Benchmarks erase gains; Nifty breaches 7,800 mark

Indian equity markets erased all early gains and are now trading in red in the late morning session on account of selling in frontline blue chip counters. The sentiments were on downbeat note despite Moody’s stated that a fall in commodity prices, particularly crude oil prices, and tighter fiscal and monetary policies have helped restore India’s macro-economic balance over the last two years. The sentiments were so pessimistic that investors paid no heed of Reserve Bank of India Governor Raghuram Rajan remarks who stated that the Indian economy will be a magnet for global funds and transfer of wealth from the West to India is expected to resume once the volatility caused by China’s currency devaluation settles down. Rajan’s comments on the Indian economy came even as the rupee was hammered in the interbank foreign exchange market. Traders were seen piling position in Oil & Gas, Metal and Realty stocks while selling was witnessed in Power, IT and Capital Goods sector stocks. The market may remain volatile in the near future as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. August 2015 series to next month i.e. September 2015 series. The near month August 2015 derivatives contracts will expire on Thursday i.e. August 27, 2015.

On the global front, the Asian markets traded mostly in green. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,800 and 25,600 levels respectively. The market breadth on BSE was negative in the ratio of 475:1801 while 58 scrips remained unchanged.

The BSE Sensex is currently trading at 25580.98, down by 160.58 points or 0.62% after trading in a range of 25556.97 and 26124.83. 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 1.07%, while Small cap index down by 2.19%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.51%, Metal up by 0.42%, Realty up by 0.10% and Bankex up by 0.09%, while Power down by 2.42%, IT down by 2.15%, Capital Goods down by 2.07%, TECK down by 1.73% and INFRA down by 1.69% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.08%, Bajaj Auto up by 1.40%, Reliance Industries up by 1.23%, Hindustan Unilever up by 1.19% and ONGC up by 0.79%.

On the flip side, Lupin down by 4.15%, BHEL down by 3.01%, Infosys down by 2.99%, Sun Pharma down by 2.81% and Hero MotoCorp down by 2.72% were the top losers.

Meanwhile, Reserve Bank of India while releasing a working group report on compilation of flow of funds (FOF) accounts to assess nature and pace of financial development recommended that the FOF accounts of money market funds (MMFs) and non-MMFs to be compiled and published separately instead of the mutual funds sector which was part of the other financial institutions in the extant FOF accounts. Besides it also recommended that the RBI may examine the possibility of compiling and publishing the FOF accounts on quarterly basis beginning with the financial sector. The data flow into the FOF database will be automated to the possible extent.

The working group report highlighted  that compilation of FOF accounts for Indian economy may be restructured with adoption of five mutually exclusive institutional sectors  including that of non-financial corporations, financial corporations, general government, households and non-profit institutions serving households (NPISHs) and the Rest of the World. It stated that the non-financial corporations' sector would include Non-Government Non-Financial Public and Private Limited Companies, Government Non-Financial Departmental/Non-Departmental Commercial Undertakings, Port Trusts (public and private) and Cooperative Non-Credit Societies.

Further RBI said that the FOF accounts of the provident/pension funds may be compiled separately and comprise non-government provident/ pension funds. However, the central and state government Employees' Provident Fund would be included under the central and state governments sectors, respectively. Moreover, FOF accounts of RBI and insurance companies would continue to be compiled as done at present.

Apart from this, RBI has also invited comments and feedback on recommendations of the report by September 15, 2015 by email or by post.

The CNX Nifty is currently trading at 7761.10, down by 47.90 points or 0.61% after trading in a range of 7745.00 and 7925.40. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.12%, Coal India up by 3.09%, Bajaj Auto up by 2.22%, Cairn India up by 1.79% and Zee Entertainment up by 1.71%.

On the flip side, Tata Power down by 7.47%, Lupin down by 3.94%, Bank of Baroda down by 3.34%, Tech Mahindra down by 3.08% and BHEL down by 3.05% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 13.17 points or 0.86% to 1,545.31, KOSPI Index increased 19.13 points or 1.05% to 1,848.94, Straits Times increased 42.66 points or 1.5% to 2,886.05, Jakarta Composite increased 81.24 points or 1.95% to 4,244.97, Hang Seng increased 85.53 points or 0.4% to 21,337.10 and Taiwan Weighted increased 260.33 points or 3.51% to 7,670.67.

On the other hand, Nikkei 225 decreased 183.92 points or 0.99% to 18,356.76 and Shanghai Composite decreased 167.44 points or 5.22% to 3,042.46.