Benchmarks consolidate after three days of solid gains

Friday’s trading session was of consolidation as the Indian frontline indices appeared a bit fatigued and remained in directionless trajectory for most part of the day. Nevertheless, the benchmarks managed to extend the winning momentum for the fourth consecutive day of trade, as local sentiments continued to show signs of improvement. Markets got some support with Prime Minister Narendra Modi’s statement that India is set to take a quantum leap in infrastructure and the government is committed to strengthening it. The Prime Minister has unveiled an ambitious Rs 50,800 crore Setu Bharatam project, under which a total of 208 railway crossings will be replaced by rail over bridges (ROBs). As part of the project, 1,500 bridges of the British era will be overhauled at an estimated expenditure of Rs 30,000 crore. Investors also got some comfort with the report that foreign portfolio investors (FPIs) bought shares worth a net Rs 911.98 crore on March 03, 2016. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Staying on the upward trajectory for the sixth straight day, Indian rupee gained another 13 paise to trade at 67.21 against the US dollar at the time of equity markets closing. Some support also came with Minister of State for Finance Jayant Sinha’s statement that the government has a ‘very good sense’ of the problem of bad loans in banking sector and will continue to provide funds to strengthen state-owned banks. However, investors remained cautious with weak services PMI data released last day. Growth in India's services firms fell to a three-month low of 51.4 in February from 54.3 in January, as output rose only marginally.

On the global front, Asian stock markets ended mostly in green on Friday, as global investors returned to riskier assets after a string of positive US economic data and a bounce in oil and commodity prices. The optimism flowed to European shares, which made a firm start as solid results at chipmaker Gemalto and firmer mining stocks kept equities on their recent upwards trajectory. However, gains remained modest ahead of the release of the closely-watched US jobs data later in the day. Investors will also focus on the annual session of China's National People's Congress that begins in Beijing on Saturday.

Back home, after getting strong start, Indian equity benchmarks dropped into the negative territory, lacking any significant upside cues and slipped to intraday lows in mid morning session. However, the psychological 7,450 and 24,550 levels proved as strong support levels for the key gauges as the benchmarks soon recovered from the lows and oscillated in a narrow band near neutral line. Yet, some late short covering in blue-chip stocks and supportive leads from European markets ensured that local bourses go home with small gains. Finally, the NSE’s 50-share broadly followed index Nifty, added single digit gains to settle below the crucial 7,500 support level, while Bombay Stock Exchange’s Sensitive Index or Sensex gained around thirty nine points and ended below the psychological 24,650 mark. Moreover, broader markets showed some resilience by outclassing their larger peers by a big margin as investors carried forward their value hunting in beaten down shares from the midcap and small cap space. On the BSE sectoral space, Metal counter remained the top gainer in the space with over two percent gains followed by the high beta- PSU index which ended with similar gains. On the other hand, the IT index slipped by around half a percent followed by the TECK and Consumer Durables counters, which settled with moderate losses. The market breadth remained optimistic as there were 1525 shares on the gaining side against 1078 shares on the losing side while 145 shares remained unchanged.

Finally, the BSE Sensex gained 39.49 points or 0.16% to 24646.48, while the CNX Nifty rose 9.75 points or 0.13% to 7,485.35.

The BSE Sensex touched a high and a low 24719.05 and 24531.80, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 1.13%, while Small cap index gained 0.75%

The top gaining sectoral indices on the BSE were Metal up by 2.15%, PSU up by 1.94%, Bankex up by 1.28%, Power up by 1.19% and Realty up by 1.00%, while IT down by 0.46%, TECK down by 0.41% and Consumer Durables down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were BHEL up by 4.03%, Coal India up by 3.30%, SBI up by 3.23%, Tata Motors up by 2.14% and Cipla up by 2.06%. On the flip side, Sun Pharma down by 1.51%, Asian Paints down by 1.48%, Maruti Suzuki down by 1.28%, Larsen & Toubro down by 1.03% and Bharti Airtel down by 1.00% were the top losers.

Meanwhile, in order to put in place the regulatory framework to allow a new kind of Non-Banking Financial Company (NBFC), which could act as an account aggregator, the Reserve Bank of India (RBI) released a draft of the directions (Non-Banking Financial Company - Account Aggregator (Reserve Bank) Directions, 2016).

In its draft framework, RBI has stated that only companies registered with the RBI as NBFC–AA will be able to undertake the business of an account aggregator and the net owned fund of such companies should not be less than Rs 2 crore and they cannot provide any services other than account aggregation. RBI will regulate and supervise the activity of account aggregation while adding that entities being regulated by other financial sector regulators and aggregating only those accounts relating to the financial assets of that particular sector will not need to register with the RBI.

Account aggregators help in collecting and providing the information of customers’ financial assets in a consolidated, organised and retrievable manner to the customer or any other person as per the instructions of the customer. At present, persons holding financial assets, such as, savings bank deposits, fixed deposits, mutual funds, insurance policies, do not get a consolidated view of their financial asset holdings, especially when the entities fall under the purview of different financial sector regulators. Account Aggregators would fill this gap by collecting and providing the information of customers’ financial assets in a consolidated, organised and retrievable manner to the customer or any other person as per the instructions of the customer. The investors will be able to avail the service of an account aggregator purely at their option.

Initially, only financial assets whose records are stored electronically and are under the regulation of the financial sector regulators -- RBI, SEBI, IRDA, and PFRDA -- would be considered for aggregation. The draft has further said that the NBFCs would provide account aggregation services in response to a specific application by the customer for availing such services and would be backed by appropriate agreements and authorizations.

The CNX Nifty touched a high and low 7,505.90 and 7,444.10 respectively. 

The top gainers on Nifty were PNB up by 5.51%, BHEL up by 4.26%, Vedanta up by 3.81%, SBI up by 3.47% and Coal India up by 3.47%. On the flip side, HCL Tech down by 2.82%, Tech Mahindra down by 2.54%, Idea Cellular down by 2.40%, Asian Paints down by 1.51% and Sun Pharma down by 1.49% were the top losers.

European markets were trading in green; France’s CAC increased 9.14 points or 0.21% to 4,425.22, Germany’s DAX rose 14.73 points or 0.15% to 9,766.65 and UK’s FTSE 100 was up by 23.28 points or 0.38% to 6,153.74.

Asian markets ended mostly higher on Friday as global investors returned to riskier assets after a string of positive US economic data and a bounce in oil and commodity prices. US data on Thursday was positive on the whole, with factory orders rising and the service sector index showing continued expansion. Investors are now keenly awaiting today's key US employment report and China's annual legislative sessions starting on Saturday. The US Labor Department's monthly jobs report is expected to show an increase of about 190,000 jobs in February following the addition of 151,000 jobs in January. The unemployment rate is expected to hold at 4.9 percent. China stocks rose for their fourth straight day, as a tumble in small-caps triggered by supply fears was offset by a surge in banks amid speculation that government-backed investors helped stabilise the market ahead of a key meeting by China's parliament.