Benchmarks extend weakness; Nifty slips below 8200 mark

Indian equity benchmarks extend their losses in the late afternoon session on account of selling in frontline blue chip counters. The street maintained a cautious approach as they counted down to Britain’s make-or-break EU referendum. Investors shrugged off UNCTAD report stating that India’s Foreign Direct Investment (FDI) is likely to cross $60 billion this year on favorable policy environment even as the FDI flows globally are set to witness a decline. Traders were seen selling in Auto, FMCG and Metal sector stocks. In scrip specific development, Dr. Reddy’s Laboratories was trading firm after the foreign brokerage firm expects re-rating to happen in the stock as earnings of India’s second biggest pharma company recovers and US regulatory issues are resolved. Thomas Cook (India) was trading in green after its Bengaluru-based subsidiary Quess Corp has announced its Rs 400 crore Initial Public Offer (IPO). Tata Coffee was trading in green as coffee prices gained further hitting 13 month highs.

On the global front, the Asian markets were trading mostly in green while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,200 and 26,800 levels respectively. The market breadth on BSE was negative in the ratio of 899:1527 while 182 scrips remained unchanged.

The BSE Sensex is currently trading at 26704.07, down by 108.71 points or 0.41% after trading in a range of 26617.45 and 26887.29. There were 9 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.26%, while Small cap index down by 0.58%.

The losing sectoral indices on the BSE were Auto down by 0.90%, FMCG down by 0.54%, Metal down by 0.50%, Capital Goods down by 0.48% and Power down by 0.47%.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.51%, Adani Ports & Special Economic Zone up by 0.79%, Coal India up by 0.66%, Lupin up by 0.58% and Hero MotoCorp up by 0.48%.

On the flip side, Tata Motors down by 3.06%, GAIL India down by 1.65%, Hindustan Unilever down by 1.39%, Tata Steel down by 1.32% and Infosys down by 1.04% were the top losers.

Meanwhile, with an aim to monetize government's stake in listed PSUs, the Finance Ministry is planning to launch a new Exchange Traded Fund (ETF) as an additional mechanism to the existing Central Public Sector Enterprises (CPSE) ETF, comprising stocks of listed CPSEs and government’s stake in other corporate entities.

The Department of Investment and Public Asset Management (DIPAM) has invited bids for the second ETF from 'Advisors' by July 11to help create and launch the proposed fund. Under the new ETF government will appoint one advisor for the new CPSE ETF, which will be involved in a three stage process wherein stage-I shall be to help create a new ETF, stage-II shall include helping select an Asset Management Companies (AMC), a Legal Adviser and help launch and manage NFO. Stage III shall comprise FFO (follow on offer)/Tap and any other subsequent offerings and obligations arising out of NFO (New Fund Offer)/FFO/Tap.

DIPAM has also stated that the entity appointed as Advisor, will not be eligible to participate for selection as the AMC or ETF provider, so as to avoid any situation of conflict of interest. The ETF may include government stake in companies held through SUUTI as well as those in which it still has some holding. Among the listed entities, SUUTI holds 11.72 per cent in Axis Bank, 11.27 per cent in ITC and 8.18 per cent in L&T.

The CNX Nifty is currently trading at 8179.40, down by 40.50 points or 0.49% after trading in a range of 8153.25 and 8238.35. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 1.70%, Ambuja Cement up by 1.12%, Adani Ports & Special Economic Zone up by 0.74%, Coal India up by 0.72% and Lupin up by 0.58%.

On the flip side, Tata Motors - DVR down by 3.45%, Tata Motors down by 3.01%, Bharti Infratel down by 2.54%, GAIL India down by 1.83% and Hindalco down by 1.70% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 9.88 points or 0.5% to 1,992.58, Jakarta Composite increased 11.01 points or 0.23% to 4,889.73, Shanghai Composite increased 26.99 points or 0.94% to 2,905.55, Taiwan Weighted increased 31.4 points or 0.36% to 8,716.25 and Hang Seng increased 126.68 points or 0.61% to 20,795.12.

On the other hand, Nikkei 225 decreased 103.39 points or 0.64% to 16,065.72. Kuala Lumpur Stock Exchange was closed on account of ‘Nuzul Al-Quran’ holiday.

The European markets were trading in green; UK’s FTSE 100 increased 3.16 points or 0.05% to 6,229.71, France’s CAC increased 13.31 points or 0.3% to 4,380.55 and Germany’s DAX increased 47.94 points or 0.48% to 10,063.48.