Weakness persist on the bourses in late afternoon deals

Sensex and Nifty continued their weak trade in the late afternoon deals. Sentiments were under pressure as funds and retail investors hit the sell button tracking a sluggish global trend due to tumbling oil prices. Sentiments remained dampened with the statement of Union Minister Nirmala Sitharaman expressing disappointment at India's rank remaining low in terms of ease of doing business. She said that the efforts and reforms undertaken by the Centre and states have not been adequately captured in the ranking released by the World Bank. Investors remained cautious ahead of October month F&O expiry on Thursday and FMCG majors’ second quarter earnings later today. On the sectoral front, power stocks were trading lower with the private report  stating that Power sector growth during July-September quarter is expected to be muted mainly on account of poor demand from distribution companies (discoms) due to better monsoon and slow pick up in industrial activity. 

On the global front, European markets were trading in red on Wednesday, as oil prices extended losses and investors digested a slew of mixed earnings reports. Regional data painted a mixed picture, with the German GfK forward-looking consumer sentiment index falling to 9.7 from 10.0 in October, while a gauge of French consumer confidence improved as expected in October.

The BSE Sensex is currently trading at 27863.82, down by 227.60 points or 0.81% after trading in a range of 27809.16 and 28050.55. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.21%, while Small cap index was up by 0.11%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.93%, Realty up by 0.29% and Auto up by 0.10%, while Bankex down by 1.37%, IT down by 0.65%, Power down by 0.48%, FMCG down by 0.43% and Oil & Gas down by 0.37% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.91%, Hero MotoCorp up by 1.99%, Maruti Suzuki up by 1.85%, Bajaj Auto up by 1.39% and Hindustan Unilever up by 1.06%. On the flip side, Axis Bank down by 7.83%, ICICI Bank down by 3.29%, Adani Ports &Special down by 2.69%, Tata Motors down by 2.16% and Wipro down by 1.80% were the top losers.

Meanwhile, in order to attract foreign capital into the country, the Department of Industrial Policy & Promotion (DIPP), under the commerce and industry ministry, has notified 100 percent foreign direct investment (FDI) in 'other financial services' carried out by non-banking finance companies (NBFCs).

DIPP has said that the government has liberalized its FDI policy in Other Financial Services and non-banking finance companies (NBFCs). The other financial services will include activities which are regulated by any financial sector regulator - RBI, SEBI, IRDA, Pension Fund Regulatory and Development Authority, National Housing Bank 'or any other financial sector regulator as may be notified by the government in this regard. However, such investment would be subject to conditionalities, including minimum capitalisation norms, as specified by the concerned regulator or government agency.

The two key relaxations sought to be introduced vide this Notification are firstly, opening up of all the sub-sectors falling within the non-banking financial services sector for up to 100% foreign participation and secondly, removing any form of additional capitalization norms linked to foreign ownership prescribed under the FDI Policy, thereby aligning the capitalization norms with those prescribed by the relevant regulators regulating these activities.

However, DIPP has not specified the sectors which have been opened up for automatic route. The present regulations on NBFCs stipulate that FDI would be allowed on automatic route for only 18 specified NBFC activities after fulfilling prescribed minimum capitalization norms mentioned therein. Currently, 100 percent FDI through automatic route is permitted in 18 NBFC activities including merchant banking, under writing, portfolio management services, financial consultancy and stock broking. In 2015-16, foreign direct investment in India grew by 29 percent year-on-year to $ 40 billion.

The CNX Nifty is currently trading at 8632.15, down by 59.15 points or 0.68% after trading in a range of 8617.30 and 8657.30. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 5.25%, Kotak Mahindra Bank up by 4.21%, Bharti Airtel up by 2.77%, Hero MotoCorp up by 2.01% and Maruti Suzuki up by 1.79%. On the flip side, Axis Bank down by 7.91%, ICICI Bank down by 3.32%, Tata Motors - DVR down by 3.32%, Bharti Infratel down by 3.07% and Adani Ports &Special down by 2.78% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 239.68 points or 1.02% to 23,325.43, Taiwan Weighted dropped 23.4 points or 0.25% to 9,362.25, KOSPI Index slumped 23.28 points or 1.14% to 2,013.89, Shanghai Composite fell 15.63 points or 0.5% to 3,116.31 and FTSE Bursa Malaysia KLCI was down by 4.58 points or 0.27% to 1,672.85.On the other hand, Jakarta Composite was up by 2.3 points or 0.04% to 5,400.12 and Nikkei 225 increased 26.59 points or 0.15% to 17,391.84.

European markets were trading in red; Germany’s DAX decreased 69.48 points or 0.65% to 10,687.83, UK’s FTSE 100 dropped 62.44 points or 0.89% to 6,955.20 and France’s CAC decreased 26.64 points or 0.59% to 4,514.20.