Benchmarks slip into red lacking any major buying activity

Markets depicting the choppiness of the F&O series expiry were once again trading in red, though the cut was modest but traders were not taking longer bets and squaring off their position. Investors have largely overlooked the industry body CII’s statement that Indian economy is poised to grow at 9-10% in medium-term. It has said that the indirect tax reform would add 1.5 percentage points to the GDP growth rate. Marketmen were also unable to get any advantage with the recovery in the currency, which after falling for three consecutive days has made a smart bounce back. On the sectoral front, while the oil & gas, auto and FMCG were showing some upmove, others remained in consolidation mood with infra, tech and PSU dragging the markets lower. There were some earnings announcements keeping the markets buzzing, Godrej Industries was up by10% to Rs 400 after the company reported a 22% Y-o-Y growth in consolidated net profit at Rs 139 crore in the March quarter. Traders are now eyeing some other important result announcements from Coal India and Hindalco etc. to take cues.

The BSE Sensex is currently trading at 27521.89, down by 42.77 points or 0.16% after trading in a range of 27499.25 and 27666.37. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.39%, while Small cap index was tad lower by 0.05%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.35%, Auto up by 0.13%, FMCG up by 0.09%, while INFRA down by 1.03%, TECK down by 0.34%, PSU down by 0.28%, Realty down by 0.26%, Bankex down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.95%, Vedanta up by 2.55%, Infosys up by 0.98%, GAIL India up by 0.79% and BHEL up by 0.62%. On the flip side, Cipla down by 2.07%, HDFC down by 1.55%, Mahindra & Mahindra down by 1.54%, Hindalco down by 1.45% and Tata Power down by 1.45% were the top losers.

Meanwhile, Government in its effort to further ease doing business in India, has clarified that the approval of the Foreign Investment Promotion Board (FIPB) will not be required for mergers and acquisitions (M&As) in sectors where foreign direct investment (FDI) is allowed under automatic route. Currently, foreign investment is permitted either through the automatic route or the government approval route. The FIPB, which is an inter-ministerial body, clears investment proposals of up to Rs 3,000 crore, while those proposals involving investment of more than Rs 3,000 crore are given final clearance by the Cabinet Committee on Economic Affairs (CCEA).

A new FDI circular was issued by the Department of Industrial Policy and Promotion (DIPP) as several corporates were confused on the issue and in the process the flow of investment was being delayed.

The circular also said that government permission will not be required for issuing ESOPs (employees stock option plans) in sectors under automatic route.  Currently, foreign investment is permitted either through the automatic route or the government approval route. During the April-February period of 2014-15, FDI grew by 39 per cent year-on-year to $28.81 billion. The government has recently taken several steps including reduction in number of approvals and clearances to improve ease of doing business in the country and attract domestic and foreign investments.

The CNX Nifty is currently trading at 8319.45, down by 15.15 points or 0.18% after trading in a range of 8310.35 and 8364.50. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.02%, Vedanta up by 2.79%, ACC up by 1.47%, BPCL up by 1.35% and Ambuja Cement up by 1.21%. On the flip side, Cipla down by 2.03%, Idea Cellular down by 2.00%, HDFC down by 1.77%, Mahindra & Mahindra down by 1.56% and Tata Power down by 1.52% were the top losers.

The Asian markets were showing mixed trend, FTSE Bursa Malaysia KLCI was up modestly by 0.25 points or 0.01% to 1,755.30, KOSPI Index gained 3.39 points or 0.16% to 2,110.89, Taiwan Weighted was up by 19.3 points or 0.2% to 9,712.84 and Nikkei 225 increased by 78.88 points or 0.39% to 20,551.46.

On the other hand, Hang Seng slumped by 524.11 points or 1.87% to 27,557.10, Shanghai Composite plunged by 116.86 points or 2.36% to 4,824.85, Straits Times lost 10.53 points or 0.31% to 3,414.41 and Jakarta Composite declined by 1.04 points or 0.02% to 5,252.34.