Benchmarks trade flat ahead of Union Budget

Indian equity benchmarks are trading flat-to-negative in early deals as investors adopted a wait-and-watch approach ahead of Finance Minister Arun Jaitley’s maiden Budget presentation later today. Expectations are already running high with respect to the announcement pro-growth reforms from the Finance Minister that will put India back on high growth trajectory. Market participants will also be eyeing the vision for a sustainable reduction in the fiscal deficit through a lower food and fertilizer subsidies and broadening tax base. Salary class will be eyeing the restructuring of tax slabs, though major reform is unlikely in view of the government’s tight liquidity condition, however some exemption can be expected under 80C.

On the global front, the US markets ended mostly higher in last session, reacting positively to earnings news from Alcoa and the minutes of the latest Federal Reserve meeting, which confirmed the Fed’s plan to completely unwind its asset purchase by October as long the economy continues to pick up. The Asian markets were trading mostly in the green at this point of time as investors speculated that increasing Chinese exports and imports signaled growth in the world’s second-largest economy is stabilizing too supported the upsurge.

Back home, on the sectoral front, metal, power and infrastructure witnessed the maximum gains in trade, while healthcare, fast moving consumer goods and software remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 676 shares on the gaining side against 1,160 shares on the losing side while 45 shares remain unchanged.

The BSE Sensex opened at 25513.74; around 69 point higher compared to its previous closing of 25444.81, and has touched a high and a low of 25535.79 and 25402.84 respectively. The index is currently trading at 25443.42, down by 1 points or 0.01%. There were 12 stocks advancing against 18 declines on the index.

The overall market breadth has made a weak start with 35.94% stocks advancing against 61.67% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices up by 0.31% and 0.70% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 0.63%, Power up by 0.47%, Infrastructure up by 0.33%, Realty up by 0.17% and Capital Goods up by 0.16%, while Healthcare down by 0.87%, FMCG down by 0.56%, IT down by 0.39%, TECk down by 0.36% and Consumer Durables was down by 0.23% were the top losers on the sectoral index.

The top gainers on the Sensex were HDFC up by 1.79%, Hindalco up by 1.64%, Coal India up by 1.60%, Tata Power up by 1.46% and Tata Motors up by 1.16%. On the flip side, Cipla was down by 1.98%, M&M was down by 1.55%, Dr Reddys was down by 1.30%, TCS was down by 0.89% and ONGC was down by 0.86% were the top losers on the Sensex.

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 opened at 7,589.50; about 4 points higher as compared to its previous closing of 7,585.00, and has touched a high and a low of 7,607.25 and 7,559.40 respectively. The index is currently trading at 7,576.45, down by 8.55 points or 0.11%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Hindalco up by 1.82%, HDFC up by 1.71%, Coal India up by 1.48%, Tata Power up by 1.31% and Tata Motors up by 1.14%. On the flip side, Tech Mahindra down by 2.53%, Cipla down by 1.97%, Lupin down by 1.60%, Dr Reddy down by 1.41% and M&M down by 1.24% were the major losers on the index.

Asian markets were trading mostly in the red; Hang Seng gained 79.33 points or 0.34% to 23,255.40, KOSPI Index increased by 5.04 points or 0.25% to 2,005.54, Straits Times improved 8.31 points or 0.25% to 3,283.77, Jakarta Composite soared 108.93 points or 2.17% to 5,133.64, Shanghai Composite surged by 4.30 points or 0.21% to 2,042.92, FTSE Bursa Malaysia KLCI added 1.21 points or 0.06% to 1,892.37 and Taiwan Weighted was up by 70.53 points or 0.74% to 9,560.51.

On the flip side, Nikkei 225 tumbled by 27.32 points or 0.18% to 15,275.33.