Benchmarks trade slightly in green in morning trade

Indian equity benchmarks have made a cautious start but are managing to keep their head above water in early deals on Monday. Traders took some encouragement with Prime Minister Narendra Modi’s statement that the Goods and Services Tax law will boost domestic demand, create more opportunities for domestic business and drive job creation. He said that India is the fastest growing major economy and one of the most attractive destinations for FDI. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 272.91 crore on Friday as per provisional data released by the stock exchanges. Depreciation in Indian rupee too capped gains. Extending its downtrend for the third continuous day, Rupee fell 3 paise to 66.92 on sustained demand for the US dollar from importers and banks.

On the global front, Asian markets were trading in green at this point of time, though the gains remained capped, as investors weighed prospects for a US interest-rate increase and as a report showed China’s capital outflows are picking up. Back home, buying in banking counter aided some sentiments, as the Finance Ministry has called a meeting with senior managers of banks to discuss the bad loans problem existing in specific sectors. The agenda of meeting will be focussed on non-performing assets (NPAs) in sectors like steel, power and infrastructure, so these sectors too will be in action.

The BSE Sensex is currently trading at 28111.65, up by 34.47 points or 0.12% after trading in a range of 28075.95 and 28192.20. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.10%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were PSU up by 0.70%, Oil & Gas up by 0.61%, Bankex up by 0.60%, Power up by 0.55% and Energy was up by 0.49%, while IT down by 0.66%, TECK down by 0.62%, Capital Goods down by 0.32%, Healthcare down by 0.06% and Telecom was down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.45%, Adani Ports &Special up by 2.29%, SBI up by 1.59%, GAIL India up by 1.17% and Maruti Suzuki up by 0.96%. On the flip side, Wipro down by 3.67%, Asian Paints down by 1.78%, Bharti Airtel down by 1.36%, Larsen & Toubro down by 0.74% and TCS down by 0.59% were the top losers.

Meanwhile, the Reserve Bank of India, opening the gates for more foreign investments in the country has allowed foreign direct investment (FDI) up to 100% under automatic route in ‘Other Financial Services’ carried out by NBFCs. The apex bank also simplified rules for easier entry of venture capital funds to startup ventures and also eased external commercial borrowing regulations.

RBI in its notification said that in financial services activities which are not regulated or partly regulated or where there is lack of clarity regarding regulatory oversight, foreign investment will be allowed up to 100% under the government approval route. However, it did not specify the sectors which have been opened up for automatic route. The present regulations on Non-Banking Finance Companies (NBFCs) stipulate that FDI would be allowed on automatic route for only 18 specified NBFC activities after fulfilling prescribed minimum capitalization norms mentioned therein.

The other salient features of the revised regulatory framework are, in financial services activities which are not regulated or partly regulated by any financial sector regulator or where there is lack of clarity regarding regulatory oversight, foreign investment will be allowed up to 100% under the Government approval route. Further, downstream investment by any entity engaged in other financial services will be subject to extant sectoral regulations and provisions of Principal Regulations. Other Financial Services will include activities which are regulated by any financial sector regulator viz. Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Pension Fund Regulatory and Development Authority, National Housing Bank or any other financial sector regulator as may be notified by the Government of India in this regard. Such foreign investment shall be subject to conditionality’s, including minimum capitalization norms, as specified by the concerned Regulator/ Government Agency.

In order to attract foreign investment in startups, the central bank has also said foreign venture capital investors registered with Sebi will not henceforth require any approval from RBI for investment in sectors such as biotechnology, IT, seed research and development, dairy and poultry, and production of bio-fuels.

The CNX Nifty is currently trading at 8697.70, up by 4.65 points or 0.05% after trading in a range of 8684.15 and 8723.05. There were 27 stocks advancing against 23 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Bharti Infratel up by 2.71%, ICICI Bank up by 2.54%, Adani Ports &Special up by 2.43%, SBI up by 1.57% and Bank of Baroda up by 1.54%. On the flip side, Wipro down by 3.73%, HCL Tech down by 2.09%, Asian Paints down by 1.96%, Idea Cellular down by 1.69% and Bharti Airtel down by 1.50% were the top losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI gained 4.1 points or 0.25% to 1,674.08, KOSPI Index increased 7.94 points or 0.39% to 2,040.94, Jakarta Composite jumped 18.14 points or 0.34% to 5,427.39, Taiwan Weighted rose 18.58 points or 0.2% to 9,325.15, Shanghai Composite surged 39.76 points or 1.29% to 3,130.70, Nikkei 225 added 52.72 points or 0.31% to 17,237.31 and Hang Seng was up by 72.52 points or 0.31% to 23,446.92.