Markets succumb to selling pressure; trade with cut of around 0.50%

Local equity markets, erasing early gains, succumbed to selling pressure and were currently nursing losses of around half a percent, which dragged both Sensex and Nifty below the crucial 25,150 and 7,550 levels respectively. Market’s fall was led by Oil explorers, which slumped on worries of high gas pricing, which might be allowed only for incremental output. The stocks were beaten blue after reports suggested of petroleum ministry, in a proposal, allowing higher gas price as per the Rangarajan formula only for incremental production over and above the current levels, as an alternative to applying the formula unconditionally from July 1. This was followed by stocks from Public Sector Undertaking and Metal counters which were so far among the worst hit of the session. In the ferocious selling pressure, broader indices too were trading with cut of over half a percent.

Meanwhile, on the global front, most of the Asian pacific shares, losing early optimistic, were set to clock a mostly negative close as market-participants preferred booking profits on Iraq anxiety. However, European shares got off to a mostly positive start tracking gains in U.S. after the Federal Reserve said the economy was making progress and committed to retaining accommodative monetary policy over the long term.

Back home, the BSE Sensex is currently trading at 25124.5, down by 121.7 points or 0.48% after trading in a range of 25069.7 and 25425.8. There were 15 stocks advancing against 15 stocks declining on the index. The overall market breath on BSE was in the favour of declines which were outnumbering advances in the ratio of 1505:1122; while 115 shares remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.56%, while Small cap index down by 0.43%.   

The gaining sectoral indices on the BSE were IT up by 1.22%, TECK up by 0.90%, Consumer Durables up by 0.31%, AUTO up by 0.14% and FMCG up by 0.11%. while, Oil & Gas down by 3.38%, PSU down by 2.33%, Metal down by 1.17%, Bankex down by 1.05% and India Infrastructure Index down by 0.76%  were the losing indices on BSE.   

The top gainers on the Sensex were Infosys up by 1.66%, Wipro up by 1.39%, Tata Motors up by 1.06%, TCS up by 0.82% and ITC up by 0.57%. On the flip side, ONGC down by 6.7%, RIL down by 2.31%, Maruti Suzuki down by 2.21%, Coal India down by 2.18% and Gail India down by 1.83% were the top losers.   

Meanwhile, to protect the long-term interests of life insurance policyholders, the Insurance Regulatory and Development Authority (IRDA) has made it mandatory for agents to provide full details in a transparent manner before persuading policyholders to shift to another life insurance firm. The draft underscores that no life insurance agent, insurance intermediary or an insurer is permitted to replace a life insurance policy, except, if it is in the interest of the policyholder.

The guidelines floated by the insurance regulator, which tightens replacement norms that would help retain the existing life insurance policy, envisages full disclosure and transparent information to the policyholder to avoid a possible misrepresentation as to the factual position of financial consequences of replacing an existing life insurance policy.

These guidelines, charted out by the insurance watchdog, seeks to discourage intermediaries from persuading lapsing, surrendering or making paid-up of an existing life insurance policy with the intent of canvassing or soliciting a new life insurance policy on the same life. It is framed with an aim to encourage fair market conduct and fair business practices amongst life insurers and insurance intermediaries.

According to the regulator, replacement, if required, would be subject to certain conditions, including obtaining a written consent from the prospect for replacing existing policies. Besides this, there also will be requirement to obtain the particulars of all existing life insurance contracts of the prospect and details of those policies that are proposed to be replaced. Additionally, other condition would include submission of the proposal form to the insurer (new insurer) replacing the existing life policy contracts after the expiry of 15 days from the date of notifying the insurer (old insurer) whose policies are proposed to be replaced, among other things.

The CNX Nifty is currently trading at 7520.60, down by 37.6 points or 0.50% after trading in a range of 7502.55 and 7606.45. There were 23 stocks advancing against 27 stocks declining on the index.   

The top gainers on Nifty were Infosys up by 1.82%, Wipro up by 1.48%, Tata Motors up by 1.35%, Tech Mahindra up by 0.99% and IndusInd Bank up by 0.97%. On the flip side, ONGC down by 6.71%, MCDOWELL-N down by 4.51%, Kotak Bank down by 3.72%, BPCL down by 2.91% and Coal India down by 2.46% were the top losers.  

Asian equity indices were trading mostly in red; Nikkei 225 up by 1.62% and Taiwan Weighted up by 0.40%. While, Straits Times down by 0.03%, Hang Seng down by 0.22%, Jakarta Stock Index down by 0.34% and Shanghai Composite plunged by 1.79%. 

European shares got off to a mostly positive start; with Germany’s DAX rising by 0.10%, United Kingdom’s FTSE 100 gaining 0.17%, however, France’s CAC was trading lower by 0.13% at the start of the trade.