Benchmarks pare early gains; IT shares weigh

Indian equity benchmarks have pared all its initial gains and are trading slightly in red in morning deals with traders booking profit at higher levels. Market participants failed to get encouragement, with government expressing hope that the Rajya Sabha will clear the indirect tax reform in the first week of August on the back of support from regional parties. Continued sulk in software pack also dampened sentiments despite Nasscom, the industry body, stating that it didn't see any reason to cut its growth forecast of 10-12 per cent for FY2017 even as big IT firms continued to disappoint in June quarter. The industry body sees no threat to the demand outlook for the industry.

However, losses remained capped with some support coming from strong global cues where most of the regional counters were trading in green at this point of time on the back of improved inflow of funds to emerging markets, while recovery in global crude oil prices also aided sentiment. Japanese shares were among the top gainers on the back of a stronger dollar against the yen.

Back home, report that foreign institutional investors were net buyers in equities worth Rs 215 crore on Wednesday too capped the downside. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1,071 shares on the gaining side against 794 shares on the losing side while 91 shares remain unchanged.

The BSE Sensex is currently trading at 27890.83, down by 25.06 points or 0.09% after trading in a range of 27889.15 and 27988.76. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.64%, while Small cap index gained 0.39%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.37%, PSU up by 0.51%, Healthcare up by 0.49%, Energy up by 0.45% and FMCG up by 0.43%, while Capital Goods down by 0.53%, Metal down by 0.39%, IT down by 0.25%, TECK down by 0.20% and Bankex down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 1.18%, Cipla up by 0.91%, Wipro up by 0.63%, ITC up by 0.62% and Sun Pharma up by 0.53%. On the flip side, Axis Bank down by 1.19%, Mahindra & Mahindra down by 1.00%, Dr. Reddys Lab down by 0.88%, Larsen & Toubro down by 0.86% and TCS down by 0.71% were the top losers.

Meanwhile, putting an end the long pending issue of relaxing FDI policy in print media, the government has finally decided not to raise foreign direct investment (FDI) limit on newspapers and periodicals to 49 percent from the current 26 percent. The Department of Industrial Policy and Promotion (DIPP) who was looking at the proposal after being asked by the Department of Economic Affairs (DEA), ruled against such an increase of FDI cap in print media sector and reportedly said that a 'considered view' was taken against increasing the FDI cap in print media sector.

The move to raise FDI limit was aimed at attracting more foreign funds and the issue of relaxing the FDI cap in print media came up for discussions last November as well as during the recent liberalisation of the norms in June and both times it was decided not to tweak the caps. At present, the FDI policy permits 26% FDI in the publishing of newspapers and periodicals dealing with news and current affairs through government approval route.

Recently, the government had announced a series of changes in its FDI policy, opening sectors like pharmaceuticals industry, civil aviation, animal husbandry, and e-commerce related to food products manufactured in India and broadcast technology such as DTH, cable and mobile television to 100% FDI. During 2015-16, FDI into the country increased by 29 percent to $40 billion from $30.93 billion in the previous fiscal.

The CNX Nifty is currently trading at 8556.65, down by 9.20 points or 0.11% after trading in a range of 8555.90 and 8585.25. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.25%, Aurobindo Pharma up by 1.79%, ACC up by 1.54%, GAIL India up by 1.42% and Cipla up by 1.01%. On the flip side, Axis Bank down by 1.12%, Mahindra & Mahindra down by 1.05%, TCS down by 0.93%, Dr. Reddys Lab down by 0.89% and HCL Tech. down by 0.89% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 20.85 points or 0.69% to 3,048.75, Jakarta Composite gained 22.93 points or 0.44% to 5,265.75, Taiwan Weighted added 63.35 points or 0.7% to 9,071.03, Hang Seng strengthened 154.95 points or 0.71% to 22,037.43 and Nikkei 225 was up by 167.44 points or 1% to 16,849.33.On the flip side, FTSE Bursa Malaysia KLCI decreased 6.81 points or 0.41% to 1,662.80 and KOSPI Index was down by 3.9 points or 0.19% to 2,011.56.