Markets pare some gains, still manages to hold in green

Indian markets are still not out of woods, despite showing a better performance to some other markets in reaction to the Brexit development. Both the major averages were managing to hold their gains of about a quarter percent but the volatility is visible with profit taking appearing at every higher level. The Asian peers were though mostly in green on hopes of some stimulus. Back on street, in sector specific action, consumer demand related indices have gained some strength on reports that the Centre is likely to announce the implementation of the seventh pay commission recommendations soon after a panel headed by Cabinet secretary P K Sinha to examine the proposals submitted its report. On the same time the interest rate sensitive stocks too were in action after the finance ministry announced that it has initiated the process to constitute Monetary Policy Committee (MPC) under the Reserve Bank of India Act, 1934. The major gainers were the PSU oil marketing companies, as the international crude prices slumped to near six weeks low. The broader markets too despite paring some gains were outperforming the benchmarks

The BSE Sensex is currently trading at 26441.57, up by 38.61 points or 0.15% after trading in a range of 26378.46 and 26490.31. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index added 0.66%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.83%, FMCG up by 0.74%, Oil & Gas up by 0.51%, Metal up by 0.48%, PSU up by 0.45% , while IT down by 0.36%, Auto down by 0.12%, Consumer Durables down by 0.06%, TECK down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.16%, Bharti Airtel up by 1.95%, Lupin up by 1.70%, Larsen & Toubro up by 1.02% and HDFC Bank up by 0.75%. On the flip side, Tata Motors down by 1.88%, NTPC down by 1.01%, ICICI Bank down by 0.75%, Wipro down by 0.59% and GAIL India down by 0.59% were the top losers.

Meanwhile, in order to sort out differences over a proposal of the department of industrial policy and promotion (DIPP) to completely ban foreign direct investment (FDI) in the tobacco sector, the DIPP is holding talks with NITI Aayog which has Aayog has expressed its reservation on certain issues on the plan.

Earlier, the DIPP had proposed to ban FDI in technological collaboration in the tobacco sector in any form, including licensing for franchise, trademark, brand name and management contract. It eventually mean that FDI to be banned completely in the tobacco segment in any form. Though the FDI is already banned in the manufacturing of cigars, cigarettes of tobacco and tobacco substitutes, the latest proposal was aimed at completely choking flow of such investments into the sector.

On the other hand the NITI Aayog expressed its concern on the DIPP proposal to ban FDI in technological collaboration in the tobacco sector in any form, stating that this move may send a wrong signal to the foreign investor community, at the time when India has relaxed rules substantially to become the world’s most liberalized country for FDI. Cigarette manufacturers, too expressed their concern against the DIPP move.

The proposal is however having support of the finance ministry and the commerce ministry, which is the administrative authority of the state-run Tobacco Board, and is in conformity to the Framework Convention on Tobacco Control, of India is a signatory, under which it has the responsibility of reducing consumption of tobacco products. The ban would eliminate the possibility of indirect flow of overseas funds to the tobacco sector.The CNX Nifty is currently trading at 8107.85, up by 13.15 points or 0.16% after trading in a range of 8086.85 and 8124.90. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 3.84%, Hindustan Unilever up by 2.26%, Bharti Infratel up by 2.03%, Bharti Airtel up by 1.88% and Lupin up by 1.76%. On the flip side, Tata Motors - DVR down by 2.06%, Tata Motors down by 2.04%, NTPC down by 1.14%, Zee Entertainment down by 0.86% and Yes Bank down by 0.80% were the top losers.

The Asian markets were trading mostly in green, Shanghai Composite was up by 4.16 points or 0.14% to 2,899.86, KOSPI Index gained 7.77 points or 0.4% to 1,934.62, Jakarta Composite gained 26.5 points or 0.55% to 4,862.56, Taiwan Weighted increased by 46.64 points or 0.55% to 8,505.51 and Nikkei 225 was higher by 83.74 points or 0.55% to 15,392.95.

On the other hand, Hang Seng declined by 162.92 points or 0.81% to 20,064.38, while FTSE Bursa Malaysia KLCI was lower by 1.1 points or 0.07% to 1,628.42.