Benchmarks continue lackadaisical trade; Nifty holds 7300 mark

Indian equity benchmarks continue their lackadaisical trade still hovering around the neutral line in the late afternoon session. The sentiments were on lackluster mood after foreign brokerages said that the new PM Narendra Modi’s newly minted Cabinet ministers as underwhelming, saying no professionals were brought in for ministries targeted for reforms, such as railways and coal. Traders were seen piling up positions in IT, TECK and Realty stocks, while selling was witnessed in Metal, Auto and PSU sector stocks. In scrip specific development, Shipping Corporation of India (SCI) was trading firm after the company posted its first quarterly net profit in six on improving performance in its bulk shipping and liner businesses. ICRA was trading in green after Moody’s revised the open offer price from Rs 2,000 to Rs 2,400. Moody’s currently holds a non-controlling 28.5% stake and the offer is to increase the stake by another 26.5%. The market may remain volatile in the near future as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. May 2014 series to next month i.e. June 2014 series. The near month May 2014 derivatives contract will expire tomorrow i.e. May 29, 2014.

On the global front, the Asian markets were trading in green, while the European markets traded mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,300 and 24,500 levels respectively. The market breadth on BSE was positive in the ratio of 1776:1018 while 100 scrips remained unchanged.

The BSE Sensex is currently trading at 24525.02, down by 24.49 points or 0.10% after trading in a range of 24643.33 and 24488.81. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.50%, while Small cap index up by 1.58%.

The gaining sectoral indices on the BSE were IT up by 1.16%, TECK up by 1.13%, Realty up by 0.99%, Capital Goods up by 0.81% and HealthCare up by 0.31%. While, Metal down by 1.21%, Auto down by 0.80%, PSU down by 0.78%, Oil & Gas down by 0.64% and FMCG down by 0.38% were the losing indices on BSE.   

The top gainers on the Sensex were BHEL up by 2.89%, Tata Power up by 2.64%, Hero Motocorp up by 2.55%, Dr. Reddy’s Lab up by 1.94% and HDFC Bank up by 1.83%. On the flip side, Gail India down by 3.06%, Tata Motors down by 2.19%, Coal India up by 1.97%, M&M down by 1.96% and ONGC down by 1.85%.

Meanwhile, with a view to provide importers with greater flexibility in hedging facility, the Reserve Bank of India (RBI) has decided to allow domestic importers to book forward contracts up to 50 percent of the eligible limit under the past performance route. As per the present guidelines relating to hedging of currency risk of probable exposures based on past performance, Indian importers are allowed to book contracts up to 25 percent of the eligible limit.

The RBI further notified that importers who have already booked contracts up to previous limit of 25 percent in the current financial year, will be eligible for difference arising out of the enhanced limits. The eligible limit is determined on the basis of average of the previous three financial years' import turnover or the previous year's actual import turnover, whichever is higher.

The RBI’s latest move is likely to provide some relief to importers as the depreciation in rupee value increases the imports costs. During the FY14, India’s overall imports declined by 8.11% to $450.95 billion as against $490.74 billion reported in the same period of previous fiscal year. Contraction in domestic imports during FY14 was mainly driven by weak domestic demand and lower gold imports.

The CNX Nifty is currently trading at 7,320.40, up by 2.40 points or 0.03% after trading in a range of 7,344.75 and 7,302.60. There were 26 stocks advancing against 24 declining ones on the index.

The top gainers of the Nifty were Ultratech Cement up by 4.65%, Ambuja Cement up by 4.08%, ACC up by 3.48%, BHEL up by 2.95% and HCL Tech up 2.89%. On the flip side, Gail India down by 2.98%, Tata Motors down by 2.29%, M&M down by 2.17%, HDFC down by 1.92% and Coal India down by 1.82% were the major losers on the index.

Asian equity indices were trading in green; Nikkei 225 up by 0.24%, Taiwan Weighted up by 0.73%, Shanghai Composite up by 0.77%, Hang Seng up by 0.59%, Jakarta Index up by 0.31% and Straits Times up by 0.08%.

The European markets were trading mostly in red, with France’s CAC 40 was down by 0.10% and UK’s FTSE 100 lost 0.05% while Germany’s DAX added 0.01%.