Benchmarks hold modest gains after recovering from day’s low

After recovering from day’s low, benchmark equity indices were holding their head above water and trading up with modest gains of around 0.04%-0.08%, on emergence of buying by funds and retail investors in select stocks. Sentiment on the street improved after Organization for Economic Cooperation and Development (OECD) pointed that economy is coming out of its worst slowdown in a quarter-century and implementation of new reforms held the key for putting the economy on a strong and sustainable growth path of 8%. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 71.80 crore on November 19, 2014. However, gains remained capped as investors remained cautious ahead of the winter session of parliament which begins next week and RBI’s policy review due on December 2, 2014. On the sectoral front, stocks from information technology (IT), FMCG and Banking counters were supporting the markets’ uptrend, while those from Consumer Durables, Power and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of Indiabulls Securities gained as its wholly owned subsidiary - Indiabulls Distribution Services has acquired 100% of the share capital of India Land and Properties for a consideration of Rs 600 crore. Furthermore, Pennar Industries rose as RBI increases foreign institutional investors' investment limit in the company to 35% of its paid-up capital.

On global front, Asian stocks mostly fell as the China flash HSBC/Markit manufacturing purchasing managers' index showed factory output contracted in the world's second-biggest economy for the first time in six months. Back home, Indian rupee slumped to its lowest level in nine months, tracking the dollar's strength against major currencies and other Asian peers, while state-owned banks' dollar demand for Iran oil payments also weighed.

The market breadth on BSE was negative, out of 2363 stocks traded, 1131 stocks advanced, while 1151 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28043.85 up by 11.00 points or 0.04% after trading in a range of 28118.53 and 27969.57. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15%, while Small cap index gained 0.15%.

The gaining sectoral indices on the BSE were IT up by 0.45%, TECK up by 0.38%, FMCG up by 0.32%, Bankex up by 0.22% and Oil & Gas up by 0.09% while, Consumer Durables down by 1.38%, Power down by 0.56%, Capital Goods down by 0.40%, Realty down by 0.32% and Metal down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.94%, Hindalco up by 1.03%, Sun Pharma Inds. up by 1.00%, Cipla up by 0.99% and Infosys up by 0.71%. On the flip side, BHEL down by 1.32%, Tata Motors down by 1.15%, HDFC Bank down by 0.95%, Hero MotoCorp down by 0.89% and Axis Bank down by 0.80% were the top losers.

Meanwhile, Market regulator, the Securities and Exchange Board of India (SEBI) has tightened the noose around the Insider Traders and has announced measures to improve the integrity of the capital markets by enlarging the definition of those who could qualify to be charged under the law for insider trading, making it tougher for anyone with access to unpublished price sensitive information to make illegitimate gains.

The new rules announced by SEBI based on a report by Justice N K Sodhi, a retired chief justice of Karnataka and Kerala high court, that was finalized in December 2013 and was put up for public comments, make it tougher for people in addition to promoters, directors and some top officials, having price-sensitive information to trade in the market for quick gains. Sebi’s new rules on insider trading now also include all people who are in possession of information which are generally not available to public and which may impact the price of a stock, called unpublished price sensitive information (UPSI).

Sebi further said that insiders having access of UPSI round the year can have a pre-scheduled trading plans that should be disclosed to stock exchanges and should be adhered to strictly. Immediate relatives of people with access to UPSI will be presumed to be connected persons, though as a safeguard they have been given a right to rebut the presumption. However SEBI said that the requirement of communication of UPSI in the case of legitimate business transaction is recognised in law and a carve-out with safeguards has been provided.

The market regulator has also made the delisting rules stricter and said that for a delisting to be considered successful, shareholding of the acquirer together with shares tendered by public shareholders must reach at least 90 percent of the total share capital of the company. The second condition to be fulfilled is that at least 25 per cent of the public shareholders tender their shares in a reverse book building process. SEBI has reduced the timeline for completing the process of delisting to 76 working days from 117 working days.

Sebi’s board has also given its nod to the proposal to review the policy that can restrict a company, its promoters or directors who are categorized as wilful defaulters from raising capital. The policy may be accepted after going through a public consultation process.

The CNX Nifty is currently trading at 8388.85 up by 6.55 points or 0.08% after trading in a range of 8410.10 and 8366.55. There were 19 stocks advancing against 31 declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 5.88%, SBI up by 2.11%, Cipla up by 1.08%, Hindalco up by 1.07% and Sun Pharma up by 0.96%. On the flip side, Power Grid down by 1.33%, BHEL down by 1.28%, Tata Motors down by 1.27%, Indusind Bank down by 1.17% and Ambuja Cement down by 1.04% were the top losers.

Asian markets were trading mostly in the red; Jakarta Composite declined 1.05%, Straits Times decreased 0.20%, KOSPI Index dropped 0.46%, FTSE Bursa Malaysia KLCI slipped 0.19% and Shanghai Composite was down by 0.1%. On the other hand, Hang Seng rose 0.15%, Nikkei 225 increased 0.35% and Taiwan Weighted was up by 1.15%.