Benchmarks manage to keep their head above water in noon deals

Indian equity benchmarks are trading flat in noon deals owing to lack of directional cues. Traders were getting some encouragement with former governor of RBI C Rangarajan’s statement that Indian economy will slightly perform better this year as the productivity level of capital may remain high. However, gains remained capped on reports that overseas investors have pulled out more than $1billion from the Indian capital markets since the beginning of the month due to lacklustre quarterly earnings and concerns over a possible rate hike by the US Federal Reserve.

On the global front, Asian markets were trading mostly in green at this point of time after US shares had their best week this year and investors shook off concerns about terror attacks in Paris and Mali. Back home, on the sectoral front, realty, software and capital goods witnessed the maximum gain in trade, while metal and fast moving consumer goods remained the only losers on the BSE sectoral space. The broader indices were outperforming benchmarks, while the market breadth on the BSE was negative; there were 1448 shares on the gaining side against 916 shares on the losing side while 163 shares remain unchanged.

The BSE Sensex is currently trading at 25891.39, up by 22.90 points or 0.09% after trading in a range of 25825.76 and 25958.04. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.42%, while Small cap index up by 0.68%.

The top gaining sectoral indices on the BSE were Realty up by 0.97%, IT up by 0.69%, Capital Goods up by 0.69%, TECK up by 0.68% and Auto up by 0.63%, while Metal down by 0.97% and FMCG down by 0.91% were the only losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 3.56%, Bajaj Auto up by 2.23%, Dr. Reddys Lab up by 1.68%, Lupin up by 1.44% and BHEL up by 1.13%. On the flip side, Hindalco down by 3.62%, Vedanta down by 2.68%, ITC down by 2.25%, Tata Steel down by 1.78% and Cipla down by 1.13% were the top losers.

Meanwhile, the government has recently made some changes to the investment regulations, in order to attract foreign inflows into Alternative Investment Funds (AIFs), Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs). The inflows are believed to be one of the key drivers for India’s economic growth. AIFs, REITs and InvITs are expected to provide impetus to various crucial sectors of the Indian economy. Therefore, foreign investment in these Investment Vehicles has on the radar of the Union Government in recent times.

As per the latest changes, Investments by non-resident Indians and other foreign investors into such funds or trusts will now be allowed under the automatic route. The recent changes also do away with a number of ambiguities surrounding the status of the trusts from an FDI point of view. Earlier, while the trusts were regulated by SEBI, there was no provision under the FDI policy for classification of such trusts as Indian-owned and controlled or otherwise. Though, these developments are positive, the government may still have to determine certain tax delays to ensure large investments into these trusts.

AIFs, Infrastructure Investment Trusts and REITs are all investment vehicles regulated by capital markets regulator Security exchange Board of India (SEBI). Formed as a trust for the purpose of pooling in capital, any foreign investment into them required an approval from the Foreign Investment Promotion Board (FIPB) which was time consuming.

The CNX Nifty is currently trading at 7856.80, up by 0.25 points after trading in a range of 7846.80 and 7877.50. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.63%, Zee Entertainment up by 2.79%, Adani Ports & Special up by 2.67%, Asian Paints up by 2.13% and Bajaj Auto up by 1.87%. On the flip side, Hindalco down by 3.69%, Vedanta down by 2.90%, ITC down by 2.24%, Tata Steel down by 2.20% and Bank of Baroda down by 1.57% were the top losers.

Most of the Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 10.67 points or 0.64% to 1,672.56, KOSPI Index rose 13.84 points or 0.7% to 2,003.70, Jakarta Composite gained 14.31 points or 0.31% to 4,575.65 and Taiwan Weighted was up by 20.28 points or 0.24% to 8,485.73. On the flip side, Hang Seng decreased 92.9 points or 0.41% to 22,661.82 and Shanghai Composite was down by 12.52 points or 0.34% to 3,617.98.