Benchmarks trade choppy on F&O series expiry day

Benchmark indices have turned choppy after paring early gains as investors remained on the sidelines on December F&O series expiry day. Though, markets managed to keep their head above water as there is some solace for the government struggling to keep the fiscal deficit under control, the direct tax collections during April-November of this fiscal rose 5.67 percent to Rs 3.29 lakh crore over the same period a year ago. Also, pitching for a rate cut by the Reserve Bank, Chief Economic Adviser Arvind Subramanian has said that there is a need to boost investments to achieve the potential economic growth rate of 7-8 percent in the next few years. Industry body, Ficci too has said that interest rate reduction will boost investment cycle.

On the global front, the US markets made a mixed closing on Tuesday on getting similar kind of economic news flow. While, Commerce Department reported stronger than previously estimated third quarter GDP growth, it also showed unexpected decreases in durable goods orders and new home sales. The Asian markets were trading in the green at this point of time led by the Japanese market, which is up by over a percent in early deals on yean weakness.

Back home, on the sectoral front, realty, auto and capital goods witnessed the maximum gain in trade, while infrastructure, consumer durables and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices too were trading slightly in the green, while the market breadth on the BSE was positive; there were 967 shares on the gaining side against 822 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex is currently trading at 27510.58, up by 4.12 points or 0.01% after trading in a range of 27467.91 and 27571.25. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index up by 0.14%.

The gaining sectoral indices on the BSE were Realty up by 0.49%, Auto up by 0.20%, Capital Goods up by 0.19%, FMCG up by 0.18% and Bankex up by 0.10% while, Infrastructure down by 0.51%, Consumer Durables down by 0.40%, PSU down by 0.34%, Oil & Gas down by 0.32%, Power down by 0.31% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.20%, ITC up by 0.61%, ICICI Bank up by 0.52%, Cipla up by 0.38% and HDFC up by 0.38%. On the flip side, NTPC down by 1.40%, Dr. Reddys Lab down by 1.07%, Hindalco down by 1.04%, ONGC down by 1.02% and Bharti Airtel down by 0.99% were the top losers.

Meanwhile, a Parliamentary panel has suggested the government to put a blanket ban on foreign direct investment (FDI) in brown field pharma units. A Standing Committee on Commerce, in its latest report, has highlighted that under existing policy domestic firms are facing threat due to takeover by MNCs and it could affect India's ability to produce low-cost quality generic drugs.

Highlighting the rationale  behind its recommendations, the report noted that the conditions imposed for approving FDI proposals in brown field pharma sector are not comprehensive and do not cater to the objective/purpose for which FDI is allowed. Further, there is no compulsion on transfer of technology and similar other conditions that can bring qualitative change to domestic pharma industry, the report added. Expressing the fear over the increasing acquisitions of domestic firms by MNCs, Panel stated that it would affect competition as well as take control of the larger share India's pharma industry and driving the domestic market as per their choice and desire.

The committee further added that FDI in pharma sector may be rigorously promoted for green field projects rather than brown field projects. It recommends that the Department of Industrial Policy and Promotion (DIPP) to work in tandem with Ministry of Health to ensure that FDI in pharma sector does not impinge on availability of affordable drugs to the Indian public. On the issue of rising price anomalies in the Indian pharma sector, the panel said that a ceiling may be fixed for introductory price of generic drugs in the country.

The CNX Nifty is currently trading at 8271.00, up by 4.00 points or 0.05% after trading in a range of 8255.35 and 8286.40. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.93%, ACC up by 1.60%, Ambuja Cement up by 1.45%, Coal India up by 1.24% and Zee Entertainment up by 0.79%. On the flip side, NTPC down by 1.57%, Dr. Reddys Lab down by 1.19%, Power Grid down by 1.08%, Hindalco down by 1.05% and Bharti Airtel down by 1.01% were the top losers.

The Asian markets were trading mostly in the green; KOSPI Index rose 5.58 points or 0.29% to 1,944.60, Straits Times gained 11.97 points or 0.36% to 3,344.48, Hang Seng increased 15.65 points or 0.07% to 23,349.34, Jakarta Composite added 23.82 points or 0.46% to 5,162.88, Taiwan Weighted surged 71.71 points or 0.79% to 9,169.42 and Nikkei 225 was up by 204.75 points or 1.16% to 17,839.89. On the flip side, Shanghai Composite decreased 56.98 points or 1.88% to 2,975.64 and FTSE Bursa Malaysia KLCI was down by 1.83 points or 0.1% to 1,747.22.