Benchmarks manage to keep head above water in early deals

After making a negative start, Indian equity benchmarks managed to gain some momentum and entered into green terrain in early deals, as traders opted to buy beaten down but fundamentally strong stocks after two days of continues drubbing. Sentiments got some support from report that foreign institutional investors were net buyers in equities worth Rs 413 crore on Wednesday, as per provisional stock exchange data. However, disappointing first quarter numbers from Bank of Baroda dampened sentiments. The bank has reported 59.74% fall in its net profit at Rs 423.62 crore for the quarter ended June 30, 2016 as compared to Rs 1052.15 crore for the same quarter in the previous year.

On the global front, Asian shares were trading mixed at this point of time, tracking overnight losses on Wall Street while global crude oil prices slipped on the back of higher US crude inventories. US stocks ended lower on Wednesday weighed down by energy shares after oil prices slipped after data showed increase in US government crude oil inventories.

Back home, the textile stocks were trading in green in early deals, as the Lok Sabha passed the Taxation Laws (Amendment) Bill, 2016, relaxing the rules for the textile sector to avail itself of the income tax benefit on additional employment created. On the flip side, the telecom stocks remained under pressure, as the Department of Telecom has 'suspended' spectrum sharing, trading and liberalisation activities till the provisional results of the upcoming spectrum auction are declared.

The BSE Sensex is currently trading at 27793.24, up by 18.36 points or 0.07% after trading in a range of 27697.33 and 27828.42. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.11%, while Small cap index up by 0.15%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.04%, FMCG up by 0.87%, IT up by 0.70%, TECK up by 0.52% and Realty up by 0.28%, while Healthcare down by 0.67%, Capital Goods down by 0.41%, Bankex down by 0.41%, Metal down by 0.34% and Auto down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.26%, Lupin up by 1.22%, Reliance Industries up by 1.09%, Hero MotoCorp up by 0.99% and Bajaj Auto up by 0.88%. On the flip side, Sun Pharma down by 2.87%, SBI down by 1.25%, Tata Motors down by 0.94%, Larsen & Toubro down by 0.85% and GAIL India down by 0.71% were the top losers.

Meanwhile, the government has decided to set up a committee to look into all issues including foreign direct investment (FDI) norms pertaining to the fast growing e-commerce industry in the country, the committee would also suggest ways to further promote the growth of the sector. The committee will look into problems like taxation, facing by some of the e-commerce firms. There are also issues related to ecommerce players selling pharmaceuticals.

The committee will be headed by the NITI Aayog CEO; other members in the panel include officials from commerce and industry ministry and department of electronics and IT. Representatives from four states including Maharashtra and Karnataka are also members of the panel. Setting up of this panel also assumes significance as the government has recently permitted 100 per cent FDI in food processing sector. The Department of Industrial Policy and Promotion (DIPP) has allowed 100% FDI through automatic route in the marketplace format of e-commerce retailing in March.

According to new FDI rules introduced in March this year, DIPP had classified the marketplace model as a B2B activity in which 100 per cent FDI was allowed. But this also meant that a marketplace could not directly or indirectly influence the sales price of goods or services or offer discounts and no vendor should account for more than a fourth of total sales.

The CNX Nifty is currently trading at 8580.45, up by 5.15 points or 0.06% after trading in a range of 8547.45 and 8586.55. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.62%, ACC up by 1.37%, ITC up by 1.34%, Lupin up by 1.17% and Ultratech Cement up by 1.14%. On the flip side, Bank of Baroda down by 7.79%, Sun Pharma down by 2.95%, Zee Entertainment down by 1.55%, Hindalco down by 1.44% and Tata Motors - DVR down by 1.44% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI rose 2.04 points or 0.12% to 1,675.07, Shanghai Composite gained 2.69 points or 0.09% to 3,021.44, Jakarta Composite increased 26.19 points or 0.48% to 5,450.14 and Hang Seng was up by 43.08 points or 0.19% to 22,535.51. On the flip side, Taiwan Weighted decreased 96.39 points or 1.05% to 9,104.03, Nikkei 225 slipped 29.85 points or 0.18% to 16,735.12 and KOSPI Index was down by 3.99 points or 0.2% to 2,040.65.