Markets trade in red on profit booking after three day’s rally

Domestic equity indices opened on a positive note for the fourth straight session on Friday and recaptured their psychological levels of 7500 (Nifty) and 24700 (Sensex), thereafter, pared their gains and are now trading flat with a negative bias in early deals, as investors booked profits at higher levels. Weakness in other Asian markets too weighed the sentiment, ahead of the release of US non-farm payrolls data to be released later in the day. There was some cautiousness in the market 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. The seasonally adjusted Nikkei/Markit Services Purchasing Managers’ Index (PMI) had experienced a 19 month high rate of growth in January, marking a seventh month above the 50-level that separates growth from contraction. Moreover, PSU Banking shares were trading lower on account of profit-booking. State Bank of India IDBI Bank, Allahabad Bank, Punjab National Bank, Canara Bank, Indian Overseas Bank, Union Bank of India and Bank of Baroda were trading lower.

In the scrip specific development, Minda Industries was trading higher by over 10% on the BSE after the company announced an acquisition of the global lighting business of Spain-based Rinder Group for 20 million Euro (over Rs 145 crore).

On the global front, the US markets ended higher on Thursday, building on the gains of the week so far, as oil prices stabilized ahead of Friday's jobs data. The 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. Asian markets were trading mostly in red, after three-week recovery, with investors focus turning to China’s annual legislative sessions, a series of meetings that kick off in Beijing on Saturday.

Back home, traders were seen piling up position in Realty, Oil & Gas, FMCG, PSU and Auto, while selling was witnessed in Banking and TECK.  The market breadth on BSE was negative in the ratio of 676: 815while 58 scrips remained unchanged.

The BSE Sensex is currently trading at 24570.58, down by 36.41 points or 0.15% after trading in a range of 24557.09 and 24719.05. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.14%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Realty up by 1.52%, Oil & Gas up by 0.57%, FMCG up by 0.45%, PSU up by 0.34% and Auto up by 0.27%, while Bankex down by 0.61% and TECK down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.30%, ONGC up by 2.63%, ICICI Bank up by 2.13%, Cipla up by 1.48% and Dr. Reddys Lab up by 1.10%. On the flip side, GAIL India down by 1.90%, HDFC Bank down by 1.57%, Bharti Airtel down by 1.53%, SBI down by 1.34% and HDFC down by 1.27% 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) has 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 is currently trading at 7460.40, down by 15.20 points or 0.20% after trading in a range of 7449.25 and 7505.90. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.84%, ONGC up by 2.51%, ICICI Bank up by 2.06%, Cipla up by 1.50% and Dr. Reddys Lab up by 1.03%. On the flip side, HDFC Bank down by 1.64%, SBI down by 1.64%, Kotak Mahindra Bank down by 1.62%, GAIL India down by 1.47% and Sun Pharma Inds. down by 1.40% were the top losers.

Asian markets were trading mostly in red, Taiwan Weighted increased 23.2 points or 0.27% to 8,634.99, Hang Seng increased 126.33 points or 0.63% to 20,068.09, Jakarta Composite decreased 18.44 points or 0.38% to 4,825.60, Shanghai Composite decreased 13.89 points or 0.49% to 2,845.87, Nikkei 225 decreased 4.1 points or 0.02% to 16,956.06 and KOSPI Index decreased 0.9 points or 0.05% to 1,957.27.

On the flip side, FTSE Bursa Malaysia KLCI increased 5.82 points or 0.34% to 1,694.02.