Benchmarks trim gains; indices gyrate near neutral line

Indian equity benchmarks trimmed gains and are hovering near the neutral line in the late afternoon session on account of profit booking in frontline blue chip counters. Traders were seen piling up positions in IT, TECK and Consumer Durables while selling was witnessed in Realty, Power and Oil & Gas sector stocks. In scrip specific development, Jet Airways was trading firm after the airline stated that it will look at selling planes and restructuring its debts as it tries to find ways to end the losses that have plagued it for years. Bank of Baroda was trading in green after the Reserve Bank of India lifted curbs on foreign investors to buy shares. On the global front, the Asian markets were trading mostly in green, while the European markets too traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,750 and 26,000 levels respectively. The market breadth on BSE was negative in the ratio of 1039:1797 while 84 scrips remained unchanged.

The BSE Sensex is currently trading at 26030.59, up by 4.79 points or 0.02% after trading in a range of 26188.64 and 26000.40. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.57%, while Small cap index down by 1.13%.

The gaining sectoral indices on the BSE were IT up by 1.37%, TECK up by 1.02%, Consumer Durables up by 0.03% and Capital Goods up by 0.01%, while, Realty down by 1.20%, Power down by 0.61%, Oil & Gas down by 0.58%, Metal down by 0.57% and India Infrastructure Index down by 0.49% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.28%, Hindalco up by 1.94%, TCS up by 1.27%, Bajaj Auto up by 1.23% and Wipro up by 1.22%. On the flip side, Tata Steel down by 1.80%, Tata Power down by 1.44%, Tata Motors down by 1.36%, Axis Bank down by 1.27% and Gail India down by 0.96% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has relaxed Rs 1-lakh ceiling on loans for non-agricultural purposes against gold jewellery. Borrowers can now pledge their gold and get a higher value of loans, provided that the loan-to-value (LTV) ratio does not exceed 75% of the cost of the gold.

The RBI’s notification highlighted that banks, as per their board-approved policy, may decide upon the ceiling with regard to the quantum of loans that may be granted against the pledge of gold jewellery and ornaments for non-agricultural end uses. The central bank further notified that the LTV of 75% should be maintained throughout the tenure of the loan and computed against the total outstanding in the account including accrued interest and current value of gold jewellery accepted as security/collateral.

The move is likely to monetize the household gold holdings in India by encouraging people to bring out their gold holdings. It will also protect the interest of the customers who can continue to opt for gold loans based on merits of the player rather than purely based on LTV ratios. Furthermore, this initiative may help commercial banks increase their retail secured lending portfolio.

Earlier, in December, RBI had stipulated a ceiling of Rs 1 lakh and a bullet repayment of loans clause which means payment of both the interest and the principal at one time.

The CNX Nifty is currently trading at 7763.85, down by 4.00 points or 0.05% after trading in a range of 7809.20 and 7752.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 2.42%, Infosys up by 2.41%, Hindalco up by 1.99%, TCS up by 1.40% and Wipro up by 1.32%. On the flip side, Ultratech Cement down by 2.60%, Ambuja Cement down by 2.51%, IDFC down by 2.11%, Grasim Industries down by 2.03% and ACC down by 1.94% were the top losers.

Most of Asian markets were trading in positive territory; with Shanghai Composite edging higher by 0.14%; FTSE Bursa Malaysia KLCI inching higher by 0.02%; Straits Times adding 0.65%; Jakarta Composite gaining 0.21%; Taiwan Weighted rising 0.62% and Hang Seng advancing by 0.80%.

On the flip side, Nikkei 225 declining by 0.10% and KOSPI Index edging lower by 0.03%.

The European markets were trading in green; Germany’s DAX was up by 0.47%, France’s CAC 40 added 0.46% while, UK’s FTSE 100 gained 0.05%.