Markets pare early gains; trade near neutral line

Indian bourses pared all early gains and were trading flat in afternoon session amid firm global cues. Though most of sectoral indices were trading in green, selling witnessed in metal, capital goods and metal stocks dragged the markets down. However, investors were seen piling up position in healthcare, realty and consumer durables stocks. Sentiment got some support as the RBI eased overseas investment norms for Indian corporate by raising their borrowing limit. Further, continual FII capital inflows and expectations that the government will announce reform measures in the coming budget 2014-15 provided some support to domestic benchmarks. However, there is cautiousness among investors as the World Bank warned that India’s inflation persistently remained uncomfortably high and the new government should avoid fiscal slippages in the process of reviving growth. Healthcare was the top gaining index of BSE up by around 0.89% whereas metal was top losing index trading down by around 0.84% on account of profit booking  after recent gains. The broader markets were outperforming the benchmarks and both mid cap and small cap indices were trading up by over 0.40%.

Videocon Industries has rallied around 7% to Rs 200 on back of heavy volumes amid reports that the company’ satellite TV arm and direct to home service provider Videocon d2h is likely to go ahead with its proposed public float (IPO) plan this financial year. Further, extending its past two day’s rally, United Bank of India has soared around 19% to Rs 61.75 on back of heavy volumes.

On global front, most of the Asian equity indices were trading in green with Hang Seng up by 0.16% to 23,570.10 and Nikkei up by 0.56% to 15,437.94. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,700 and 25,500 levels respectively. The market breadth on BSE was positive, out of 2,711 stocks traded, 1,461 stocks advanced, while 1,136 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,827.05 up by 3.30 points or 0.01% after trading in a range of 25,893.31 and 25,809.04. 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 0.40%, while Small cap index up by 0.77%.

The gaining sectoral indices on the BSE were Healthcare up by 0.89%, Realty up by 0.68%, Consumer Durables up by 0.53%, Oil and Gas up by 0.44% and FMCG up by 0.25%. On the flip side, Metal down by 0.84%, Capital Goods down by 0.82%, Bankex down by 0.08%, Auto down by 0.06% and Power down by 0.05% were the losing indices on BSE.    

The top gainers on the Sensex were Dr Reddy’s Lab up by 1.72%, HDFC Bank up by 0.92%, Bharti Airtel up by 0.79%, Cipla up by 0.62% and RIL up by 0.60%. On the flip side, L&T down by 1.18%, Coal India down by 1.05%, SSLT down by 1.00%, Wipro down by 1.00% and M&M down by 0.93% were the top losers on the BSE.

Meanwhile, Textiles Minister Santosh Gangwar has stated that the ministry will prepare the draft for new National Textiles Policy within the next 15 to 20 days. The current National Textile Policy 2000 was framed about 13 years ago. Therefore, there is a need to upgrade the existing policy as domestic textile industry has witnessed large scale modernisation and technological up-gradation in the last decade and faces new challenges.

The new policy aims to formulate a stable and fibre neutral raw materials guidelines to benefit the entire value chain and to address modernization and mechanization needs of the textile industry. The New Textiles policy also envisages enhancing the textile exports' market share globally from the current 4 percent and address concerns of adequate skilled work force, labour reforms. The new textile policy is also aimed to develop skilled work force, creating world class infrastructure for textile parks along with a conductive investment environment.

Textile industry plays significant role for economic development of the country in terms of net foreign exchange earnings, as well as through direct and indirect employment generation. Industry contributes around 4 percent to the gross domestic product (GDP), around 10 percent to the country’s export earnings and nearly 14 percent to industrial production besides providing direct employment to over 45 million people. The present market size of the industry stands at around $90 billion, which is expected to touch $220 billion mark by 2020.

The CNX Nifty is currently trading at 7,711.40 down by 3.40 points or 0.04% after trading in a range of 7,733.50 and 7,708.90. There were 24 stocks advancing against 26 declining on the index.

The top gainers of the Nifty were Dr Reddy’s Lab up by 1.84%, Lupin up by 1.47%, Asian Paints up by 1.40%, BPCL up by 1.15% and HDFC Bank up by 0.98%. On the flip side, McDowell down by 1.63%, PNB down by 1.44%, Bank of Baroda down by 1.35%, Jindal Steel down by 1.24% and L&T down by 1.20% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng up by 0.16% to 23,570.10, Nikkei up by 0.56% to 15,437.94, Straits Times up by 0.13% to 3,276.74 and and Jakarta Stock Index up by 0.34% to 4,905.24. While, Shanghai Composite down by 0.14% to 2,059.92 and Taiwan Weighted down by 0.17% to 9,510.05