Benchmarks trade flat with positive bias in early deals

Indian equity benchmarks are trading flat with positive bias in early deals on Wednesday as investors opted to remain on sidelines on the penultimate day of F&O expiry. Some support came in as the government proposed relaxing certain provisions for private companies in the new Companies Act. Meanwhile, finance secretary Arvind Mayaram, in an effort to boost the morale of investors has said that government's maiden budget will be "growth-oriented" with some "major changes" in policies to lift the economy to a higher growth orbit from the less than 5% expansion seen in the last two years. However, gains remained capped after United Nations Conference on Trade and Development (UNCTAD) in its latest World Investment Report said that India’s macroeconomic uncertainties remain a major concern for investors even as the country saw a 17% increase in foreign direct investment (FDI) to $28 billion in 2013.

On the global front, the US markets sold off despite good economic data on concerns about the escalating conflict in Iraq, which led traders to cash in some of their profits, overlooking Commerce Department report that new home sales jumped to a six-year high in May. The Asian markets were trading mostly in the red at this point of time taking cues from the US markets and as the demand for riskier assets dimmed on escalating violence in the Middle East.

Back home, on the sectoral front, power, consumer durables and metal witnessed the maximum gains in trade, while fast moving consumer goods and oil and gas remained the only losers on BSE sectoral space. The broader indices were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1200 shares on the gaining side against 660 shares on the losing side while 66 shares remain unchanged.

The BSE Sensex opened at 25421.49; around 53 point higher compared to its previous closing of 25368.90, and has touched a high and a low of 25427.80 and 25329.27 respectively. The index is currently trading at 25382.84, up by 13.94 points or 0.05%. There were 20 stocks advancing against 10 declines on the index.

The overall market breadth has made a strong start with 62.31% stocks advancing against 34.27% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices up by 0.70% and 0.49% respectively. 

The top gaining sectoral indices on the BSE were, Power up by 0.86%, Consumer Durables up by 0.79%, Metal up by 0.70%, PSU up by 0.58% and Auto up by 0.55%, while FMCG down by 0.43% and Oil and Gas down by 0.22% were the only losers on the sectoral index.

The top gainers on the Sensex were Bajaj Auto up by 2.43%, GAIL up by 1.54%, NTPC up by 1.39%, Tata Power up by 1.21% and BHEL up by 1.14%. On the flip side, Bharti Airtel was down by 1.63%, ITC was down by 1.09%, ICICI Bank was down by 0.81%, RIL was down by 0.44% and Axis Bank was down by 0.42% were the few losers on the Sensex.

Meanwhile, The Independent Evaluation Office (IEO) has recommended the government to abolish the Planning Commission and constitute Reform and Solution Commission as a government think tank through an Act of Parliament. The IEO, which was set up by the Planning Commission in the previous year, assesses the effectiveness of government programmes, institutions and policies.

The IEO, in a draft note sent to the Prime Minister’s Office (PMO), has suggested the government that the powers of disbursing funds to the state governments should be given to the finance ministry, which is accountable to Parliament unlike the Plan Panel. The IEO suggested that Finance Ministry should disburse funds on the recommendation of Finance Commission, which already existed in country and has authority bestowed upon it by the constitution. Financial commission should be a permanent body responsible for the allocation of centrally-collected revenues to the states working with the help of a panel of advisors having domain-level expertise, the notification added.

Regarding the working of planning commission, the IEO noted that Plan Panel is susceptible to pressures from the PMO and exceeds the scope of its authority which leads to partial treatment in allocation of resources amongst the states. Further, Panning Commission consist mostly IAS officer having less domain knowledge, making the panel structure same as central ministries in way of its administration.

The CNX Nifty opened at 7,588.55; about 8 points higher as compared to its previous closing of 7,580.20, and has touched a high and a low of 7,589.25 and 7,566.00 respectively. The index is currently trading at 7,580.90, up by 0.70 points or 0.01%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Bajaj Auto up by 2.34%, GAIL up by 1.33%, GAIL up by 1.16%, HCL Tech up by 1.11% and Tata Power up by 1.06%. On the flip side, Bharti Airtel down by 1.39%, ITC down by 1.17%, DLF down by 0.96%, ICICI Bank down by 0.88% and Asian Paints down by 0.63% were the major losers on the index.

Asian markets were trading mostly in the red; Nikkei 225 tumbled by 77.89 points or 0.51% to 15,298.35, KOSPI Index decreased 11.10 points or 0.56% to 1,983.25, Jakarta Composite dropped by 8.09 points or 0.17% to 4,854.15, Shanghai Composite slipped 10.28 points or 0.51% to 2,023.65, FTSE Bursa Malaysia KLCI declined by 3.42 points or 0.18% to 1,888.91 and Taiwan Weighted was down by 3.82 points or 0.04% to 9,242.38.

On the flip side, Hang Seng increased 23.96 points or 0.10% to 22,904.60 and Straits Times was up by 5.57 points or 0.17% to 3,267.60.