Choppiness continues on D-Street in noon deals

Indian equity benchmarks continue to trade choppy in noon deals with frontline gauges trading tad near their neutral lines as investors remained on sidelines ahead of the July month’s expiry in the derivatives segment on Thursday coupled with fears of foreign money leaving Indian shores after government proposed to look into the Special Investigative Team’s stringent norms on participatory notes (P-notes). Sentiments also remained dampened on reports that foreign portfolio investors sold shares worth a net Rs 859.94 crore on July 27, 2015, as per provisional data released by the stock exchanges. However, some support came with 5% gain in stocks of PNB after the bank reported improvement in asset quality. Gross non-performing assets (NPA) declined to 6.47 percent from 6.54 percent and net NPA dropped to 4.05 percent from 4.06 percent on sequential basis.

On the global front, European counters have made a positive start with CAC, DAX and FTSE, all were trading in green with a gain of over half a percent. Asian markets were trading mostly in red at this point of time, as a deepening rout in Chinese stocks erased risk appetite - sending investors flocking to safe-haven instruments such as government bonds and the Japanese yen. On the sectoral front, software, fast moving consumer goods and consumer durables remained the top gainers in trade, while realty, auto and metal remained the top losers on the BSE sectoral space. The broader indices were trading in green, while the market breadth on the BSE was positive; there were 1352 shares on the gaining side against 1,048 shares on the losing side while 108 shares remain unchanged.

The BSE Sensex is currently trading at 27563.55, up by 2.17 points or 0.01% after trading in a range of 27505.75 and 27676.65. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index up by 0.28%.

The top gaining sectoral indices on the BSE were Bankex up by 0.53%, IT up by 0.46%, FMCG up by 0.46%, Consumer Durables up by 0.41% and Capital Goods up by 0.41%, while Realty down by 2.02%, Auto down by 0.40%, Metal down by 0.31%, INFRA down by 0.24% and Oil & Gas down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.60%, Hindalco up by 1.29%, Hindustan Unilever up by 1.19%, HDFC Bank up by 1.01% and Mahindra & Mahindra up by 0.86%. On the flip side, Tata Motors down by 2.36%, Hero MotoCorp down by 1.99%, ICICI Bank down by 0.81%, Bharti Airtel down by 0.69% and HDFC down by 0.62% were the top losers.

Meanwhile, in its bid to soothe the nerves of panic-stricken investors, Finance Minister Arun Jaitley has said they need not fear any “knee-jerk” reaction from the government on the SIT report, which had recommended tough measures to check investment flows through P-Notes. Jaitley said that 'It is too early to say what view the government would take. But it will certainly not take any such action in a knee-jerk reaction, particularly one which has any adverse impact on investment environment.' Jaitley also said government will wait for public comments on draft finance code before forming any view on monetary policy committee.

The Supreme Court-appointed SIT on black money last week recommended a host of measures, including suggesting the securities regulator SEBI to tighten norms related to participatory notes investments into India. The SIT said that Sebi does not have information about the ultimate beneficial owner of these transferable instruments, making it prone to be abused for round-tripping of tax-evaded funds back to India.

The SIT suspects that the P-note route is being used for the purpose of tax evasion and has also asked Sebi to compulsorily identify real owners of foreign funds coming through the controversial P-Note route and also prosecute those using equities for tax evasion, and take other steps required to curb black money and tax evasion through the stock market route.

Participatory Notes (P-Notes) are used by large number of foreign investors to invest in equity markets without disclosing their identity to the market regulator Sebi. Mostly, high net worth individuals, hedge funds and other foreign institutions tap this channel to invest in India through foreign institutional investors (FIIs). Investments through P-notes into India's capital market were at a whopping Rs 2.75 lakh crore at the end of June, over 11 per cent of total foreign institutional investment (FII) into the Indian markets.

The CNX Nifty is currently trading at 8365.20, up by 4.20 points or 0.05% after trading in a range of 8344.85 and 8397.40. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were PNB up by 4.81%, Bank of Baroda up by 1.74%, BHEL up by 1.71%, Zee Entertainment up by 1.49% and Kotak Mahindra Bank up by 1.38%. On the flip side, NMDC down by 4.34%, Tata Motors down by 2.32%, Hero MotoCorp down by 2.19%, Cairn India down by 1.33% and Bosch down by 0.83% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 74.76 points or 2.01% to 3,650.80, Jakarta Composite decreased 44.5 points or 0.93% to 4,726.79, Straits Times shed 26 points or 0.78% to 3,287.42, Nikkei 225 slipped 21.21 points or 0.1% to 20,328.89 and FTSE Bursa Malaysia KLCI was down by 1.91 points or 0.11% to 1,707.85.

On the flip side, KOSPI Index increased 0.29 points or 0.01% to 2,039.10, Taiwan Weighted rose 25.81 points or 0.3% to 8,582.49 and Hang Seng was up by 220.93 points or 0.91% to 24,572.89.

European Markets were trading in the green; Germany’s DAX gained 0.58%, France’s CAC rose 0.74% and UK’s FTSE was up by 0.54%.