Key benchmark indices continue to trade in red

Key benchmark indices continued to trade in red in the afternoon session as investors remained jittery about geo-political tension after India went ahead with surgical strike on terror base across LoC on Wednesday night. Sentiment remained dampened with a report from Labour Bureau that unemployment rate in India has shot up to a five-year high of 5 percent in 2015-16, with the figure significantly higher at 8.7 percent for women as compared to 4.3 percent for men. Besides, Weakness in Asian market too weighed on sentiment. However, losses remained capped with the report that Employees’ Provident Fund Organisation (EPFO) has decided to invest 10% of its annual incremental deposits or an estimated Rs 13,000 crore in the current fiscal in equity exchange traded funds (ETFs).  In scrip specific development, Bharti Airtel fell 1.5 percent and Idea Cellular dropped about half a percent, while Reliance Communications jumped over 5 percent ahead of the upcoming spectrum auction.

On the global front, Asian markets were trading mostly in red on Friday as investor sentiment was dented by overnight losses on Wall Street and renewed worries about the health of Deutsche Bank. Back home, the BSE Sensex is currently trading at 27762.59, down by 64.94 points or 0.23% after trading in a range of 27716.78 and 27904.04. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices outperforming the benchmarks were trading in green; the BSE Mid cap index was up by 0.91%, while Small cap index was up by 1.04%.

The top gaining sectoral indices on the BSE were Realty up by 1.83%, Oil & Gas up by 1.05%, Power up by 0.89%, PSU up by 0.76% and IT up by 0.59%, while Capital Goods down by 0.41%, Metal down by 0.31% and FMCG down by 0.25% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.88%, ONGC up by 1.33%, Wipro up by 1.33%, Power Grid Corpn. up by 1.27% and Infosys up by 0.98%. On the flip side, Cipla down by 5.73%, Coal India down by 2.54%, Bharti Airtel down by 1.87%, Larsen & Toubro down by 1.36% and Adani Ports &Special down by 1.23% were the top losers.

Meanwhile, after getting handsome return of 12.10% in the 2015-16 by investing employees Provident Fund savings in equity exchange traded funds (ETFs), the retirement fund body Employees Provident Fund Organisation (EPFO) has decided to double equity investments in ETF in the current fiscal.

Labour minister Bandaru Dattatreya has said that EPFO will invest 10% of its annual incremental deposits or an estimated Rs 13,000 crore in the 2016-17. EPFO has already invested Rs 1,500 crore in ETFs in the first half of the current Fiscal Year and will invest about Rs 11,500 crore in the remaining six months. Minister said that we have already issued a notification raising the EPFO investment limit of ETFs to 10% from the current 5% of its investible deposits keeping the good economic situation, ground conditions and how social security funds invest globally.

EPFO till now was investing 5 % of the incremental deposits in exchange-traded funds and last year invested over Rs 6517 crore of the annual incremental corpus in stocks after the finance ministry persuaded it to do so and the return on EPFO’s equity investments in the last one year has been 12.10%.

The finance ministry had last year notified a new investment pattern for EPFO, allowing the body to invest a minimum of 5 per cent and up to 15 per cent of its funds in equity or equity-related schemes. EPFO has a total corpus of Rs 8 lakh crore and an annual incremental inflow of around Rs 1.3 lakh crore

The CNX Nifty is currently trading at 8580.35, down by 10.90 points or 0.13% after trading in a range of 8555.20 and 8617.65. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.83%, Aurobindo Pharma up by 2.80%, Bank of Baroda up by 2.25%, Grasim Industries up by 2.22% and ONGC up by 1.72%. On the flip side, Cipla down by 6.20%, Coal India down by 2.58%, Bharti Airtel down by 2.03%, Bharti Infratel down by 1.63% and Larsen & Toubro down by 1.53% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 392.68 points or 1.65% to 23,346.79, Nikkei 225 declined 243.87 points or 1.46% to 16,449.84, Taiwan Weighted shed 104.05 points or 1.12% to 9,166.85, KOSPI Index dipped 25.09 points or 1.21% to 2,043.63, FTSE Bursa Malaysia KLCI decreased 6.07 points or 0.36% to 1,663.57 and Jakarta Composite was down by 5.52 points or 0.1% to 5,426.44. On the flip side, Shanghai Composite increased 5.37 points or 0.18% to 3,003.86.