Benchmarks snap five days gaining streak

Snapping their five days gaining streak, Indian equity benchmarks ended the choppy day of trade in red terrain on Thursday as investors opted to book some profit of the table after a slew of rallies amid sluggishness in other global markets. Domestic bourses made a choppy start and the indices even went on to test important psychological 27,000 (Sensex) and 8,050 (Nifty) levels, but the key gauges got some support near those intraday low levels as they trimmed their losses from thereon as investors continued hunt for fundamentally strong stocks.

Overall, sentiment on the street remained down-beat on a report of World Economic Forum (WEF), which has ranked India among the worst-ranked countries when it comes to taxation and inflation burden on economy. As per the report, India ranks 133rd in terms of inflation, 130th for taxes and 131st for starting a business, while India has slipped to 71st position -- the lowest among BRICS countries, in global competitiveness list. However, losses remained capped as RBI has permitted ECB lenders for extending loans in Indian Rupees to domestic businesses. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1288.57 crore on September 03, 2014.

Global cues too remained sluggish with European counters opened mostly in the red, with investors adopting a wait-and-see approach ahead of key policy announcements from the European Central Bank and the Bank of England. Asian markets too ended mostly in the negative terrain with many of the indices retreating from a one-month high before central banks in Japan and Europe decide monetary policy.

Back home, selling in realty counter mainly dampened the sentiments, led by plunge of DLF stocks, which cracked by over 8.50% after Punjab and Haryana High Court cancelled a 350-acre plot of land that DLF had acquired from Haryana. Traders also offloaded stocks related to banking sector after RBI permitted ECB lenders for extending loans in Indian Rupees to domestic businesses, a move which would add to the competition for local banks, which are already facing poor credit off-take by India Inc. Additionally, public sector oil marketing companies (OMCs) declined as Brent crude oil futures surged on September 3, 2014.

The NSE’s 50-share broadly followed index Nifty declined by around twenty points and ended tad below the psychological 8,100 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by over fifty points to finish below the psychological 27,100 mark. Broader markets too struggled to get some traction and ended the session mixed. The market breadth remained in favour of decliners, as there were 1246 shares on the gaining side against 1715 shares on the losing side while 98 shares remain unchanged.

Finally, the BSE Sensex declined by 54.01 points or 0.20%, to 27085.93, while the CNX Nifty lost 18.65 points or 0.23% to 8,095.95.

The BSE Sensex touched a high and a low of 27169.12 and 26972.39, respectively. The BSE Mid cap index was up by 0.11%, while the Small cap index was down by 0.36%.

The top gainers on the Sensex were Bajaj Auto up by 3.25%, NTPC up by 1.93%, Hero MotoCorp up by 1.83%, HDFC up by 1.51% and Axis Bank up by 0.74%. On the flip side, BHEL down by 4.44%, Hindalco down by 3.40%, Tata Steel down by 3.14%, Tata Motors down by 1.88% and GAIL India down by 1.60% were the top losers in the index.

On the BSE Sectoral front, Healthcare up by 0.49%, FMCG up by 0.26%, Consumer Durables up by 0.13% and Auto up by 0.11% were the only gainers, while Realty down by 4.42%, Metal down by 1.50%, Capital Goods down by 1.00%, Oil & Gas down by 0.53% and PSU down by 0.51% were the top losers in the space.

Meanwhile, the government has cleared 22 FDI proposals worth Rs 3,249 crore, including investment proposals of KSK Energy Ventures, Telenor Mobile, InterGlobe Aviation among 19 others. These proposals have been cleared following recommendations of the Foreign Investment Promotion Board (FIPB).

KSK Energy Ventures’ proposal, with 74.94% foreign equity and entailing investment of Rs 1,050 crore, has been given permission to issue and allot warrants to foreign promoters. Additionally, Norway-based Telenor, through Telenor South Asia Investment Pte (Singapore), has got government's nod to increase its shareholding in Telewings Communication (Uninor) to 100% from the existing 74%. The proposal is worth Rs 78 crore.

Besides, FIPB has also cleared the proposal of IndiGo’s holding company, InterGlobe Aviation, which would clear the way for fresh Foreign Direct Investment (FDI) in air carrier IndiGo and make roads for the company to hit the primary market. In a cashless transaction, InterGlobe Aviation will issue 147,000 equity shares having face value of Rs 1,000 to NRI owners of Caelum in proportion to the voting units held by them.

Further, government also has given green signal to Credit Investment trust’ proposal seeking foreign investment of up to Rs 500 crore by Religare India Credit Assets Fund, Netherlands in the Class A units of Religare Credit Opportunities Fund Scheme I, an AIF Category II Fund. Meanwhile, other proposals which have been cleared include that of Gurgaon-based Baxter (India) (pharma firm), ARKRAY Healthcare (pharma), Verdant Telemetry & Antenna Systems (defence), Genpact India (IT) and Innisfree Cosmetics India (trading).

The CNX Nifty touched a high and low of 8,114.80 and 8,060.90 respectively.

The top gainers of the Nifty were Bajaj Auto up by 3.63%, Hero MotoCorp up by 2.42%, Power Grid Corporation of India up by 2.09%, NTPC up by 1.79% and HDFC up by 1.58%. On the other hand, DLF down by 8.15%, BHEL down by 4.29%, Jindal Steel & Power down by 3.93%, Hindalco Industries down by 3.28% and Tata Steel down by 2.96% were the top losers.

Most of European markets were trading in red, France's CAC 40 was down by 0.34% and Germany's DAX was down by 0.55%, while United Kingdom's FTSE 100 was up by 0.13%.

Asian markets ended mostly in red on Thursday, with the benchmark index retreating from a one-month high. China’s stocks rose, sending the benchmark indices to a 15-month high, as real-estate and financial companies gained on speculation the government is loosening financing curbs. The Bank of Japan board decided by a unanimous vote to leave the bank’s policy target unchanged, as expected, keeping its cautiously optimistic economic outlook despite recent soft retail sales. Under the current easing framework, the BoJ is committed to doubling the sum of money in circulation and deposited at the central bank in two years from 138 trillion yen at the end of 2012. Japanese Prime Minister Shinzo Abe’s new cabinet appointments signal his determination to deliver on pledges to overhaul the pension system and bring more women into the workforce. South Korea’s gross domestic product rose less-than-expected last month. South Korean GDP rose to a seasonally adjusted 0.5%, from 0.6% in the preceding month.