Benchmarks trade slightly lower in early deals on Thursday

Indian equity benchmarks are trading slightly in red in early deals on Thursday, tracking losses in the US equity markets after the Fed released the minutes of its latest policy meeting stating that the conditions for a rate hike are approaching. The sentiments were also under pressure with a private report stating that the country remains a 'long way off' from a complete turnaround in the corporate investment cycle despite various positive economic indicators. Foreign portfolio investors (FPIs) selling shares worth a net Rs 423.72 crore on August 19, 2015, as per provisional data released by the stock exchanges, also kept pressurizing the markets. Traders were seen piling up position in Healthcare, FMCG and Oil & Gas, while selling was witnessed in Metal, INFRA, Power. In scrip specific development, Sun Pharmaceutical was trading higher after the company received US Food and Drug Administration (USFDA) approval for its Supplemental New Drug Application (sNDA) for XiminoTM (Minocycline HCl) extended-release capsules 45 mg, 90 mg and 135 mg. 45 mg, 90 mg and 135 mg.

On the global front, US markets ended lower as minutes from the latest Federal Reserve meeting highlighted concern over the state of the global economy. Asian markets were trading mostly in red on concerns of growth slowdown in China, the world's second largest.

Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,500 and 27,900 levels respectively. The market breadth on BSE was negative in the ratio of 859: 920 while 63 scrips remained unchanged. 

The BSE Sensex is currently trading at 27884.36, down by 47.28 points or 0.17% after trading in a range of 27828.12 and 27964.60. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.04%, while Small cap index lost 0.15%.

The gaining sectoral indices on the BSE were Healthcare up by 1.83%, FMCG up by 0.55% and Oil & Gas up by 0.03%, while Metal down by 0.95%, INFRA down by 0.80%, Power down by 0.68%, IT down by 0.56% and TECK down by 0.51% were the losing indices on BSE.

The top gainers on the Sensex were Lupin up by 4.50%, Sun Pharma Inds. up by 3.32%, Bharti Airtel up by 1.54%, Dr. Reddys Lab up by 1.49% and Cipla up by 0.90%. On the flip side, Vedanta down by 3.70%, Tata Steel down by 1.80%, GAIL India down by 1.60%, ONGC down by 1.53% and Hero MotoCorp down by 1.49% were the top losers.

Meanwhile, the Reserve Bank of India (RBI), further widening the reach of banking services and in a effort to push the government’s goal of financial inclusion has given in-principle approval to 11 entities to open payments banks. The new format of the banks will provide basic savings, deposit, payment and remittance services to people without access to the formal banking system.

Aditya Birla Nuvo; Airtel M Commerce Services of Bharti Airtel; Cholamandalam Distribution Services; Department of Posts; FINO PayTech Ltd; National Securities Depository (NSDL); Reliance Industries (RIL); Tech Mahindra; and Vodafone m-pesa, a unit of telco Vodafone India Ltd, were the nine organizational entities given in-principle approval. Apart from this, two individuals - Dilip Shantilal Shanghvi, founder of Sun Pharmaceutical Industries and Vijay Shekhar Sharma, CEO of One97 Communications that runs Paytm, the mobile commerce and mobile payment company, have received the approval. In-principle approval will be valid for 18 months, after which the entities will be given formal licences, provided they fulfil conditions stipulated by RBI.

RBI said that it had chosen “entities with experience in different sectors and with different capabilities so that different models could be tried”. The apex bank elaborating the selection process said that first, a detailed scrutiny was undertaken by an External Advisory Committee (EAC) under the Chairmanship of Dr. Nachiket Mor, then the recommendations of the EAC were an input to an Internal Screening Committee (ISC), this Internal Screening Committee prepared a final list of recommendations for the Committee of the Central Board (CCB). In arriving at the final list, the CCB noted that it would be difficult at this stage to forecast the most successful likely model in the emerging business of payments. The CCB further noted that payments banks cannot undertake lending, and therefore believed that the payments bank would not be subject to the same risks as a full service bank.

RBI has chosen the 11 from among 41 entities that applied for payments bank licences. Some applicants like Kishore Biyani, group chief executive officer at Future Group, who lost out said they accepted RBI’s decision but were clueless as to why their applications had been rejected.The CNX Nifty is currently trading at 8482.25, down by 12.90 points or 0.15% after trading in a range of 8460.10 and 8501.35. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Lupin up by 4.49%, Sun Pharma Inds. up by 3.38%, Tech Mahindra up by 2.44%, BPCL up by 2.43% and Bharti Airtel up by 1.79%. On the flip side, Vedanta down by 2.44%, NMDC down by 2.08%, Cairn India down by 1.81%, GAIL India down by 1.49% and ONGC down by 1.46% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 299.9 points or 1.29% to 22,867.95, Jakarta Composite decreased 49.85 points or 1.11% to 4,434.40, Straits Times decreased 29.5 points or 0.97% to 3,011.75, Shanghai Composite decreased 15.01 points or 0.4% to 3,779.10, Nikkei 225 decreased 14.77 points or 0.07% to 20,207.86, KOSPI Index decreased 10.7 points or 0.55% to 1,928.68 and FTSE Bursa Malaysia KLCI decreased 8.72 points or 0.55% to 1,573.72

On the flip side, Taiwan Weighted increased 8.4 points or 0.1% to 8,030.24.