Benchmarks trim losses; trade continues in red

Indian equity benchmarks pared their losses but continued to trade in red in the late afternoon session taking cues from European counterparts. Investors took cautious approach regarding the maiden budget of the new Modi led government, which will unveil key details about the fiscal deficit target and government borrowings for the remainder of the fiscal year ending in March 2015. Traders were seen piling up positions in Realty, HealthCare and Oil & Gas while selling was witnessed in Metal, Capital Goods and Power sector stocks. In scrip specific development, Videocon Industries was trading firm on reports that the company’s satellite TV arm Videocon d2h is likely to go ahead with its proposed initial public offer this financial year. Bharti Airtel was trading in green after Reserve Bank of India increased limit for overseas investors to buy shares in the company.

On the global front, the Asian markets were trading on a mixed note, while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,750 and 25,800 levels respectively. The market breadth on BSE was negative in the ratio of 1396:1486 while 135 scrips remained unchanged.

The BSE Sensex is currently trading at 25789.34, down by 34.41 points or 0.13% after trading in a range of 25893.31 and 25659.33. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.43%.

The gaining sectoral indices on the BSE were Realty up by 0.78%, HealthCare up by 0.52%, Oil & Gas up by 0.28%, India Infrastructure Index up 0.27% and FMCG up 0.18% while, Metal down by 1.13%, Capital Goods down by 0.80%, Power down by 0.46%, Bankex down by 0.28% and PSU down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.24%, Bharti Airtel up by 0.76%, Infosys up by 0.63%, HDFC Bank up by 0.57% and Reliance Industries up by 0.43%. On the flip side, Sesa Sterlite down by 1.59%, Hindalco Industries down by 1.35%, Tata Steel down by 1.26%, Wipro down by 1.19% and L&T down by 1.12% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has relaxed overseas investment norms for Indian corporate by raising their borrowing limit. The RBI has enhanced the overseas direct investments (ODI) to 400 percent of a company's net worth from 100 percent for all companies.

The RBI’s notification has highlighted that any financial commitment (FC) exceeding $1 billion or its equivalent in a financial year would require prior approval of the Reserve Bank even when the total FC of the Indian Party is within the eligible limit under the automatic route (within 400% of the net worth as per the last audited balance sheet).

Last year, RBI had reduced the ODI limit to 100 percent due to prevailing macro-economic situation mainly rupee depreciation. Rupee had depreciated to all-time low at 68.80 against the dollar August last year owing to high capital outflows by foreign institutional investors, amid concerns over the US fed tapering programme. The RBI's restriction was not applicable on public sector firms like Oil India and ONGC Videsh.

The CNX Nifty is currently trading at 7700.85, down by 13.95 points or 0.18% after trading in a range of 7733.50 and 7661.30. There were 17 stocks advancing against 31 stocks declining while 2 stocks remained unchanged on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 1.43%, Asian Paints up by 1.17%, DLF up by 0.93%, HCL Tech. up by 0.92% and Bharti Airtel up by 0.92%. On the flip side, ACC down by 2.08%, Indusind Bank down by 2.03%, Jindal Steel down by 1.76%, United Spirits down by 1.68% and PNB down by 1.66% were the top losers.

The Asian equity indices were trading mixed; Straits Times increased 0.08%, Jakarta Composite increased 0.54%, Hang Seng increased 0.06% and Nikkei 225 increased 0.58%.

On the flip side, Taiwan Weighted decreased 0.17%, Shanghai Composite decreased 0.19%, FTSE Bursa Malaysia KLCI decreased 0.13% and KOSPI Index decreased 0.07%.

The European markets were trading in red; Germany’s DAX lost 0.06%, UK’s FTSE 100 was down by 0.06% while, France’s CAC 40 dropped 0.11%.