Benchmarks continue to trade weak on final trading session of F&O expiry

Local equity markets after slipping into negative territory continued trading weak in afternoon deals on final trading session of F&O expiry, wherein volatility is expected to play at its best. Benchmarks also lost ground as market-participants increasingly booked profits in the holiday truncated Christmas week. However, losses are expected to remain capped as India’s cabinet approved an executive order on Wednesday to implement coal and insurance reforms. The move comes after a month-long parliament session that ended on Tuesday failed to vote on a bill to raise the cap on foreign investment in insurance companies to 49 percent from 26 percent, and another piece of legislation to overhaul the troubled coal sector. Trading a little above day’s low, both Sensex and Nifty were trading below psychologically crucial 27,400 and 8,250 levels respectively, with losses of around half a percent. Meanwhile, broader indices also succumbing to selling pressure, were trading with cut of around two tenths of a percent.

On the global front, Asian shares traded higher on Wednesday, taking the lead from Wall Street where shares closed at a record level overnight after data showed the US economy grew at its fastest pace in 11 years in the third quarter.

Closer home, most of the sectoral indices on BSE were reeling under pressure, with an exception of only stocks belonging from realty and Auto counter. On the flip side, maximum drubbing was witnessed by stocks from Infrastructure, Oil & Gas and Power counters were the prominent losers of the session. Shares of insurance companies rose after cabinet finally insurance bill to raise the cap on foreign investment in insurance companies to 49 percent from 26 percent. The overall market breadth on BSE were in the favour of declines which thumped advances in the ratio of 1020:977; while 39 shares remained unchanged.

The BSE Sensex is currently trading at 27390.60, down by 115.86 points or 0.42% after trading in a range of 27342.80 and 27571.25. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index up by 0.22%.

The gaining sectoral indices on the BSE were Realty up by 0.81% and Auto up by 0.13% while, INFRA down by 0.94%, Power down by 0.83%, Oil & Gas down by 0.82%, PSU down by 0.76% and IT down by 0.43% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 0.47%, Maruti Suzuki up by 0.24%, Coal India up by 0.18%, ICICI Bank up by 0.10% and SBI up by 0.05%. On the flip side, NTPC down by 2.03%, BHEL down by 1.93%, Hindalco down by 1.76%, ONGC down by 1.49% and Dr. Reddys Lab down by 1.49% were the top losers.

Meanwhile, with an aim to enhance foreign investments and boost domestic manufacturing, the Government is likely to consider a proposal for liberalizing foreign direct investment (FDI) policy soon for the cash-starved medical devices sector. The proposal to relax the FDI policy has been mooted by the Commerce and Industry Ministry.

As the medical devices sector falls under the pharmaceutical category, it is accordingly subjected to FDI limits and other conditions such as mandatory government nods. FDI in medical devices sector is permitted through government-approval route, however the industry has been demanding that FDI should be put under the automatic route. India badly needs foreign investments in medical devices and equipment sector. 

Industry is of the view that the domestic companies are not competitive as global firms and not big like drug firms and thus there is no threat of mergers and acquisitions from multi-national firms.

Medical devices include wide range of products such as implants sutures and surgical instruments. The present market size of the industry stands at around $7 billion. As per estimates, India imports about 70 percent of its requirement of medical devices. The industry size is about $7 billion in the country

The CNX Nifty is currently trading at 8232.80, down by 34.20 points or 0.41% after trading in a range of 8221.20 and 8286.40. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 4.46%, ACC up by 1.26%, HCL up by 1.09%, Ambuja Cement up by 0.95% and Grasim Industries up by 0.88%. On the flip side, Power Grid Corporation down by 2.23%, NTPC down by 2.13%, BHEL down by 1.83%, Dr. Reddys Lab down by 1.72% and Hindalco down by 1.70% were the top losers.

Asian markets were trading mostly higher; with KOSPI Index trading higher by 7.59 points or 0.39% to 1,946.61; Straits Times inching up by 13.4 points or 0.4% to 3,345.91 Hang Seng rising by 15.65 points or 0.07% to 23,349.34; Jakarta Composite edging up by 31.45 points or 0.61% to 5,170.52; Taiwan Weighted surging by 88.47 points or 0.97% to 9,186.18; Nikkei 225 rallying by 219.09 points or 1.24% to 17,854.23. On the flip side, Shanghai Composite down by 46.08 points or 1.52% to 2,986.53; FTSE Bursa Malaysia KLCI lost 1.19 points or 0.07% to 1,747.86.