Benchmarks trade lower in early deals on Tuesday

Indian equity benchmarks have made a weak start and are trading with a cut of around quarter of a percent in early deals on Tuesday. Sentiments remained dampened on account of disappointing set of earnings announcement by the IT bellwether HCL Tech. The company’s third quarter net profit fell by 12 percent sequentially, though was up 3.6 percent year-on-year to Rs 1,683 crore, impacted by adverse cross currency. Sentiments also weighed down on report that foreign portfolio investors sold shares worth a net Rs 1506.86 crore yesterday.

On the global front, the US markets made a bounce back on some better than expected earnings announcements and after China’s central bank went for biggest cut to reserve requirements since 2008. The Asian markets were trading mostly in the green at this point of time, though some of the indices have bounced back tailing the overnight gains in the US markets. Nikkei has gained with the yen weakening against dollar.

Back home, on the sectoral front, fast moving consumer goods, infra and capital goods witnessed the maximum gain in trade, while healthcare, software and technology remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 900 shares on the gaining side against 1,005 shares on the losing side while 76 shares remain unchanged.

The BSE Sensex is currently trading at 27812.86, down by 73.35 points or 0.26% after trading in a range of 27750.43 and 27976.93. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.15%, while Small cap index down by 0.25%.

The gaining sectoral indices on the BSE were FMCG up by 0.35%, Infrastructure up by 0.31%, Capital Goods up by 0.30%, Power up by 0.27% and Consumer Durables up by 0.26% while, Healthcare down by 3.24%, IT down by 1.07%, TECK down by 0.78%, Auto down by 0.38% and PSU down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.40%, Axis Bank up by 1.26%, Mahindra & Mahindra up by 0.97%, Coal India up by 0.91% and ICICI Bank up by 0.84%. On the flip side, Sun Pharma down by 9.68%, Maruti Suzuki down by 2.56%, Wipro down by 2.03%, Dr. Reddys Lab down by 1.97% and Hindalco down by 1.91% were the top losers.

Meanwhile, as the Parliament resumes the Budget Session, the government is likely to introduce a Bill in Lok Sabha to amend the existing law on micro, small and medium enterprises. Indications are that the government may change the definition of MSMEs and thereby revise the investment limit for plant and machinery for such units.

The bill amending the Micro Small & Medium Enterprises Development Act, 2006 has suggested doubling the capital ceiling for micro enterprises from Rs 25 lakh at present to Rs 50 lakh. Similarly, for small enterprises, it proposes to hike the limit from Rs 5 crore to Rs 10 crore. The bill suggests tripling the capital ceiling for medium enterprises from Rs 10 crore to Rs 30 crore. For services sector units, the proposal entails doubling the investment limit in plant and machinery from Rs 10 lakh to Rs 20 lakh for micro enterprises. For small enterprises, it is proposed to be raised from Rs two crore to Rs five crore; whereas for medium enterprises the proposed increase is from the present Rs five crore to Rs 15 crore.

The MSMEs, ministry has said that the main purpose of this exercise is to support entrepreneur ventures of MSMEs in positive and constructive manner. The Prime Minister’s Task Force on MSMEs recommended that the banks must achieve 20 per cent year-on-year growth in credit to micro and small enterprises and a 10 per cent annual growth in number of micro enterprise accounts.

The CNX Nifty is currently trading at 8419.85, down by 28.25 points or 0.33% after trading in a range of 8397.55 and 8469.35. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 1.79%, Axis Bank up by 1.55%, ITC up by 1.37%, BPCL up by 1.32% and Mahindra & Mahindra up by 1.15%. On the flip side, Sun Pharma down by 9.94%, HCL Tech. down by 7.07%, Maruti Suzuki down by 2.65%, Bank Of Baroda down by 2.23% and Wipro down by 2.17% were the top losers.

Asian markets were trading mostly in the green; Straits Times rose 6.8 points or 0.19% to 3,510.05, FTSE Bursa Malaysia KLCI increased 7.4 points or 0.4% to 1,856.06, Jakarta Composite gained 20.73 points or 0.38% to 5,421.53, Shanghai Composite advanced 36.47 points or 0.86% to 4,253.55, Nikkei 225 surged 188.1 points or 0.96% to 19,822.59 and Hang Seng was up by 574.82 points or 2.12% to 27,669.75.

On the flip side, Taiwan Weighted decreased 13.56 points or 0.14% to 9,539.29 and KOSPI Index was down by 5.71 points or 0.27% to 2,141.00.