Benchmarks continue weak trade in late afternoon session

Indian equity markets continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters. The markets didn’t took note of International Monetary Fund (IMF) report, who in its latest economic health check termed ‘India as the fastest growing economies in the world’, by estimating its growth rate at 7.5% this year and the next. Traders were seen piling position in IT, TECK and FMCG stocks while selling was witnessed in Oil & Gas, Realty and Bankex sector stocks. In scrip specific development, Jindal Steel & Power (JSPL) was trading in red after its Chairman Naveen Jindal and 14 others were summoned by a special court in the coal blocks allocation scam case. The court observed that he had prima facie manipulated entire government machinery to procure undue allotment in Jharkhand.

On the global front, the Asian markets were trading in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,100 and 26,600 levels respectively. The market breadth on BSE was negative in the ratio of 777:1714 while 98 scrips remained unchanged.

The BSE Sensex is currently trading at 26588.28, down by 129.09 points or 0.48% after trading in a range of 26518.62 and 26850.37. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.71%, while Small cap index down by 1.27%.

The gaining sectoral indices on the BSE were IT up by 1.23%, TECK up by 0.98%, FMCG up by 0.02% while, Oil & Gas down by 2.13%, Realty down by 2.00%, Bankex down by 1.94%, INFRA down by 1.70%, PSU down by 1.47% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.93%, Bajaj Auto up by 2.51%, Coal India up by 1.84%, Hero MotoCorp up by 1.45% and ITC up by 0.98%.

On the flip side, ONGC down by 3.14%, Hindalco down by 3.12%, Tata Power down by 3.00%, ICICI Bank down by 2.63% and Axis Bank down by 2.20% were the top losers.

Meanwhile, in a decision which would help in speedier clearance of foreign direct investments proposals, which is one of the key concerns of investors, the cabinet has given more teeth to Foreign Investment Promotions Board (FIPB) by enhancing its power to take decision on foreign investments worth Rs 3000 crore against Rs 1200 crore permitted in FDI policy, 2014. This decision is expected to clear the decks for many stalled proposals by expediting the approval process, resulting into increased foreign investment inflows.

However, for recommendations of FIPB on proposals involving total foreign equity inflow of more than Rs 3,000 crore would still require consideration of CCEA. According to the extant policy, all the proposals above Rs 1,200 crore had to be referred to the Cabinet Committee on Economic Affairs (CCEA), while the finance minister cleared the recommendations of the FIPB on proposals with total foreign equity inflow of and below Rs 1,200 crore.

Additionally, CCEA would also consider the proposals which may be referred to it by the FIPB / the Minister of Finance. Further, the FIPB Secretariat in the Department of Economic Affairs (DEA) will process the recommendations of FIPB to obtain the approval of Minister of Finance and the CCEA.

Notably, most of the sectors are presently under the automatic route, which means that FDI in these sectors would require intimation to RBI and no approval of FIPB/ CCEA. However, proposals in certain sensitive sectors like tea, mining, and telecom (beyond 49 percent FDI) still require to be routed through FIPB.

The CNX Nifty is currently trading at 8052.75, down by 44.25 points or 0.55% after trading in a range of 8028.25 and 8122.60. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.96%, Bajaj Auto up by 2.50%, HCL Tech up by 2.38%, Coal India up by 1.80% and ACC up by 1.76%.

On the flip side, Bank of Baroda down by 3.85%, Tata Power down by 3.34%, Hindalco down by 3.16%, ONGC down by 3.00% and Kotak Mahindra Bank down by 2.90% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 350.94 points or 1.27% to 27,289.97, Nikkei 225 decreased 239.64 points or 1.23% to 19,291.99, Shanghai Composite decreased 117.05 points or 2.77% to 4,112.21, Taiwan Weighted decreased 114.09 points or 1.16% to 9,704.11, Straits Times decreased 27.59 points or 0.8% to 3,432.20, KOSPI Index decreased 13.58 points or 0.65% to 2,091.00, Jakarta Composite decreased 9.08 points or 0.18% to 5,175.88 and FTSE Bursa Malaysia KLCI decreased 8.39 points or 0.46% to 1,812.58.

The European markets were trading in red; Germany’s DAX decreased 81.5 points or 0.72% to 11,268.65, France’s CAC decreased 59.25 points or 1.19% to 4,922.34 and UK’s FTSE 100 decreased 68.68 points or 0.99% to 6,865.06.