Markets trade flat with negative bias in range-bound session of trade

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were now trading flat with bit of negative bias as investors and foreign funds were adopting a cautious approach, amid concerns that rising global crude prices will fuel inflation and raise import bill and hurt India’s economy growth. Sentiment on the street weakened further on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 420.51 crore on June 19, 2014. Moreover, weak trend in Asian stocks coupled with depreciation in rupee value also weighed on the sentiment. Holding slender loss, both Sensex and Nifty were trading little short of the crucial 25,200 and 7,550 levels respectively. However, gains in Consumer Durables, PSU and Bankex stocks have restrained the market to extend losses. Some support also came in with Petroleum Minister Dharmendra Pradhan’s statement that fuel supplies will not be impacted by the conflict in Iraq, nation’s second largest crude oil supplier. In scrip specific development, Shares of Atul Auto were trading higher after the company said it board will consider sub-division of equity shares of the company of face value of Rs 10 each into a lower denomination. Moreover, Shares of ICRA surged after Moody's Corporation secured a majority equity ownership stake in the company through open offer.

On the global front, Asian stocks fell from a six-year high, paring a sixth weekly gain on the regional benchmark index, as materials and technology companies dropped. However, US markets had ended higher, with the S&P 500 on track to close at a new record, after the Federal Reserve hinted at a slightly faster pace of interest rate increases starting next year but suggested that rates in the long-run would be lower than it had indicated previously. Back home, the market breadth on BSE was positive, out of 2209 stocks traded, 1094 stocks advanced, while 1036 stocks declined on the BSE.

The BSE Sensex is currently trading at 25198.73 down by 3.07 points or 0.01% after trading in a range of 25266.08 and 25161.03. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading up by 0.16% and 0.05% respectively.

The gaining sectoral indices on the BSE were, Consumer Durables up by 1.22%, India Infrastructure Index up by 0.54%, PSU up by 0.37%, Bankex up by 0.34% and Oil & Gas up by 0.33%. While, Capital Goods down by 0.45%, Auto down by 0.36%, FMCG down by 0.33%, Healthcare down by 0.20% and IT down by 0.01% were the losing indices on BSE.   

The top gainers on the Sensex were Cipla up by 1.56%, ONGC up by 1.33%, Axis Bank up by 1.31%, Dr Reddys Lab up by 0.68% and Bajaj Auto up by 0.65%. On the flip side, Tata Power down by 1.82%, Sun Pharma down by 1.39%, Tata Motors down by 0.91%, Mahindra & Mahindra down by 0.83% and Hindustan Unilever down by 0.75%.

Meanwhile, Capital markets regulator, Securities and Exchange Board of India (SEBI) has approved a slew of reforms which include increasing public holding in all PSUs to a minimum 25 per cent and unveiled new norms for research analysts, employee stock option schemes as well as reforms to boost the primary market.

The capital market watchdog has made it mandatory for all listed PSUs to have at least 25 per cent public shareholding within three years. The move is aimed at ensuring uniformity among listed entities irrespective of their promoters and is expected to help the government raise close to Rs 60,000 crore through sale of excess shares in 38 state-run firms. As per the existing norms, the PSUs should have at least 10 per cent public shareholding whereas for non-PSU firms the minimum level is 25 per cent. To revive the primary market, the SEBI eased norms related to the size of an initial public offer (IPO) and pricing of preferential shares. Furthermore, it has also allowed the anchor investors to have a greater exposure to the offering. The SEBI further notified that the companies with a post-issue capital above Rs 4,000 crore are compulsorily required to offer at least 10 per cent stake in the IPO. In other IPOs, minimum dilution to public will be 25 percent, or Rs 400 crore, whichever is lower.

In order to safeguard investors from manipulative research reports, the capital market regulators has approved detailed norms for 'research analysts'. The people who are doing research reports will have to register with SEBI and post-registration research analyst should have to comply with certain disclosure requirements. Regarding the retail investors, it noted that retail investors would now get a 10 per cent reservation in an offer for sale (OFS) and could also look forward to discounts by entities selling shares through this route. Furthermore, the capital regulator has also decided to make OFS route available to the top 200 listed firms by market capitalisation, compared with the top 100 listed companies at present. To implement common norms across the financial market, the SEBI has decided to share know your client (KYC) information with entities regulated by other financial sector watchdogs.

The SEBI has also approved an easier set of regulations for employee stock option schemes which would classify ESOP Trusts as a separate category of shareholding entities. According to these norms, the regulator has allowed companies to have employee stock option programmes where they can buy their own company shares subject to certain conditions. The notification further added that to ensure smooth transition with the new framework, the existing employee benefit schemes have been provided with a time period of one year from the notification date.

The CNX Nifty is currently trading at 7,537.35 down by 3.35 points or 0.04% after trading in a range of 7,553.15 and 7,521.30. There were 24 stocks advancing against 26 declining on the index.

The top gainers of the Nifty were Kotak Bank up by 1.62%, Axis Bank up by 1.41%, Cipla up by 1.39%, Cairn up by 1.35% and ONGC up by 1.24%. On the flip side, Sun Pharma down by 1.71%, Tata Power down by 1.64%, M&M down by 1.02%, Tata Motors down by 0.96% and MCDOWELL-N down by 0.96% were the major losers on the index.

Most of the Asian equity indices were trading in red; KOSPI Index slipped by 1.20%, Straits Times declined 0.15%, Shanghai Composite contracted by 0.53%, Jakarta Composite tumbled 0.18%, Taiwan Weighted decreased 0.32%, Nikkei 225 down by 0.04% and FTSE Bursa Malaysia KLCI was down by 0.06%. On the flip side, Hang Seng up by 0.22%.