Benchmarks trade lower in early deals on Friday

Indian equity benchmarks are trading slightly in the red in early deals on Friday as investors opted to book profit after five days of rally. However, losses remained capped as after Moody’s, another global credit rating agency Fitch retained India's credit outlook at ‘stable’ saying although “dynamism” is back in the economy, translation of reforms into higher growth would depend upon actual implementation. It has also raised its forecasts for real GDP growth to 8 percent for current financial year and further to 8.3 percent in 2016-17. Meanwhile, with rating agencies Fitch and Moody's affirming India's credit outlook as “stable” and “positive” respectively, industry body Ficci has said that the move will uplift investor sentiment and help attract foreign investments.

On the global front, the US markets made a positive close in last session despite choppy trading, mainly on the back of good gains in energy sector stocks. Though, Labor Department reported a rebound in initial jobless claims in the week ended April 4th. The Asian markets were trading mostly in the green at this point of time with some of the indices heading towards the second weekly advance, though Hong Kong market was witnessing some profit booking in early deals after going through two straight days of frenzied buying.

Back home, on the sectoral front, oil and gas, realty and consumer durables witnessed the maximum gain in trade, while metal, technology and banking remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1214 shares on the gaining side against 769 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex is currently trading at 28844.80, down by 40.41 points or 0.14% after trading in a range of 28820.90 and 28899.19. There were 13 stocks advancing against 17 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 0.50%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.86%, Realty up by 0.84%, Consumer Durables up by 0.70%, PSU up by 0.56% and Infrastructure up by 0.40% while, Metal down by 0.34%, TECK down by 0.06%, Bankex down by 0.05% and Capital Goods down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.27%, Sesa Sterlite up by 1.26%, SBI up by 1.23%, Mahindra & Mahindra up by 1.14% and BHEL up by 0.82%. On the flip side, Hindalco down by 1.86%, Cipla down by 0.99%, HDFC down by 0.99%, Tata Steel down by 0.96% and Bharti Airtel down by 0.93% were the top losers.

Meanwhile, following government’s approval, the Reserve Bank of India (RBI) has notified the increase in foreign direct investment (FDI) limit in the insurance sector to 49%. RBI in its notification said that the extant FDI policy for insurance sector has since been reviewed and further liberalised. Accordingly, with immediate effect, FDI in insurance sector shall be permitted up to 49 per cent subject to the revised conditions. The central bank further said that “Foreign direct investment up to 26% shall be under automatic route and beyond 26% and up to 49% shall be with government approval....an Indian insurance company shall ensure that its ownership and control remains at all times in the hands of resident Indian entities.”

RBI has included a new term ‘Other Insurance Intermediaries appointed under the provisions of Insurance Regulatory and Development Authority Act, 1999’ under the definition of ‘Insurance’. RBI added that “any increase of foreign investment of an Indian insurance company shall be in accordance with the pricing guidelines specified by Reserve Bank under the Foreign Exchange Management Act, 1999.”

The government has already notified rules to implement the decision to increase foreign direct investment limit in the insurance sector to 49 per cent. The Indian Insurance Companies (Foreign Investment) Rules, 2015 allow up to 26 per cent foreign investment through the automatic route, while foreign partners can increase their stake beyond that limit up to 49 per cent with the approval of the Foreign Investment Promotion Board (FIPB). The rules will also apply to insurance brokers, third party administrators, surveyors and loss assessors, and other insurance intermediaries appointed under the provisions of the IRDA Act, 1999. Foreign portfolio investment in an Indian insurance company shall be governed by the provisions contained in the relevant sub-regulations/regulations under FEMA Regulations, 2000 and provisions of the Securities Exchange Board of India (Foreign Portfolio Investors) Regulations.

The CNX Nifty is currently trading at 8764.10, down by 14.20 points or 0.16% after trading in a range of 8758.40 and 8781.40. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were IDFC up by 2.90%, BPCL up by 1.80%, Idea Cellular up by 1.55%, Sesa Sterlite up by 1.31% and ONGC up by 1.19%. On the flip side, Hindalco down by 1.75%, Tech Mahindra down by 1.28%, Tata Steel down by 1.23%, Cipla down by 1.17% and Zee Entertainment down by 1.11% were the top losers.

Asian markets were trqading mostly in the green; Nikkei 225 rose 7.47 points or 0.04% to 19,945.19, Straits Times increased 17.66 points or 0.51% to 3,477.96, KOSPI Index gained 21.75 points or 1.06% to 2,080.62, Taiwan Weighted added 29.49 points or 0.31% to 9,597.53, Shanghai Composite surged 55.43 points or 1.4% to 4,012.97 and Hang Seng was up by 102.93 points or 0.38% to 27,047.32.

On the flip side, FTSE Bursa Malaysia KLCI decreased 3.5 points or 0.19% to 1,845.89 and Jakarta Composite was down by 3.47 points or 0.06% to 5,497.43.