to the optimistic sentiments. However, absence of cues from the Asian region, after the closure of financial markets in Hong Kong and Japan for public holidays, limited the gains on the domestic bourses. Some metal stocks came under selling pressure after strong gains yesterday. In scrip specific development, shares of Canara Bank fall as much as 2.80% after reporting a 15.7% decline in net profit to Rs 611 crore for the quarter ended March 31, 2014. While, shares of Steel Authority of India (SAIL) was trading firm after reporting an over two-fold jump in standalone net profit at Rs 51.56 crore for the quarter ended March 31, 2014, on back of higher sales. Moreover, Eveready has weakened by 1.50% despite posting a net profit of Rs 1.25 crore for the quarter ended March 31, 2014 compared to a net loss of Rs 2.15 crore during the corresponding period last year.

On the global front, most of Asian markets were trading in green with some of the major indices shut for the day. US stocks closed higher as data showed strength in the services sector and Apple shares rose above $600 for the first time since 2012. Back home, Clariant Chemicals (India), Gillette India, Gujarat Pipavav Port, JM Financial, Mahindra Holidays and Resorts India, Titan Company and Vijaya Bank will be in focus on account of March quarter earnings announcement.

The market breadth on BSE was positive, out of 2020 stocks traded, 1251 stocks advanced, while 682 stocks declined on the BSE.

The BSE Sensex is currently trading at 22554.59 up by 109.47 points or 0.49% after trading in a range of 22602.71 and 22512.23. There were 21 stocks advancing against 9 stocks declining on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.68%, while Small cap index up by 0.75%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.02%, FMCG up by 0.96%, Realty up by 0.93%, Capital Goods up by 0.82% and PSU up by 0.77%. While, IT down by 0.29% and Teck down by 0.04% were the only losing indices on BSE.   

The top gainers on the Sensex were ICICI Bank up by 1.61%, ITC up by 1.51%, BHEL up by 1.32%, ONGC up by 1.28% and Tata Steel up by 1.17%. On the flip side, Hero MotoCorp down by 0.94%, Hindalco  down by 0.87%, TCS down by 0.75%, Bajaj Auto down by 0.72% and Maruti Suzuki down by 0.37%.

Meanwhile, the Securities and Exchange Board of India (SEBI), has directed that foreign investors with ‘opaque’ structures will not be allowed to come in under the new Foreign Portfolio Investor (FPI) regime. The market regulator has notified that some foreign entities use complex multi-fund structures such as multi-class share vehicle (MCV) or protected cell companies (PCCs) to invest in India which can lead to possible round-tripping or money laundering activities.

SEBI further stated that the FPI applicant would need to give a declaration that they were not operating as PCCs, MCVs or any such equivalent structures.  However, an overseas FPI applicant will not be considered as opaque structure if it is firmly regulated by its home jurisdiction. Such funds will be considered for grant of registration after meeting certain conditions. Under the new regime, FPIs excluding high-risk profile entities would also be allowed to issue participatory notes.

The new Foreign Portfolio Investor (FPI) regime will be implemented from next month and all existing investor classes such as Foreign Institutional Investors (FIIs), their sub-accounts and Qualified Foreign Investors (FIIs) to be counted as FPIs. New foreign investors wishing to invest in Indian markets will have to register as FPIs, which has divided the investors into three categories on their risk profiles. The Category I FPIs include lowest risk entities such as foreign governments and government related foreign investors. Category II FPIs include appropriately regulated broad based funds and regulated entities, university related endowments and pension funds etc, while Category III FPIs include all others not eligible under the first two categories.

The CNX Nifty is currently trading at 6,729.40 up by 30.05 points or 0.45% after trading in a range of 6,743.45 and 6,719.00. There were 31 stocks advancing against 19 declining on the index.

The top gainers of the Nifty were DLF up by 2.09%, ICICI Bank up by 1.74%, BHEL up by 1.66%, ITC up by 1.48% and ACC up by 1.41%. On the flip side, Jindal Steel down by 1.44%, Hindalco down by 1.19%, Bajaj-Auto down by 0.90%, Hero MotoCorp down by 0.75% and TCS down by 0.71% were the major losers on the index.

Most of Asian equity indices were trading in green; Shanghai Composite gained 0.44%, Jakarta Composite rose 0.05%, Straits Times increased by 0.17% and Taiwan Weighted was up by 0.53%. On the flip side, KLSE Composite was down by 0.09%.