Benchmarks extend early losses; trade near intra-day low level

Indian equity benchmarks extended early losses and were trading near intra-day low level in late afternoon session on account of profit booking in frontline blue chip stocks such as Tata Steel, ITC and ICICI Bank among others. Further, weak global cues and heavy selling in realty, metal and power stocks ahead of F&O contract expiry on Thursday also dragged the major indices down. All major sectorial indices were trading in red with realty and metal as top losing indices. Selling was broad based with both mid and small cap indices were trading down by over 2%. Sector wise, shares of most of the frontline banks were trading lower between 1-4% on profit booking after rallying 20% in past one and half month. Shares of real estate companies were also under pressure and trading lower by up to 8%. Stock specific movement, Ricoh India has surged 5% to Rs 330 after the company said it received an order worth of Rs 1,370 crore from Department of Posts, Government of India.

On global front, Asian markets were trading mixed with Nikkei up by 0.29% to and Hang Seng decreased 0.21%. European markets also made negative opening. 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 2,929 stocks traded, 644 stocks advanced, while 2,201 stocks declined on the BSE.

The BSE Sensex is currently trading at 28294.70, down by 204.84 points or 0.72% after trading in a range of 28279.60 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 2.11%, while Small cap index down by 2.75%.

The losing sectoral indices on the BSE were Realty down by 3.86%, Metal down by 2.22%, INFRA down by 2.11%, Consumer Durables down by 2.02% and Power down by 2.00%.

The top gainers on the Sensex were BHEL up by 2.10%, HDFC up by 1.52%, Bharti Airtel up by 1.29%, HDFC Bank up by 1.19% and Infosys up by 0.50%. On the flip side, Tata Steel down by 3.56%, ITC down by 2.96%, Larsen & Toubro down by 2.18%, ICICI Bank down by 2.11% and Axis Bank down by 2.09% 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 8437.65, down by 92.50 points or 1.08% after trading in a range of 8437.55 and 8535.35. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were BHEL up by 1.98%, HDFC up by 1.65%, Zee Entertainment up by 1.61%, HDFC Bank up by 1.16% and Bharti Airtel up by 1.10%. On the flip side, ITC down by 4.79%, DLF down by 4.54%, Jindal Steel & Power down by 3.56%, Tata Steel down by 3.33% and NMDC down by 3.25% were the top losers.

Asian markets were trading mixed, KOSPI Index up by1.67 points or 0.08% to 1,980.21, Straits Times up by1.95 points or 0.06% to 3,342.48, FTSE Bursa Malaysia KLCI up by 6.14 points or 0.33% to 1,839.91, Shanghai Composite up by 34.72 points or 1.37% to 2,567.60, Nikkei 225 up by 50.11 points or 0.29% to 17,407.62, Hang Seng decreased 49.23 points or 0.21% to 23,843.91, Taiwan Weighted decreased 6.09 points or 0.07% to 9,116.24, Jakarta Composite decreased 0.29 points or 0.01% to 5,141.48.

European markets made negative opening. Germany’s DAX increased 4.41 points or 0.05% to 9,789.95. While, UK’s FTSE 100 decreased 7.64 points or 0.11% to 6,722.15 and France’s CAC decreased 6.72 points or 0.15% to 4,361.72.