Benchmarks trade choppy; traders eye IIP numbers

The Indian equity markets have made a soft start following weakening trend on other Asian bourses in line with overnight losses in the US market. Back home, fresh selling by funds, mostly of a profit-booking nature, and the cautious approach adopted by market players ahead of the release of Index of Industrial Production (IIP) data for November later in the day dragged down the Sensex. Meanwhile, IT bellwether Infosys beat market forecasts with a 33 percent rise in quarterly profit as a weak rupee boosted margins, but it cut its full-year revenue outlook because of the debt crisis in Europe, its second-biggest market. Infosys was down by about 7 percent. However, Kingfisher Airlines, Jet Airways and Spicejet continued to rally 4-6 percent each on hopes that FDI in aviation sector may be passed soon. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 965 shares on the gaining side against 467 shares on the losing side while 48 shares remained unchanged.

The BSE Sensex opened at 16,117.19; about 58 points lower compared to its previous closing of 16,175.86, and has touched a high and a low of 16,157.87 and 16,040.35 respectively.

The index is currently trading at 16,157.87, down by 17.99 points or 0.11%. There were 25 stocks advancing against just 5 declines on the index.

The overall market breadth has made a strong start with 65.20% stocks advancing against 31.55% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.63% and 0.26% respectively.

The top gaining sectoral indices on the BSE were, Bankex up by 2.01%, Realty up by 1.47%, Power up by 1.18%, PSU up by 1.11% and CG up by 1.01%. While IT down by 4.64% and TECk down by 3.29% were the only losers on the index.

The top gainers on the Sensex were SBI up by 2.38%, ICICI Bank up by 2.14%, NTPC up by 1.76%, BHEL up by 1.51% and Tata Power up by 1.45%.

On the flip side, Infosys was down by 6.23%, Wipro was down by 3.40%, TCS was down by 3.28%, HUL was down by 0.15% and M&M was down by 0.05% were the top losers on the Sensex.

Meanwhile, after getting some indications that India’s economic activity is re-gathering momentum with the manufacturing and services PMI signaling expansion, another confirmation of the fact came to the fore as Asia’s third largest economy registered sharp surge of 56 percent in foreign direct investment (FDI) in the month of November 2011. After two months of declining, inflow of foreign money into the nation stood at $2.53 billion in November as compared to $1.62 billion in the same month last year.

Meanwhile, cumulative FDI into India for the April-November period went up by 62.81 percent to $22.83 billion against $14.02 billion a year ago while it was also higher than $19.43 billion which came in the full fiscal year of 2010-11. With this kind of trend continuing till the end of current fiscal, the FDI in full fiscal year might even surpass the $30 billion mark which will positively impact the foreign exchange market.

The major sources of FDI for India are Mauritius, Singapore, the US, the UK, the Netherlands, Japan, Germany and the UAE. Sectors which attracted the maximum funds include services, construction activities, power, computers and hardware, telecom and housing and real estate.

Meanwhile, based on the recommendations of Foreign Investment Promotion Board (FIPB), government has approved twenty proposals of FDI amounting to around Rs 1,935.24 crore. The government cleared Sterlite Grid's Rs 1,150 crore proposal to act as an investment company. Besides, the board also cleared proposal of Equitas Micro Finance involving foreign investment of Rs 230 core and TV Vision's proposal to induct foreign investment worth Rs 200 crore by way of issue of equity shares though an IPO for undertaking the business of broadcasting a non-news and current affairs TV channel has also been cleared.

However, decision on 23 proposals including that of Rossell Aviation and Alliance Data Pte, Singapore, was deferred and 10 were rejected.  Meanwhile, one proposal relating to G4S Security Services was withdrawn and another of MNP Interconnection Telecom Solutions was noted. 

Further, the Ministry of Finance will consider 25 proposals including that of Ashok Leyland Defence Systems, Tata AutoComp GY Batteries, Singapore-based Amazon Asia-Pacific Resources, Italy-based Canali Holding, Timex Garments, Fluke South East Asia Pte, Deltronix India, Zipcash Card Services, JT International India, and Cigniti Technologies for overseas investment at the Foreign Investment Promotion Board (FIPB) meeting to be held on January 20.

The S&P CNX Nifty opened at 4,840.95; about 20 points lower compared to its previous closing of 4,860.95, and has touched a high and a low of 4,860.35 and 4,820.10 respectively.

The index is currently trading at 4,853.90, down by 7.05 points or 0.15%. There were 37 stocks advancing against 13 declines on the index.

The top gainers of the Nifty were Axis Bank up by 3.41%, PNB up by 3.13%, Kotak Bank up by 2.29%, SBI up by 2.08% and IDFC up by 1.95%.

On the flip side, Infosys down by 6.36%, TCS down by 3.39%, Wipro down by 3.00%, Cairn down by 1.95% and HCL Tech down by 1.38%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down 13.11 points or 0.57% to 2,272.63, Hang Seng was down 23.05 points or 0.12% to 19,128.89, Jakarta Composite was down 3.47 points or 0.09% to 3,906.17, Nikkei 225 was down 77.56 points or 0.92% to 8,370.32 and Taiwan Weighted was down by 3.89 points or 0.05% to 7,184.32.

On the flip side, Straits Times was up 6.61 points or 0.24% to 2,753.74 and Seoul Composite was up by 3.04 points or 0.16% to 1,848.59.