Key bourses continue to hover near neutral line

The Indian equity markets came off from the highs of the day and are hovering near their neutral lines as index heavyweight Reliance Industries (RIL) reversed its initial gains. Investors were trading cautiously as there was no prominent trigger to warrant any strong buying. On sectoral front public sector undertaking, capital goods and metal stocks were attracting attention. While auto, technology and fast moving consumer goods stocks were reeling under pressure. Moreover, investors wary about quarterly earnings that begins to roll out from next week. High interest rates and sluggish consumer spending are expected to weigh on the results of many companies, while concerns remain about the impact of the euro zone debt crisis on the global economy. However, broader indices continue to out perform benchmark and the overall market breadth on BSE is in the favour of advances which have thrashed declines in the ratio of 1425:667, while 95 shares remained unchanged.

The BSE Sensex is currently trading at 15,925.59, down by 13.77 points or 0.09%. The index has a touched a high and low of 15,992.16 and 15,887.38 respectively.  There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices jumped 0.70% and 0.82% respectively.

The top gainers on the index were PSU up 1.74%, Capital Goods up 1.27%, Metal up 0.78%, Bankex up 0.56% and Power up 0.53% while Auto down 1.16%, TECk down 0.26%, FMCG down 0.15% and IT down 0.01% were the only losers on the index.

The top gainers on the Sensex were ICICI Bank up by 2.86%, BHEL up by 2.60%, Tata Motors up 1.86%, Sterlite Industries was up by 1.85% and ONGC up by 1.35%.

On the flip side, Bajaj Auto down by 3.34%, M&M down 2.63%, Hero MotoCorp down 1.95%, Bharti Airtel down 1.70% and HUL down 1.46% were the top losers on the Sensex.

Meanwhile, the Securities and Exchange Board of India (SEBI) in its board meeting on January 3 announced two new means through which listed local firms could sell shares without floating a public issue. The move is likely to prove helpful in expediting the government's disinvestment programme and also fast tracking the sale of promoters' equity in listed companies to meet minimum public shareholding norms. The new mechanisms, which are comparatively speedier, less expensive and secure methods of raising money for promoters, are expected to simplify the process of increasing public shareholding for domestic firms.

One of the mechanism created by SEBI for share sales is the institutional placement programme (IPP), which will allow promoters to sell up to 10 percent of their capital till they comply with the minimum public shareholding requirement of 25%. The IPP, which can be used for both fresh issuance of capital and dilution of stakes by the promoters, is a route through which shares can be offered only to qualified institutional buyers (QIBs) while at least 25% has to be reserved for mutual funds and insurance firms.

The other mechanism introduced by the market regulator is offer for sale through stock exchanges which allows promoters to sell shares on the stock exchanges but from a separate window for auction that would be open during normal trading hours. Under this mechanism, the promoters will only be allowed to offer shares for sale while the bidders will be have to pay 100% margin in cash upfront against every buy order.

Amid the recent volatile stock market situation, the finance ministry had to abstain from divesting stakes in many state-owned companies like Oil and Natural Gas Corporation, Steel Authority of India and Indian Oil Corporation. But with the new norms in place, government can now look to reduce its fiscal deficit via stake sale of public sector units.

Moreover, in its bid to substantially reduce the time taken for completion of share buyback, the SEBI has revised the timeline for various activities involved in the share buyback process. Shareholders will be allowed to tender over-and-above their entitlement but acceptance of shares shall first be based on the entitlement of each shareholder. If any shares are still left to be bought back, acceptance of additional shares tendered over-and-above the entitlement shall be in proportion to the excess shares tendered by the shareholder.

The S&P CNX Nifty is currently trading at 4,765.25, lower by 0.05 points. The index has touched a high and low of 4,780.55 and 4,746.65 respectively. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were HCL Tech up by 3.17%, SAIL up by 3.10%, Sesa Goa up by 3.06%, ICICI Bank up by 2.77% and BHEL up by 2.38%.

On the flip side, Bajaj Auto down by 3.29%, Ambuja Cement down by 2.58%, M&M down 2.41%, ACC down 2.40% and Bharti Airtel down by 2.05% remained the top losers on the index.

Most of the Asian markets were trading in the green; Jakarta Composite was up 55.45 points or 1.44% to 3,913.33, Nikkei 225 was up 108.67 points or 1.29% to 8,564.02, Straits Times was up 12.79 points or 0.48% to 2,701.15, and Taiwan Weighted was up 23.96 points or 0.34% to 7,077.34.

On the flip side, Seoul Composite was down 4.25 points or 0.23% to 1,871.16, Shanghai Composite was down 5.96 points or 0.27% to 2,193.45 and Hang Seng was down by 54.73 points or 0.29% to 18,822.68.