Benchmarks reverse gears; slips into negative territory

Reversing gears, Indian equity markets have now slipped into negative territory in absence of positive triggers which could take the markets higher and also due to profit booking in frontline line blue-chip stocks. The sentiments were weighed down by report that foreign portfolio investors (FPIs) sold shares worth a net Rs 2,187.96 crore on February 18, 2015. However, losses remained capped on hopes of faster economic reforms by the government and optimism over the forthcoming Budget. On global front, most regional markets were closed for lunar new year holidays, except Japanese stocks, which climbed to their highest level in nearly 15 years as strong trade data and hopes for a compromise over Greece's debt boosted sentiment. Furthermore, the Dow and S&P 500 ended marginally lower on Wednesday after a drop in energy shares but declines were limited by minutes from the latest Federal Reserve meeting, which showed policymakers are concerned about raising interest rates too soon.

Back home, stocks from Metal, Consumer Durables and IT counters were supporting the markets’, while those from Banking, FMCG and Power counters were adding to the underlying cautious undertone.  In scrip specific development, shares of Tata Motors gained on reporting a marginal increase in global sales, including Jaguar Land Rover, at 80,499 units in January. On the other hand, shares of SKF India have dipped after reporting 15.5% year on year decline in its net profit at Rs 40.88 crore for the fourth quarter ended December 31, 2014 due to higher raw material and employee cost.

The market breadth on BSE was negative, out of 2410 stocks traded, 1040 stocks advanced, while 1290 stocks declined on the BSE.

The BSE Sensex is currently trading at 29304.66, down by 15.60 points or 0.05% after trading in a range of 29293.93 and 29469.86. There were 16 stocks advancing against 14 stocks declining on the index. The broader indices were trading mixed; the BSE Mid cap index was down by 0.10%, while Small cap index up by 0.17%.

The gaining sectoral indices on the BSE were Metal up by 0.75%, Consumer Durables up by 0.67%, IT up by 0.55%, Capital Goods up by 0.50% and TECK up by 0.36% while, Bankex down by 0.73%, FMCG down by 0.59%, Power down by 0.40%, Infrastructure down by 0.34% and Oil & Gas down by 0.28% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.96%, Sesa Sterlite up by 1.34%, Infosys up by 1.30%, Hindalco up by 1.09% and Maruti Suzuki up by 1.05%. On the flip side, ICICI Bank down by 1.18%, Tata Power down by 1.16%, Axis Bank down by 0.88%, Reliance Industries down by 0.85% and SBI down by 0.75% were the top losers.

Meanwhile, easing its gold related restrictions, the Reserve Bank of India (RBI) lifted the ban on imports of gold coins and medallions by banks and trading houses. RBI in its notification added that nominated banks are free to import gold on a consignment basis and banks are free to lend against gold. However, the banking regulator also said that while the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed.

The RBI notification also said that the obligation to export under the 20:80 scheme will continue to apply in respect of unutilised gold imported before November 28, 2014, i.e., the date of abolition of the 20:80 scheme. Under the 80:20 scheme, gold imports were linked with its exports. The RBI also said, the Star and Premier Trading Houses (STH/PTH) can import gold on DP basis as per entitlement without any end use restrictions.

In August 2013, with an aim to tame the widening current account deficit (CAD), the central bank had prohibited imports of gold coins and medallions besides restricting inbound shipments of the metal. Though, gold imports have surged in recent months but a lower CAD estimate for the full year has prompted the government and the RBI to consider rolling back curbs.

The CNX Nifty is currently trading at 8852.75, down by 16.35 points or 0.18% after trading in a range of 8851.70 and 8902.90. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 1.90%, Infosys up by 1.35%, BPCL up by 1.28%, Asian Paints up by 1.24% and Sesa Sterlite up by 1.15%. On the flip side, Bank of Baroda down by 2.37%, ACC down by 2.24%, Ultratech Cement down by 1.77%, Ambuja Cement down by 1.72% and Cairn India down by 1.53% were the top losers.

In Asia, most of the equity indices were closed for the trade today; Nikkei 225 increased 79.38 points or 0.44% to 18,278.55.