After early plunge, Indian benchmarks trade in a narrow range in noon trades

The selling pressure in Indian stock markets seems to have paused in the Friday afternoon session and the benchmark equity indices are looking set to extend the declining streak for the third straight week. The frontline indices after the positive opening failed to capitalize on the momentum and slipped below the psychological 5,450 (Nifty) and 18,000 (Sensex) levels. Since then the gauges continue to trade in a narrow range around those psychological levels as investors took to largely across the board profit booking. Stocks from the rate sensitive Banking, Realty and Automobile sectors continued to bear the brunt of hefty selling pressure while the Capital Goods and Oil & Gas pockets too suffered hefty pounding. However, Metal sector stocks gained some traction after stocks like Sterlite and Sesa Goa rebounded a session after nose-diving on reports of a possible merger of the two companies as part of a group restructuring exercise. While stocks from the Consumer Durables and Information Technology counters too moved higher in the session. Meanwhile, in view of a sharp drop in output from RIL's eastern offshore KG-D6 block, an Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee is scheduled to meet later in the day to consider changes in the natural gas allocation policy. On the global front, Asian markets are largely trading on an optimistic note while European stock futures too are indicating a higher opening for the markets there as sentiments remain positive as apart from the better than expected US jobless claims data which remained at the lowest level since the early days of the 2007-2009 recession, the upbeat German business confidence report spurred optimism.

Moreover, the broader markets though showed some resilience and traded with only marginal losses, outperforming their larger peers after two straight sessions of underperformance. The bourses drifted on weak volumes on the first day of a new F&O series while market breadth on BSE was in favor of declines in the ratio of 1492:1061 while 144 scrips remained unchanged.

The BSE Sensex is currently trading at 17,936.34 down by 142.16 points or 0.79% after trading as high as 18,198.15 and as low as 17,903.88. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index declined 0.33% and Small cap eased 0.13%.

On the BSE sectoral space, Metal up 1.33%, Consumer Durables up 1.30%, IT up 0.65% and TECk up 0.57% were the only gainers while Capital Goods down 1.87%, Bankex down 1.86%, Realty down 1.17%, Oil & Gas down 1.13% and Auto 0.37% were the major losers in the space.

HUL up 1.55%, SBI up 0.85%, RIL up 0.52%, ITC up 0.31% and Wipro up 0.11% were the major gainers on the Sensex, while Sterlite down 5.75%, DLF down 3.22%, Bharti Airtel down 2.59%, Hindalco down 2.56% and Tata Power down 2.43% were the major losers in the index.

Meanwhile, the Final Report of the Task Force on Aaadhar-Enabled Unified Payment Infrastructure has recommended that payments made under the social safety net programs and direct subsidy schemes be done electronically to ensure that the benefits of such schemes reach the intended beneficiaries without any leakages and on time. The Chairman of UIDAI and the Task Force, Nandan Nilekani has recommended a systematic, platform based transformation of governance through the usage of electronic payments. 

The Finance Minister, Pranab Mukherjee, too is of the view that such a system would help bring in transparency in the system and reduce avoidable delays. The Minister has recommended that the pilot projects which are so far mainly implemented in the areas of LPG, kerosene, fertilizers and MGNREGS, be up scaled and implemented in more areas and in more States.

The Task Force chaired by Nandan Nilekani was constituted in September 2011 to recommend, inter alia, detailed solution architecture for direct transfer of subsidy through a payments bridge wherein funds could be transferred into any Aadhaar-enabled bank account on the basis of the Aadhaar number. The Task Force, submitted its report, has observed that beneficiaries of all social safety net programs (MGNREGS, SSP, JSY, IAY, scholarships, etc.) and recipients of direct subsidy transfer payments (LPG, Fertilisers, kerosene, etc.) can greatly benefit by receiving their payments electronically, directly into accounts of their choice at either banks or post offices. It has also recommended that frontline development workers such as school teachers, Anganwadi workers, ASHA workers, etc. who often do not receive their salaries on time, should receive their salaries by direct deposit into their accounts at banks and post offices.

To implement said recommendations, it has proposed that a network of 10,00,000 interoperable micro ATMs operated by Business Correspondents be set-up across the country for people to access their accounts at their own convenience. In order to set-up this network quickly, a last mile transaction fee of 3.14% with a cap of Rs 20 per transaction be paid by Government to banks. This will also help lead to positive network externalities such as reduction in leakages and achieving financial inclusion.

Further, to reduce the use of cash in the economy, the Task Force has recommended that the Government and Government owned institutions accept electronic payments at all locations where they collect payments from citizens, without any additional surcharge. The Task Force also recommends that over a period of time, all payments of Government over the sum of Rs 1,000 should be made or received electronically. Transacting all Government business using electronic payments will help reduce graft, and bring about greater transparency and accountability.

The task force has also suggested that India Post should accept Aadhaar as KYC for post office savings bank accounts and money orders. India Post should look at deployment of micro ATMs in every post office. India Post should join interoperability networks and service customers of other banks, and allow own customers to use ATMs, micro ATMs installed by other banks.

The S&P CNX Nifty is currently trading at 5,436.45, lower by 46.85 points or 0.85% after trading as high as 5,521.40 and as low as 5,428.05. There were 20 stocks advancing against 30 declines on the index.

The top gainers on the Nifty were Sterlite up 3.65%, Coal India up 1.56%, Seas Goa up 1.34%, BPCL up 1.23% and Jindal Steel up 1.14%.

IDFC down 4.72%, HDFC down 4.56%, ACC down 3.02%, Kotak Bank down 2.56% and PNB down 2.40% were the major losers on the index.

In the Asian space, Shanghai Composite surged 1.11%, Hang Seng gained 0.13%, KLSE Composite rose 0.08%, Nikkei 225 climbed 0.54%, Straits Times added 0.21%, Seoul Composite advanced 0.60% and Taiwan Weighted ascended 0.28%.

On the flipside only Jakarta Composite plummeted 2.31%.