Benchmarks trim losses; trade continues in red

Indian equity benchmarks trimmed losses but continued their weak trade in the late afternoon session taking cues from weak regional counterparts. The sentiments were under pressure after industry body FICCI lowered Indian GDP growth forecast to 5.3% for the current fiscal, as compared to 5.5% growth projected earlier. Investors also took note of Economic Survey FY14 which highlighted inflation and growth concerns. Traders were seen piling up positions in Oil & Gas, FMCG and PSU, while selling was witnessed in Auto, IT and TECK sector stocks. In scrip specific development, Petronet LNG, which imports liquefied natural gas and sets up LNG terminals in India, was trading in red after foreign brokerage firm downgraded the stock to underweight. State Bank of India (SBI), the largest lender in India, was trading in green after foreign brokerage firm stated that the stock could be worth Rs 4,500-5,000 by FY18, implying 65-85 percent upside potential.

On the global front, the Asian markets were trading mostly in red, while the European markets traded mostly on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,650 and 25,600 levels respectively. The market breadth on BSE was negative in the ratio of 932:1862 while 98 scrips remained unchanged.

The BSE Sensex is currently trading at 25,545.92 down by 36.19 points or 0.14% after trading in a range of 25,683.97 and 25,369.21. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.37%, while Small cap index down by 0.85%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.04%, FMCG up by 0.97%, PSU up 0.39%, Consumer Durables up by 0.28% and Bankex up by 0.23%. On the flip side, Auto down by 1.90%, IT down by 1.13%, TECK down by 0.83%, HealthCare down by 0.76% and Capital Goods down by 0.48% were the losing indices on BSE.    

The top gainers on the Sensex were Hindalco Industries up by 2.64%, BHEL up by 2.02%, ONGC up by 2.02%, ITC up by 1.80% and Tata Steel up by 1.46%. On the flip side, M&M down by 3.48%, TCS down by 2.23%, Bajaj Auto down by 2.18% Coal India down by 1.95% and Tata Power down by 1.90% were the top losers on the BSE. 

Meanwhile, the Securities and Exchange Board of India has notified that overseas companies owned by NRIs or persons of Indian origin (PIOs) can act as investment manager for newly created class of overseas investors, namely foreign portfolio investors (FPIs).

However, the market regulator stated that the company should be well regulated in their jurisdiction to get registered as Category II FPI for acting as investment manager for other FPIs. At present, a company which is majority owned by one or more NRI/PIOs is not eligible to make investments as a foreign portfolio investor (FPI).

FPI includes all foreign institutional investors (FIIs), their sub-accounts and qualified foreign investors (QFI) under a new regime which has been effective from June 1. The FPIs are divided into three categories as per their risk profile and know your client (KYC) requirements.  Category-I FPIs is the lowest risk category and includes foreign governments and government-related foreign investors. Category-II FPIs include appropriately regulated entities, broad-based funds whose investment manager is appropriately regulated, university funds, university-related endowments and pension funds. Category-III FPIs compromise all others not eligible under the first two categories.

The CNX Nifty is currently trading at 7,615.30 down by 7.90 points or 0.10% after trading in a range of 7,650.10 and 7,551.65. There were 24 stocks advancing against 26 declining ones on the index.

The top gainers of the Nifty were IDFC up by 2.99%, BPCL up by 2.62%, Hindalco Industries up by 2.37%, ONGC up by 2.24% and BHEL up by 2.08%. On the flip side, M&M down by 3.95%, Jindal Steel down by 2.84%, Tata Power down by 2.45%, TCS down by 2.30% and Coal India down by 2.08% were the major losers on the index.

Most of the Asian equity indices were trading mostly in red; Hang Seng down by 1.55%, Nikkei 225 down by 0.08%, Straits Times down by 0.25%, Shanghai Composite down by 1.23% and Taiwan Weighted down by 0.43% while, Jakarta Stock Index up by 0.72%.

The European markets were trading mostly in green; Germany’s DAX added 0.07%, France’s CAC 40 gained 0.05% while, UK’s FTSE 100 was down by 0.34%.