Markets continue to trade sluggish in early noon session

Indian equity benchmarks continued to trade sluggish in early noon session, on the back of sustained selling in the blue chip stocks such as FMCG, PSU, Bankex, Consumer Durables and Power. Sentiment remained down beat with sustained fund outflows and weak trend at other Asian markets after the minutes of the Federal Reserve's end-April meeting showed the central bank far more bullish about a possible June rate hike than the markets had understood. Further, market participants remained cautious ahead of the Assembly election results in four states -- Tamil Nadu, Kerala, West Bengal and Assam. Besides, fall in the crude oil prices and depreciating rupee to a two-month low of 67.20 against the US dollar too dampened the market sentiment. However, losses remained capped with global rating agency Standard and Poor’s (S&P) statement that India is likely to remain insulated from the developments in the Chinese economy provided the government carries out structural reforms to take the economy to an eight per cent growth path. Some support also came in with Chief Economic Advisor Arvind Subramanian’ statement that a good monsoon will have positive effect on the Indian economy and inflation will come down, growth will increase, rural consumption will increase. 

On the global front, Asian stocks fell and the U.S. dollar stood tall on Thursday as markets scrambled to factor in the possibility of another interest rate increase by the Federal Reserve as early as June. Gold stumbled. Back home, in scrip specific development, share of Balkrishna Industries was trading higher after the company reported 0.45 per cent rise in net profit figures at Rs 154.99 crore for the fourth quarter ended March 2016.

The BSE Sensex is currently trading at 25630.88, down by 73.73 points or 0.29% after trading in a range of 25555.42 and 25714.56. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15%, while Small cap index up by 0.44%.

The top gaining sectoral indices on the BSE were Realty up by 1.43%, Metal up by 0.85%, Auto up by 0.29% and IT up by 0.22%, while FMCG down by 0.86%, PSU down by 0.32%, Bankex down by 0.25%, Consumer Durables down by 0.24% and Power down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were Lupin up by 2.65%, Tata Steel up by 1.78%, Tata Motors up by 1.45%, BHEL up by 1.42% and Wipro up by 0.70%. On the flip side, HDFC down by 1.84%, ITC down by 1.68%, SBI down by 1.66%, ONGC down by 1.40% and NTPC down by 1.14% were the top losers.

Meanwhile, the government has approved three Foreign Direct Investment (FDI) proposals worth Rs 60.73 crore, based on the recommendations of the Foreign Investment Promotion Board (FIPB) in its 234th meeting, all related to the pharmaceutical sector viz. Wockhardt, Aurobindo Pharma and Advanced Enzyme Technologies. FIPB has also recommended one Axis Bank’s proposal worth Rs. 12,973.14 crore for approval of Cabinet Committee on Economic Affairs (CCEA). This is in line with the government's decision to refer all FDI proposals above Rs. 5,000 crore to the CCEA.

The highest FDI proposal which got the nod was from Advanced Enzyme Technologies. The company sought approval for investment proposed to be made by FIIs / NRIs / FPIs / QFIs / AIF/FVCIs pursuant to fresh issue of and offer for sale of 44,73,470 equity shares by certain NRIs and resident shareholders worth Rs 60 crore. The other two companies whose proposals were approved include Wockhardt, which asked for post facto approval for issuance of ESOPs to its two NRI employees, and Aurobindo Pharma which sought clarification and approval regarding grant of ESOPs to a non-resident employee.

Meanwhile, eight FDI proposals including those from Macmillan Publishers, UK, JCB International, Janalakshmi Financial Services and Fans Asia have been deferred, while a proposal by Rafique Dawood in the manufacturing sector has been rejected.

The CNX Nifty is currently trading at 7848.55, down by 21.60 points or 0.27% after trading in a range of 7826.20 and 7876.20. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Lupin up by 2.37%, Tata Steel up by 1.82%, Hindalco up by 1.63%, BHEL up by 1.63% and Tata Motors up by 1.55%. On the flip side, HDFC down by 1.92%, Bank of Baroda down by 1.72%, SBI down by 1.61%, ITC down by 1.56% and ONGC down by 1.38% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 100.72 points or 0.51% to 19,725.69, Taiwan Weighted decreased 63.7 points or 0.78% to 8,095.98, Jakarta Composite decreased 33.54 points or 0.71% to 4,700.82, KOSPI Index decreased 9.95 points or 0.51% to 1,946.78 and FTSE Bursa Malaysia KLCI decreased 1.14 points or 0.07% to 1,634.58, while Shanghai Composite increased 8.02 points or 0.29% to 2,815.53 and Nikkei 225 increased 15.12 points or 0.09% to 16,659.81.