Benchmarks trim losses; trade gyrates around neutral line

Indian equity markets trimmed losses and started gyrating around the neutral line in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on weak note following RBI’s deputy governor’s hawkish statements, HR Khan, who pouring cold water on hopes of rate cut in upcoming monetary policy, highlighted that recent decline in inflation did not mean the decline was permanent. Traders were seen piling positions in FMCG, Consumer Durables and Power sector while selling was witnessed in Capital Goods, Oil & Gas and Auto sector stocks. Shares of companies belonging to the rail sector were trading firm after the appointment of a new railway minister. In scrip specific development, Kingfisher Airlines and UB Engineering were both locked at lower circuit limit after top exchanges -- BSE and NSE -- announced suspension of trading in the shares of these firms from next month. ING Vysya Bank was trading firm after the Reserve Bank of India lifted its curb for foreign investors to buy the stocks of the bank as the aggregate shareholding in the bank by foreign investors had gone below the prescribed threshold caution limit under the FDI policy.

On the global front, the Asian markets were trading mostly in green while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,300 and 27,800 levels respectively. The market breadth on BSE was negative in the ratio of 1381:1438 while 131 scrips remained unchanged.

The BSE Sensex is currently trading at 27860.71, down by 7.92 points or 0.03% after trading in a range of 27764.75 and 28027.96. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.28%, while Small cap index up by 0.22%.

The gaining sectoral indices on the BSE were FMCG up by 2.44%, Consumer Durables up by 0.46%, Power up by 0.32%, Realty up by 0.32% while, Capital Goods down by 0.97%, Oil & Gas down by 0.62%, Auto down by 0.53%, PSU down by 0.43%, Bankex down by 0.40% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 3.63%, Sun Pharma up by 3.01%, Coal India up by 1.54%, BHEL up by 1.41% and Hero MotoCorp up by 0.95%. On the flip side, ONGC down by 3.01%, Larsen & Toubro down by 2.19%, Tata Motors down by 2.11%, Axis Bank down by 1.82% and Hindalco down by 1.79% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has asserted that India will amend tough land acquisition and bring tax reforms to boost investments and kick start the domestic economic growth. Highlighting importance of business friendly regulations in the country, Arun Jaitley stated that there is a need to change tough land acquisition law to speed up the process of buying land for industrial use, a contentious issue in India which has long delayed projects.

Finance Minister also promised a reasonable, non-aggressive and rational tax policy to make India a hub of low-cost manufacturing. On the insurance sector, Jaitley expressed hope that the long-pending Insurance Amendment Bill, that seeks to raise FDI in the sector from existing 26 percent to 49 percent, will get Parliament nod in the upcoming Winter Session. Regarding the Goods and Services Tax (GST), Jaitley stressed that the government is in the final stages of talks with states on the issue, hinting that amendments to GST may be introduced in the Winter session of Parliament.

On ambitious divestment programme in public sector banks, Finance Minister Arun Jaitley emphasized that the government is planning to bring down its stake in public sector banks to 52 percent so that a large amount of capital, almost close to Rs 3 lakh crore, can be introduced into banks.

The CNX Nifty is currently trading at 8338.95, up by 1.95 points or 0.02% after trading in a range of 8304.45 and 8383.05. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were ITC up by 3.84%, Sun Pharma up by 2.71%, Bank of Baroda up by 2.19%, Lupin up by 1.52% and Coal India up by 1.48%. On the flip side, ONGC down by 3.12%, Jindal Steel & Power down by 2.88%, Larsen & Toubro down by 2.35%, Tata Motors down by 2.12% and Hindalco down by 1.95% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.25 points or 0.18% to 1,827.44, Straits Times increased 17.77 points or 0.54% to 3,304.16, KOSPI Index increased 18.36 points or 0.95% to 1,958.23, Shanghai Composite increased 55.5 points or 2.3% to 2,473.67, Taiwan Weighted increased 137.36 points or 1.54% to 9,049.98 and Hang Seng increased 194.46 points or 0.83% to 23,744.70.

On the other hand, Nikkei 225 decreased 99.85 points or 0.59% to 16,780.53 and Jakarta Composite decreased 14.65 points or 0.29% to 4,972.77.

The European markets were trading in green; France’s CAC increased 24.55 points or 0.59% to 4,214.44, Germany’s DAX increased 28.77 points or 0.31% to 9,320.60 and UK’s FTSE 100 increased 27.71 points or 0.42% to 6,594.95.