Benchmarks slip after a positive start; IGL tanks over 40%

Indian equity markets have made the positive start but, slipped into the red as participants booked their initial profits amid somber global cues. The US markets settled on a disappointing note overnight as investors reacted to last week’s poor jobs report. The Asian markets have got off to a mixed opening as some markets have recovered after the sharp decline in previous session. However, sentiments in the region remained cautious as the Chinese markets declined ahead of the Chinese trade data announcement. Back home, uncertainty over the GAAR provisions amid reports that FIIs have asked the government to remove the applicability of GAAR to foreign portfolio investment too dampening the sentiments. On the sectoral front, fast moving consumer goods, software and technology remained the few gainers while, oil and gas, public sector undertaking and power remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth has made a negative start; there were 569 shares on the gaining side against 676 shares on the losing side while 63 shares remained unchanged.

Meanwhile, shares of Indraprastha Gas dropped over 40 percent in early trade after Gas board ordered cuts in rates, charges for CNG & PNG to Delhi consumers. The price of compressed natural gas (CNG) in the capital could come down by 20 per cent and of piped natural gas (PNG) by 10 per cent in the wake of an order on Monday by the Petroleum and Natural Gas Regulatory Board (PNGRB). Other gas providers like GAIL, Petronet LNG, Gujarat State Petronet and Gujarat Gas tanked 10-14%.

The BSE Sensex opened at 17,259.26; about 37 points higher compared to its previous closing of 17,222.14, and has touched a high and a low of 17,270.46 and 17,157.27 respectively.

The index is currently trading at 17,197.12, down by 25.02 points or 0.15%. There were 11 stocks advancing against 19 declines on the index.

The overall market breadth has made a negative start with 43.50% stocks advancing against 51.68% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.73% and 0.14% respectively. 

The few gaining sectoral indices on the BSE were, FMCG up by 0.35%, IT up by 0.31% and TECk up by 0.23%. While, Oil and Gas down by 0.96%, PSU down by 0.84%, Power down by 0.64%, Metal down by 0.45% and CG down by 0.43% were the top losers on the index.

The top gainers on the Sensex were Wipro up by 1.02%, Hindalco up by 0.79%, HUL up by 0.63%, SBI up by 0.60% and Tata Motors up by 0.60%.

On the flip side, GAIL down by 5.00%, BHEL down by 1.42%, Coal India down by 1.38%, Hero MotoCorp down by 1.36% and ONGC down by 1.25% were the top losers on the index.

Meanwhile, the government is expected to put forth a clear definition of a ‘joint venture’ (JV) in its consolidated foreign direct investment (FDI) policy, which is to be unveiled shortly. As per the new definition, it would be mandatory for at least two partners to have minimum 25% stake each in the JV Company. The move has been necessitated by the fact that lack of any prescribed definition was leading to cases where companies were entering into partnership without any minimum prescribed investment limit and terming it as a joint venture.

The Department of Industrial Policy and Promotion (DIPP) - which is under the Commerce and Industry Ministry - is the nodal agency on FDI policy. The government in 2010 had decided to come out with consolidated FDI policy paper summarising all the regulations including those of Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) for the benefit of foreign investors. It revises the policy every six months.

The department had last released the consolidated FDI policy on September 30, 2011 in which the conditions for FDI with respect to construction of old-age homes and educational institutions were eased. The latest policy was originally scheduled to be unveiled on March 30, was held up as the then DIPP secretary P K Chaudhery was appointed as Haryana Chief Secretary and the new incumbent is yet to take charge.

India has been attracting increased FDI in to the country. For April-January 2011-12, FDI went up by 53% to $26.19 billion from $17 billion in the corresponding period last year.

The S&P CNX Nifty opened at 5,254.10; about 20 points higher compared to its previous closing of 5,234.40, and has touched a high and a low of 5,255.80 and 5,218.30 respectively.

The index is currently trading at 5,229.75, down by 4.65 points or 0.09%. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Hindalco up by 0.95%, Wipro up by 0.85%, Tata Motors up by 0.60%, Tata Power up by 0.55% and Ambuja Cement up by 0.53%.

GAIL down by 4.64%, BPCL down by 2.48%, Ranbaxy down by 1.79%, Coal India by 1.52% and RPower was down by 1.44%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Jakarta Composite was up 3.16 points or 0.08% to 4,157.23, KLSE Composite was up 4.85 points or 0.30% to 1,596.13, Nikkei 225 was up 22.46 points or 0.24% to 9,568.72, Straits Times was up 7.88 points or 0.27% to 2,967.98, Seoul Composite was up 0.82 points or 0.04% to 1,997.90 and Taiwan Weighted was up by 28.47 points or 0.37% to 7,629.34.

On the flip side, Shanghai Composite was down 22.00 points or 0.96% to 2,263.78 and Hang Seng was down by 227.89 points or 1.11% to 20,365.11.