Benchmarks reverse gears; slip into negative territory in absence of positive triggers

After getting good starts, Indian benchmarks give up their early gained and slipped in negative territory in late morning session on account of selling in frontline blue-chip stocks. Sentiments remained down-beat with United Nations has downgraded its GDP growth forecast for India for 2016 to 7.5 per cent from 8.2 per cent estimated earlier, largely due to slow progress in implementing reform policies.  Furthermore, SEBI Chairman UK Sinha said the Chinese slowdown concerns have posed a new challenge for India and raised uncertainty over the country's growth. However, losses remained capped with Finance Minister Arun Jaitley’s statement that India has emerged among the few large economies in the world with a promising economic outlook. He also added that Economic growth is moving in the right direction and its pace is expected to gather momentum in the coming quarters, once the impact of the on-going economic and structural reforms takes the firm root.

On the global front, Asian markets give up their early gain and were trading mostly in red, as renewed pressure on oil prices and disappointing Chinese data kept investors on edge. On the other hand, US stocks staged a recovery on Thursday to end nearly 1% higher led by energy shares after crude oil prices rebounded from their-12-year lows and were trading above $30 a barrel. Besides, upbeat earnings from financial major JP Morgan also boosted sentiment. Back home, stocks from IT, Teck and Oil & Gas counters were supporting the markets’ uptrend, while those from PSU, Metal and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of Infosys have surged in early trade, extending its previous days 5% rally, as the company delivered a robust numbers for the third quarter ended December 31, 2015 (Q3FY16). Furthermore, Idea Cellular has gained after the company launched world class high-speed 4G LTE services in three more telecom service areas expanding its 4G offering to 7 circles.

The market breadth on BSE was negative, out of 2279 stocks traded, 981 stocks advanced, while 1172 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24708.19, down by 64.78 points or 0.26% after trading in a range of 24699.59 and 24912.64. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in mix; the BSE Mid cap index was down by 0.08%, while Small cap index up by 0.03%.

The top gaining sectoral indices on the BSE were IT up by 0.31%, TECK up by 0.10% and Oil & Gas up by 0.08%, while PSU down by 0.68%, Metal down by 0.67%, Capital Goods down by 0.63%, Auto down by 0.62% and FMCG down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.88%, Infosys up by 1.36%, Maruti Suzuki up by 1.24%, Dr. Reddys Lab up by 0.46% and Axis Bank up by 0.28%. On the flip side, GAIL India down by 3.08%, ONGC down by 2.20%, Tata Motors down by 1.93%, Bajaj Auto down by 1.46% and Bharti Airtel down by 1.46% were the top losers.

Meanwhile, based on the recommendations of Foreign Investment Promotion Board (FIPB), the government in its meeting chaired by Economic Affairs Secretary Shaktikanta Das, has approved five Foreign Direct Investment proposals amounting Rs 6,050 crore, including Cadila Healthcare with investment of Rs. 5,000-crore for fresh equity infusion. Cadila will infuse equity of up to Rs. 5,000 crore through issue of shares to QIBs through Qualified Institutional Placement for expansion.

Besides, other proposals which were approved includes Sai Life Sciences which sought approval for Alpha TC Holdings to transfer its shares held in Sai Life to its wholly-owned subsidiary (WoS) Alpha FDI Holdings and deletion of condition of compounding by the Reserve Bank of India imposed in the approval letter, Health Media Publishing which sought approval for the transfer of its 99.90% shares currently held by Mr Ajit Patel, an NRI to Wellness Technology and Media Private, UK. The other major proposal approved was of Recipharm Participation BV for incorporating a WoS in India. The pharma firm’s proposal worth Rs. 1,050 crore also included the WoS buying out promoter stake in Nitin Lifesciences and increasing foreign equity to 74 per cent. Also approved was Buimerc Core Investments proposal for transferring of 100 per cent equity shares of NRI investors and Resident Investors to Buimerc Corporation FZE.

Meanwhile, FIPB deferred six FDI proposals including Gulf Quarry General Trading F.Z.C., International Asset Reconstruction Company, Raheja QBE General Insurance Company, Equitas Holding, HSBC Securities and Capital Markets (India) and Holcim (India). However, FIPB rejected two proposals including Nigeria’s Mokeme Chiwetal Izuchukwu and Lanarth Developers.

The CNX Nifty is currently trading at 7517.20, down by 19.60 points or 0.26% after trading in a range of 7511.70 and 7566.50. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.92%, BPCL up by 1.85%, Maruti Suzuki up by 1.28%, Infosys up by 0.97% and Indusind Bank up by 0.97%. On the flip side, GAIL India down by 3.06%, Tata Motors down by 1.71%, ONGC down by 1.55%, Bajaj Auto down by 1.49% and Zee Entertainment down by 1.43% were the top losers.

Asian markets were trading mostly in red; Hang Seng was down by 0.81%, Nikkei 225 down by 0.5%, Shanghai Composite down by 1.54%, Taiwan Weighted down by 0.32% and KOSPI Index down by 1.23%. On the flip side, FTSE Bursa Malaysia KLCI was up by 0.31% and Jakarta Composite was up by 0.37%.