Benchmarks add losses; Nifty slips below 8950 mark

Indian bourses adding losses, continued to trade in red in the late morning session, with the Sensex losing over 100 points and Nifty falling below the 8950 level, as funds and retail investors indulged in booking profits at prevailing levels ahead of Reserve Bank of India (RBI) policy meeting on February 3, 2015. The sentiments were distrustful after RBI Deputy Governor H R Khan said that ‘unbridled’ financial inclusion drive could create problems and asked banks to take adequate safeguards in this regard. Khan said bankers are already concerned about the Rs 5,000 overdraft facility given under the Jan-Dhan Yojana and advised the lenders to device the right framework to deal with the issue. Meanwhile, the broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices were up over 0.50%. Some support 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, Asian stock markets were mostly higher after economic data suggested Japan is pulling out of recession while Chinese shares fell ahead of a manufacturing report. Overnight, US stocks ended higher following an upturn in oil prices, and a rally in Apple and Boeing shares helped offset some disappointing earnings and lingering questions over U.S. monetary policy. Back home, Indian Rupee recovered by 12 paise to 61.74 against the US dollar in early trade on fresh selling of the American currency by exporters.

Back on street, stocks from Realty, Power and Infrastructure counters were supporting the markets’ uptrend, while those from FMCG, Consumer Durables and Metal counters were adding to the underlying cautious undertone. In scrip specific development, shares of Hindustan Construction Company (HCC) have rallied after reporting a five-fold jump in standalone net profit at Rs 27.1 crore for the quarter ended December 31, 2014. On the other hand, Dr Reddys Lab have declined after  reporting a 7.1% decline in consolidated net profit to Rs 574.5 crore for the quarter ended December 2014.

The market breadth on BSE was positive, out of 2323 stocks traded, 1356 stocks advanced, while 886 stocks declined on the BSE.

The BSE Sensex is currently trading at 29547.31, down by 134.46 points or 0.45% after trading in a range of 29520.74 and 29844.16. There were 13 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index up by 0.57%.

The gaining sectoral indices on the BSE were Realty up by 3.30%, Power up by 1.88%, INFRA up by 1.21%, IT up by 0.64% and Capital Goods up by 0.54%, while FMCG down by 0.63%, Consumer Durables down by 0.53%, Metal down by 0.42% and Bankex down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.63%, BHEL up by 2.82%, Tata Power up by 2.22%, Hero MotoCorp up by 1.79% and Maruti Suzuki up by 1.11%. On the flip side, Coal India down by 3.07%, Dr. Reddys Lab down by 2.33%, HDFC down by 1.86%, Bharti Airtel down by 1.32% and Tata Motors down by 1.25% were the top losers.Meanwhile, Regardless of decline in global foreign direct investment (FDI) inflows, 'Global Investment Trade Monitor' report released by United Nations Conference on Trade and Development showed that India’s FDI increased by 26% in 2014 to an estimated $35 billion. Notably, the figure is one of the highest in recent years, though in 2008 FDI peaked in India with $47 billion investment followed by $35.6 billion in 2009.

Meanwhile, the top five countries in FDI list in 2014 were China ($128 billion), followed by Hong Kong ($111 billion), the US ($86 billion), Singapore ($81 billion) and Brazil ($62 billion). Further, the report pointed that maximum growth in services sector especially in electricity, gas, water, waste management and information and communication, led to sharp surge of FDI in the country.

According to UNCTAD, India still remains the brightest spot for FDI despite a global decline and FDI is at a significant historical high, if not at the highest level of investment. However, China piped US to top the FDI recipient list and emerged as world's largest recipient of FDI.  The world’s largest economy, United States (US) has been holding the position of world’s largest recipient of FDI, since 1980’s despite a modest rise of 3%. However, the drop in FDI in the US has been primarily due to a fall in cross-border M&A sales, particularly due to the Verizon-Vodafone deal and stood at$ 10 billion in 2014 from $ 60 billion in 2013. It had exceeded $222 billion in 2008. Lastly, the report underscored that while the overall FDI flows to developed countries dropped by 14%, FDI in developing economies reached to new high with global share of 56%.

The CNX Nifty is currently trading at 8919.50, down by 32.85 points or 0.37% after trading in a range of 8911.45 and 8996.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 9.04%, NTPC up by 3.81%, DLF up by 3.69%, IDFC up by 3.66% and BHEL up by 2.74%. On the flip side, Coal India down by 3.08%, Dr. Reddys Lab down by 2.51%, Bank of Baroda down by 2.46%, HDFC down by 2.38% and Asian Paints down by 2.31% were the top losers.

Most of the Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 0.11%, Straits Times increased 0.26%, Jakarta Composite jumped 0.49%, KOSPI Index was down by 0.01% and Nikkei 225 was up by 0.76%. On the flip side, Taiwan Weighted decreased 0.44%, Shanghai Composite declined 0.97% and Hang Seng slipped 0.11%.