Benchmarks trade cautiously in early deals

Indian equity benchmarks have made a cautious start pressurized by weak cues from regional counterparts. The Asian markets were trading mostly in the red terrain at this point of time as the valuation has climbed to the highest level this year. The US markets ended in green with the S&P 500 rising above 2,000 for the first time. Although the economic news were not that good, as the sales of new single-family homes fell 2.4 percent in July, but traders took cues from European markets which rose on hopes for stimulus.

Back home, sentiments also remained dampened after the Supreme Court held that guidelines were breached in coal block allocations during the UPA government and that the terms of allotment, going as far back as 1993, were themselves illegal. Stocks remained to banking sector too remained under pressure as the Reserve Bank of India Governor Raghuram Rajan has cautioned finance secretaries of state governments against debt waiver schemes as banks are already starved of capital.

On the sectoral front, fast moving consumer goods, consumer durables and software witnessed the maximum gains in trade, while power, capital goods and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices too were trading choppy in early deals, while the market breadth on the BSE was positive; there were 1011 shares on the gaining side against 986 shares on the losing side while 68 shares remain unchanged.

The BSE Sensex opened at 26349.87; around 70 points lower as compared to its previous closing of 26419.55, and has touched a high and a low of 26481.97 and 26331.83 respectively. The BSE Sensex is currently trading at 26470.58, up by 33.56 points or 0.13%. There were 17 stocks advancing against 13 stocks declining on the index.

The overall market breadth remained in the favour of advances with 48.96% stocks advancing against 47.75% declines. The broader indices were trading mixed; the BSE Mid cap index was up by 0.24%, while Small cap index down by 0.01%.

The gaining sectoral indices on the BSE were FMCG up by 0.92%, Consumer Durables up by 0.63%, IT up by 0.63%, TECK up by 0.62% and Metal was up by 0.25% while, Power down by 1.43%, Capital Goods down by 0.70%, PSU down by 0.52%, Infrastructure down by 0.48% and Oil & Gas was down by 0.40% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Industries up by 2.17%, Tata Steel up by 1.94%, Cipla up by 1.44%, Bharti Airtel up by 1.25% and Dr. Reddys Lab was up by 1.19%. On the flip side, Tata Power down by 3.27%, BHEL down by 1.58%, NTPC down by 0.95%, Larsen & Toubro down by 0.94% and Sesa Sterlite was down by 0.89% were the top losers.

Meanwhile, According to Reserve Bank of India's (RBI) latest report, foreign direct investment inflows in Indian equity fell to $16.05 billion in 2013-14 from $18.29 billion in 2012-13 and $23.47 billion in 2011-12. However, during 2013-14, overall FDI inflows in India rose by 8% to $24.29 billion as against $22.42 billion in FY13.

Further, overall FDIs, during the first quarter of FY15, jumped by 34 percent to $7.23 billion from $5.39 billion recorded in the corresponding period of the previous fiscal. Country wise, maximum FDI during the reported period was received form Mauritius at $2.61 billion, followed by Singapore ($1.18 billion), the UK ($567 million), Japan ($695 million) and the US ($249 million).

The report also revealed that Singapore has overtaken Mauritius as the largest source of foreign equity inflows into India. Investments from Singapore amounted to $4.42 billion in 2013-14 as compared to $3.69 billion from Mauritius. During 2009-10, FDI inflows from Mauritius recorded at $9.8 billion.

FDI is considered crucial for India and to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. Recently, the government has raised the foreign investment limit to 49 percent in defence manufacturing and also relaxed the policy in railway and construction sector.  Furthermore, India requires around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth.  

The CNX Nifty opened at 7,874.50; around 22 points lower as compared to its previous closing of 7,906.30, and has touched a high and a low of 7915.45 and 7871.65 respectively.

The CNX Nifty is currently trading at 7912.55, up by 6.25 points or 0.08%. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds. up by 2.10% and Tata Steel up by 1.89% and Tech Mahindra up by 1.57% and Dr. Reddys Lab up by 1.39% and Cipla up by 1.27%. On the flip side, Jindal Steel & Power down by 6.37%, Tata Power down by 3.43%, BHEL down by 1.92%, ACC down by 1.87% and Ambuja Cement down by 1.62% were the top losers.

Asian markets were trading mostly in the red; Nikkei 225 crumbled by 78.64 points or 0.50% to 15,534.61, Shanghai Composite tumbled by 9.76 points or 0.44% to 2,219.52, Jakarta Composite dropped by 23.19 points or 0.45% to 5,161.76. Hang Seng slipped 31.95 points or 0.13% to 25,134.96, FTSE Bursa Malaysia KLCI declined by 0.35 points or 0.02% to 1,861.96 and Straits Times was down 3.88 points or 0.12% to 3,326.40.

On the flip side, KOSPI Index rose by 8.78 points or 0.43% to 2,069.67, and Taiwan Weighted was up by 5.32 points or 5.32% to 9,395.94.