Markets continue to trade lackluster on penultimate session of F&O expiry

Markets continued to trade lackluster on penultimate session of F&O expiry on escalating tension in Iraq which threatened to push up Brent crude prices offset the impact of buying by foreign investors. Besides, somber global set-up also was weighing on the sentiment, which preferred keeping on the sidelines ahead of expiry of June derivatives on Thursday. On the global front, Asian shares were on the back foot early on Wednesday, taking their cue from Wall Street as the deepening crisis in Iraq and a report that the United States could be easing restrictions on crude exports triggered a rally in oil prices. Meanwhile, European shares too receiving negative handover from Asian counterparts, got off to a weak start.

Back home, oscillating in thin range, both Sensex and Nifty were trading above the psychologically crucial 25,300 and 7,550 levels respectively, with slender losses of around one tenth of a percent. However, broader indices showing degree of resilience were trading with gains of around half a percent. On the BSE sectoral front, while stocks from Realty, Healthcare and Consumer Durables counters were the prominent gainers of the session, those from Oil & Gas, Fast Moving Consumer Goods and banking counters were the top losers. In stock-specific activities, investors continued  to lap up non-banking finance companies, SKS Microfinance, Muthoot Finance,  Manappuram Finance  and  Magma Fincorp shares on Wednesday after the Reserve Bank of India permitted NBFCs to act as business correspondents (BCs) of banks.  Additionally, shares in road developers, IRB Infrastructure Developers and KNR Constructions surged after reports suggested Roads Minister Nitin Gadkari underscoring country’s India plans to raise road-building capacity to 30 kms per day in two years from the present three kilometers. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1495:1218; while 127 shares remained unchanged.

The BSE Sensex is currently trading at 25340.75, down by 28.15 points or 0.11% after trading in a range of 25314.90 and 25427.80. There were 17 stocks advancing against 13 stocks declining on the index.   

The broader indices were trading in green; the BSE Mid cap index was up by 0.45%, while Small cap index up by 0.43%.   

The gaining sectoral indices on the BSE were Realty up by 0.97%, Healthcare up by 0.85%, Consumer Durables up by 0.8%, IT up by 0.42% and Power up by 0.41%. While, Oil & Gas down by 0.57%, FMCG down by 0.45%, Bankex down by 0.34%, India Infrastructure Index down by 0.12% and Capital Goods down by 0.02% were the losing indices on BSE.   

The top gainers on the Sensex were Bajaj Auto up by 2.22%, Coal India up by 1.57%, Sun Pharma up by 1.02%, Gail India up by 1% and Tata Power up by 0.96%. On the flip side, Bharti Airtel down by 2.19%, ICICI Bank down by 1.3%, ITC down by 1.2%, SSLT down by 0.85% and ONGC down by 0.76% were the top losers.    Meanwhile, the United Nations Conference on Trade and Development (UNCTAD), in its latest World Investment Report, underscored that India’s macroeconomic uncertainties remain to be a major concern for investors even as the country witnessed a 17% increase in foreign direct investment (FDI) to $28 billion in 2013. The report unveiled that the country has slipped from the second most favored investment destination in 2005 to fourth position in 2014, though its FDI recipient ranking, remained unchanged, at 14.

The investment report UNCTAD pointed that high inflation and the other macroeconomic problems had casted doubts on the prospects for FDI, despite the government's ambitious goal to boost foreign investment. It emphasized that policy responses to macroeconomic problems would play an important role in determining FDI prospects in the short to medium run.

It blamed a series of policy flip-flops and tax notices, which many in the government refer to as 'tax terrorism' for denting India's image, dragging the country to fourth position. In its annual World Investment Report 2014 released Tuesday for transnational corporations (TNCs), UNCTAD underscored that China remained the top draw followed by the US and that Indonesia had overtaken India to emerge as the third most preferred destination for 2014-16.

The UNCTAD report also mentioned the government's retail liberalization efforts did not result in expected inflows as international supermarket chains, barring Tesco, stayed away from investing in the multi-brand retail segment due to policy uncertainty. It suggested that the government could adopt a different policy approach to leverage foreign investment for the development of the Indian industry and could look at franchising and other non-equity forms to get global players to start operating in India. 

The CNX Nifty is currently trading at 7573.7, down by 6.50 points or 0.09% after trading in a range of 7564.05 and 7589.25. There were 27 stocks advancing against 23 stocks declining on the index.   

The top gainers on Nifty were Bajaj-Auto up by 2.2%, Coal India up by 1.63%, Lupin up by 1.57%, GAIL up by 1.26% and HCL Technologies up by 1.21%. On the flip side, Bharti Airtel down by 2.17%, ICICI Bank down by 1.34%, ITC down by 1.34%, BPCL down by 1.05% and IDFC down by 0.92% were the top losers. 

Asian equity indices were trading mostly in red;  While, Nikkei 225 down by 0.71%, Jakarta Stock Index down by 0.26%, Shanghai Composite down by 0.43% and Taiwan Weighted down by 0.04% were the top losers on the index. While, Straits Times up by 0.07% and Hang Seng up by 0.03% were the only gainers.

European shares got off to a negative start; with Germany’s DAX sliding by 0.58% , France’s CAC 40 plunging by 0.68% and United Kingdom’s FTSE 100 dropping 0.43%