Benchmarks trade in red; Nifty slips below 8,200 mark

After witnessing a sharp fall in previous session, Indian equity markets once again made a sombre start and are now trading with modest losses in early deals, as investors turned cautious ahead of Industrial production data slated to be announced later in the day, the IIP for March 2016 was just 0.1 per cent higher as compared to the level in March 2015. Weakness in global markets too weighted down sentiments, as market participants remained cautious ahead of the US Federal Reserve meet and worries regarding a UK referendum that could push Britain out of the European Union. However, the session was productive for broader indices, which outperforming larger counterparts were trading in green. Sentiments got some support on report that the foreign portfolio investors (FPIs) bought shares worth a net Rs 234.20 crore June 9, 2016, as per provisional data released by the stock exchanges.  Further, traders were also getting encouragement with news of Indirect tax collections rising by about 37 per cent during April-May compared to the same period of the last fiscal. Besides, buying in logistics companies for the fourth straight session too supported sentiments. Gati, Snowman Logistics, Sical Logistics, Allcargo Logistics, Patel Integrated Logistics and VRL Logistics were trading higher on hopes of clearance of the goods and services tax (GST) Bill in the upper house of the Parliament.

On the global front, US markets ended lower on Thursday, as prominent billionaire investors George Soros and Carl Icahn delivered stinging public comments on the weakening state of the global economy. Asian markets were trading in red following the weak lead overnight from Wall Street and lower crude oil prices.

On the sectoral front, traders were seen piling up position in Power, Metal, Capital Goods, Realty and PSU, while selling was witnessed in IT, TECK, Banking, Auto and Consumer Durables. The market breadth on BSE was positive in the ratio of 996:495, while 68 scrips remained unchanged.

The BSE Sensex is currently trading at 26724.88, down by 38.58 points or 0.14% after trading in a range of 26683.08 and 26749.02. There were 16 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.22%, while Small cap index gained 0.41%.

The top gaining sectoral indices on the BSE were Power up by 1.04%, Metal up by 0.75%, Capital Goods up by 0.58%, Realty up by 0.49% and PSU up by 0.49%, while IT down by 0.36%, TECK down by 0.33%, Bankex down by 0.18%, Auto down by 0.15% and Consumer Durables down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.64%, Adani Ports &Special up by 1.41%, NTPC up by 0.93%, Cipla up by 0.93% and Lupin up by 0.69%. On the flip side, Infosys down by 0.92%, ICICI Bank down by 0.73%, Tata Motors down by 0.63% Dr. Reddys Lab down by 0.51% and Asian Paints down by 0.50% were the top losers.

Meanwhile, the National Institution for Transforming India (Niti) Aayog has raised concern over a proposal by the Department of Industrial Policy and Promotion (DIPP) to completely ban foreign direct investment (FDI) in the tobacco sector. Reportedly, the DIPP has the Union Finance Ministry's support and is expected to discuss the plan with the Department of Commerce and NITI Aayog soon.

At present, in the tobacco sector, FDI is permitted in technology collaboration in any form, including licensing for franchise, trademark, brand name and management contract. However, FDI is prohibited in manufacturing of cigars, cigarettes of tobacco and tobacco substitutes. The DIPP's proposal will mean there would be a ban on FDI even in the non-manufacturing and technology collaboration areas, leading to a total ban on FDI in the tobacco sector.

Not will NITI Aayog but the major cigarette manufacturers too are against the proposal, as it will mean there would not be any possibility of indirect flow of overseas funds to the tobacco sector, as the ban will also apply to foreign technology collaboration.

As India has signed the WHO Framework Convention on Tobacco Control, which seeks “to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco consumption and exposure to tobacco smoke”, it along with all other signatories have the responsibility to reduce consumption of tobacco products.

The CNX Nifty is currently trading at 8194.70, down by 8.90 points or 0.11% after trading in a range of 8179.05 and 8199.15. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were BHEL up by 1.86%, Adani Ports &Special up by 1.63%, Hindalco up by 1.35%, Ambuja Cement up by 1.34% and Yes Bank up by 1.16%. On the flip side, Aurobindo Pharma down by 1.48%, Tata Motors - DVR down by 1.22%, Infosys down by 1.05%, ICICI Bank down by 0.90% and Tata Motors down by 0.82% were the top losers.

Asian markets were trading in red, Hang Seng decreased 184.22 points or 0.86% to 21,113.66, Nikkei 225 decreased 81.7 points or 0.49% to 16,586.71, KOSPI Index decreased 8.45 points or 0.42% to 2,015.72, Jakarta Composite decreased 4.24 points or 0.09% to 4,872.56 and FTSE Bursa Malaysia KLCI decreased 4.17 points or 0.25% to 1,646.34.