Markets pare some early losses; Sensex trades below 28400 level

Indian bourses continued to trade in red in the afternoon session as selling momentum in the equities persisted, however the losses were capped and marginal recovery from day's low levels was seen as buying appeared in FMCG stocks. Though, profit booking after recent gains dragged the major indices down and most of the major sectoral indices were trading in red with metal and realty as the top losing indices trading down by over 2.20%. Investors also opted to remain on sidelines ahead of the expiry of futures and options contract on Thursday. Sell-off continued in the broader markets with both the mid and small cap indices trading down by over 1.80%. However, market losses remained capped as sentiments got some support as Minister of State for Finance Jayant Sinha asserted that the government is working very hard to pass the GST bill in current session so that the new tax regime could be rolled out by April 1, 2016.

TV Today Network, extending its previous day’s 4% gain has surged over 9% to Rs 218 after Derive Investments, an investment company, bought a stake in the company in a block deal in the previous session. Further, share of JK Tyre and Industries has gained 3% to Rs 568 after the foreign institutional investors (FIIs) bought shares of the company through open market.

On global front, Asian markets were trading mixed with Nikkei 225 up by 0.19% to 17,390.46 and Hang Seng decreased 0.21%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,400 and 28,000 levels respectively. The market breadth on BSE was negative, out of 2,615 stocks traded, 577 stocks advanced, while 1,968 stocks declined on the BSE.

The BSE Sensex is currently trading at 28382.83, down by 116.71 points or 0.41% after trading in a range of 28311.32 and 28541.22. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.81%, while Small cap index down by 2.29%.

The gaining sectoral index on the BSE was FMCG up by 0.29%. On the other hand, Realty down by 2.90%, Metal down by 2.27%, Power down by 1.90%, INFRA down by 1.77% and Consumer Durables down by 1.70% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.46%, Bharti Airtel up by 1.08%, Wipro up by 0.79%, HDFC up by 0.72% and Infosys up by 0.59%. On the flip side, Tata Steel down by 2.93%, Hindalco down by 2.27%, Tata Power down by 2.02%, Larsen & Toubro down by 1.84% and ICICI Bank down by 1.75% were the top losers.

Meanwhile, amid concerns over increasing misuse of Offshore Derivative Instruments (ODI) or P-Notes for money laundering and other such purposes, the Securities and Exchange Board of India (SEBI) has notified that foreign portfolio investments coming in through ODI route will now be aligned with the eligibility and investment norms applicable to foreign portfolio investors (FPI).

P notes used by investors or hedge funds that are not registered with the Securities and Exchange Board of India to invest in Indian through registered foreign institutional investors. Any dividends or capital gains collected from the underlying securities go back to the investors.The investments through P-Notes in India rose to nearly seven-year high of over Rs 2.65 lakh crore by the end of October 2014.

SEBI clarified that an FPI shall issue ODIs only to those subscribers which meet the eligibility criteria as laid down in SEBI’s FPI Regulation 4 which stated that an FPI applicant shall not be granted registration unless the entity is the resident of a country whose securities market regulator is a signatory to International Organization of Securities Commission’s (IOSCO). SEBI further clarified that investment restrictions applicable to foreign portfolio investors would also apply to ODIs. Two or more ODI subscribers having common Beneficial Owner (BO) will be considered together as a single ODI subscriber, in the same manner as is being done in the case of FPIs.

Further, the market regulator noted that foreign portfolio investor or FPI can issue ODIs, which predominantly comprise of participatory notes (P-notes), only to those subscribers that do not have an opaque structure. Foreign funds with 'opaque' structures would not be allowed to come in under the new FPI regime.

The CNX Nifty is currently trading at 8475.85, down by 54.30 points or 0.64% after trading in a range of 8455.70 and 8535.35. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.65%, BHEL up by 1.77%, Wipro up by 0.91%, Bharti Airtel up by 0.89% and HDFC up by 0.67%. On the flip side, Power Grid Corpn down by 3.65%, NMDC down by 3.56%, Jindal Steel & Power down by 3.29%, DLF down by 3.02% and Tata Steel down by 2.90% were the top losers.

Asian markets were trading mixed, KOSPI Index up by 1.67 points or 0.08% to 1,980.21, Straits Times up by 3.01 points or 0.09% to 3,343.54, FTSE Bursa Malaysia KLCI up by 5.51 points or 0.3% to 1,839.28, Shanghai Composite up by 19.7 points or 0.78% to 2,552.58 and Nikkei 225 up by 32.95 points or 0.19% to 17,390.46. While Hang Seng decreased 50.72 points or 0.21% to 23,842.42, Jakarta Composite decreased 15.92 points or 0.31% to 5,125.84 and Taiwan Weighted decreased 6.09 points or 0.07% to 9,116.24