Benchmarks trade lower in early deals on profit booking

After making a gap-up opening, Indian equity benchmarks have pared their gains and entered into red terrain in early deals as investors opted to book profits at higher levels ahead of RBI policy meeting on February 3. However, loses remained capped on reports that foreign institutional investors were net buyers in Indian equities worth Rs 1,723.77 crore on January 29, 2015, as per provisional stock exchange data. Moreover, some support also came in with an UN report stating that, notwithstanding the decline in global foreign direct investment inflows, India's FDI increased by 26 percent in 2014 to an estimated $35 billion with maximum growth in the services sector.

On the global front, the US markets made a smart bounce back in last session with the major averages recovering from the sell-off that was seen over the course of the two previous sessions. The gains were partly attributed to comments of Federal Reserve Chair Janet Yellen who reportedly told the lawmakers that the US economy is strong, though she apparently expressed some concerns about the situation in Europe. The Asian markets were trading mixed at this point of time, though some of the indices headed for their first monthly gain since October.

Back home, on the sectoral front, realty, power and infrastructure witnessed the maximum gain in trade, while healthcare, fast moving consumer goods and metal remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming bench marks, while the market breadth on the BSE was positive; there were 1173 shares on the gaining side against 781 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex is currently trading at 29566.99, down by 114.78 points or 0.39% after trading in a range of 29551.50 and 29844.16. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index up by 0.44%.

The gaining sectoral indices on the BSE were Realty up by 3.03%, Power up by 1.59%, Infrastructure up by 1.09%, IT up by 0.70% and Capital Goods up by 0.61% while, Healthcare down by 1.86%, FMCG down by 0.52%, Metal down by 0.47%, Consumer Durables down by 0.23% and Bankex down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.17%, BHEL up by 2.80%, Hero MotoCorp up by 1.76%, Tata Power up by 1.59% and Maruti Suzuki up by 0.78%. On the flip side, Coal India down by 3.03%, HDFC down by 1.80%, Dr. Reddys Lab down by 1.76%, Bharti Airtel down by 1.49% and TCS down by 1.00% were the top losers.

Meanwhile, in a proposal for financial support to Jute Corporation of India, the government has approved mandatory packaging of sugar and food-grains in jute material to minimum extent of up to 90% of production, with certain exemptions. The government has approved this proposal to offset the losses suffered by Jute Corporation of India on account of Minimum Support Price (MSP) operations.

Meanwhile, for sugar, minimum packaging requirement has been fixed at 20% of production for jute year 2014-15. Both the decisions are aimed at protecting the interests of jute growers through procurement of raw jute under the MSP fixed by the government and also to stabilize the raw jute market for the benefit of 40 lakh farm families and the jute economy as a whole.

Further, the financial assistance to Jute Corporation of India (JCI) will be provided in the form of subsidy. The quantum of subsidy will include the difference between the purchase and sale price of MSP Raw Jute. The quantum of subsidy will also include fixed overhead costs incurred by JCI in maintaining its infrastructure for Minimum Support Price (MSP) operation.

The CNX Nifty is currently trading at 8933.10, down by 19.25 points or 0.22% after trading in a range of 8917.10 and 8996.60. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 8.51%, DLF up by 3.75%, NTPC up by 3.52%, BHEL up by 2.92% and Tech Mahindra up by 2.37%. On the flip side, Coal India down by 2.97%, HDFC down by 2.12%, Asian Paints down by 2.10%, Bank of Baroda down by 1.93% and Dr. Reddys Lab down by 1.78% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI rose 1.29 points or 0.07% to 1,783.47, Straits Times increased 9.9 points or 0.29% to 3,428.95, Jakarta Composite jumped 28.79 points or 0.55% to 5,291.51 and Nikkei 225 was up by 121.92 points or 0.69% to 17,728.14.

On the flip side, Taiwan Weighted decreased 38.34 points or 0.41% to 9,388.56, Shanghai Composite declined 31.64 points or 0.97% to 3,230.66, Hang Seng slipped 25.84 points or 0.11% to 24,570.01 and KOSPI Index was down by 0.39 points or 0.02% to 1,950.63.