Benchmarks slip into negative territory in afternoon session

Indian equity benchmarks paired all their early gains and slipped into the negative territory in afternoon session on account of profit booking by funds and retail investors, ahead of final results of elections on May 16. Though most of the sectoral indices were trading in red, buying witnessed in power and consumer durables stocks has restricted the losses. Select buyers continue to add risky equities in their portfolio amidst hopes of a stable government led by BJP coming to power at the Centre. Metal was top losing index on BSE, down by around 1.45% followed by IT and oil and gas, both down by over 0.60%. Selling was broad based with both small and mid cap indices trading down by over 0.45%.

In stock specific movement, Asian Paints has dipped nearly 6% after lower than expected result for Q4 FY14. The company's EBITDA margin remained flat at 14.7% on account of higher raw material costs. On the other hand, Nilkamal has soared 11% after reporting nearly three-fold jump in net profit at Rs 14.13 crore Q4FY14 on back of strong operational performance.

On global front, Asian equity indices were trading mixed with Straits Times up by 0.31% and Shanghai Composite down by 0.91%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,150 and 23,800 levels respectively. The market breadth on BSE was negative, out of 2,508 stocks traded, 951 stocks advanced, while 1,422 stocks declined on the BSE.

The BSE Sensex is currently trading at 23,774.89 down by 40.23 points or 0.17% after trading in a range of 23,971.78 and 23,763.10. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.49%, while Small cap index down by 0.54%.

The gaining sectoral indices on the BSE were Power up by 0.92%, Consumer Durables up by 0.73%, Healthcare up by 0.50% and FMCG up by 0.18%. On the flip side, Metal down by 1.45%, IT down by 0.62%, Oil and Gas down by 0.59%, Capital Goods down by 0.59% and Realty down by 0.19% were the losing indices on BSE.   

The top gainers on the Sensex were NTPC up by 3.35%, Sun Pharma up by 2.32%, Tata Power up by 2.30%, Axis Bank up by 1.58% and Gail India up by 1.53%. On the flip side,  Coal India down by 3.03%,  Hindalco Inds down by 1.35%, SSLT down by 1.22%, ONGC down by 1.09% and Wipro down by 1.06%.

Meanwhile, RBI’s report on banking governance of bank boards, headed by ex-chairman of Axis Bank PJ Nayak, has highlighted the need for one-license regulatory regime for all broad-based banks, irrespective of their ownership pattern. This would also not preclude RBI from issuing niche licenses under other more narrowly defined, licensing regimes, if the country’s Apex Bank decides to do so. Notably, these recommendations were first suggested by the banking regulator in a discussion paper in 2013.

The panel’s report further highlighted that such a licensing regime would also involve uniform investment limits across investor categories, irrespective of ownership. However, it clarified that all the other investment limits recommended for private sector bank would be applicable to public sector banks, except for government’s own controlling stake.

The report added that this recommendation, if implemented would facilitate larger pools of capital for these banks, which in turn would help public sector bank market valuation. Further, the report also recommended induction of private equity through board representation as another option of financing for the government in case of distressed public sector banks, which would also help improve bank’s board governance.

The CNX Nifty is currently trading at 7,089.55 down by 19.20 points or 0.27% after trading in a range of 7,152.55 and 7,087.50. There were 20 stocks advancing against 30 declining on the index.

The top gainers of the Nifty were NTPC up by 3.27%, Tata Powers up by 2.18%, Sun Pharma up by 2.14%, Power Grid up by 1.83% and Gail up by 1.69%. On the flip side, Asian Paint down by 5.80%, Bank of Baroda down by 3.55%, Coal India down by 3.13%, NMDC down by 2.76% and Ambuja Cement down by 2.48% were the major losers on the index.

Asian equity indices were trading mixed; Hang Seng up by 0.33% to 22,657.17, Taiwan Weighted up by 0.06% to 8,880.65 and Straits Times up by 0.31% to 3,269.84. While, Shanghai Composite down by 0.91% to 2,029.89 and Nikkei 225 down by 0.75% to 14,297.68.