Benchmarks make cautious start tailing weak Asian markets

Indian equity benchmarks have made a cautious start and are trading in red in early deals amid global turmoil after Britain decided to exit the European Union in a historic referendum on June 24. Most of the Asian equity indices were trading in red at this point of time as market participants struggled to digest the uncertainty triggered by Britain’s decision. Back home, losses remained capped as some support came with Finance Minister Arun Jaitley’s statement that the impact of the Brexit vote on India would not be significant, as the underlying fundamentals of the economy were robust. Jaitley however, noted that Indian companies with significant operations in the UK would have to tailor their businesses accordingly to deal with the fallout. On the sectoral front, stocks related to pharmaceuticals, defence counters remained on buyers’ radar, as the government notified changes in the Foreign Direct Investment (FDI) policy in these sectors. Broader markets however were outperforming benchmarks. The market breadth remained in favour of advances, as there were 1,356 shares on the gaining side against 452 shares on the losing side, while 102 shares remained unchanged.

The BSE Sensex is currently trading at 26365.96, down by 31.75 points or 0.12% after trading in a range of 26298.87 and 26438.84. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.63%, while Small cap index up by 1.04%.

The top gaining sectoral indices on the BSE were Realty up by 1.57%, Oil & Gas up by 1.30%, PSU up by 1.13%, Capital Goods up by 1.09% and Basic Materials up by 1.02%, while IT down by 1.35%, TECK down by 1.15% and Auto down by 0.27% were the few losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 2.24%, SBI up by 1.56%, Larsen & Toubro up by 1.28%, Adani Ports & SEZ up by 1.21% and Hindustan Unilever up by 1.09%. On the flip side, TCS down by 2.24%, Infosys down by 1.55%, Maruti Suzuki down by 0.97%, Wipro down by 0.75% and Mahindra & Mahindra down by 0.48% were the top losers.

Meanwhile, with an aim to boost trade, government is planning to soon announce a long term multiple-entry comprehensive visa which would merge business, tourist, medical and conference visas all-into-one.  As per the new proposed category, tourists, businessmen or people coming for treatment or to attend conferences or even for film shoots all will be covered under the new category. Further, India will offer a multiple-entry 10 year visa where the visitor will not be allowed to stay permanently. Further, if a foreigner is granted long-term, multiple-entry non-working or non-permanent stay visa and his or her stay is restricted to 60 days on a visit, the government may waive the visa fee as well. However, the visitors will have to give biometric details and also fulfill various security requirements.

Moreover, India will not ask for reciprocal visa liberalisation as it is an old concept now. For sensitive countries, the government may consider extending group visa to tourists and business persons. However, discussions are also being held on whether to incorporate the new category visa with the online e-tourist visa on arrival scheme for short term visits.

The new proposed category has been recommended by the Commerce Ministry following a suggestion by the Prime Minister's Office (PMO) to boost services trade and attract more foreigners. The Home Ministry is working on the proposal and is hopeful to implement it soon.

The proposal for new category visa assumes significance as the services sector constitutes about 60 per cent of India’s GDP but its share in global export of services remains at a low 3.15 per cent. Opportunities worth $80 billion annually lie unused in terms of attracting foreigners and foreign exchanges. Medical tourism in India alone is expected to be valued at $3 billion and projected to grow to $7-8 billion by 2020.

The CNX Nifty is currently trading at 8078.80, down by 9.80 points or 0.12% after trading in a range of 8039.35 and 8100.75. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.41%, ACC up by 2.24%, Dr. Reddys Lab up by 2.07%, Aurobindo Pharma up by 1.77% and BHEL up by 1.73%. On the flip side, TCS down by 2.34%, Infosys down by 1.55%, Maruti Suzuki down by 1.16%, Zee Entertainment down by 1.05% and Tech Mahindra down by 0.85% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 148.25 points or 0.73% to 20,110.88, Taiwan Weighted slipped 23.38 points or 0.28% to 8,453.61, Jakarta Composite dipped 16.8 points or 0.35% to 4,817.77, FTSE Bursa Malaysia KLCI shed 9.87 points or 0.6% to 1,624.18 and KOSPI Index was down by 3.02 points or 0.16% to 1,922.22. On the flip side, Shanghai Composite increased 24.47 points or 0.86% to 2,878.76 and Nikkei 225 was up by 291.98 points or 1.95% to 15,244.00.