Indian equity benchmarks slip into negative territory

Erasing all of their gains, Indian equity benchmarks once again slipped into negative territory in late afternoon session, on account of sustained selling by foreign portfolio investors amid weakness in global markets. Though, the broader indices remained firm on account of some low level buying in selected mid cap and small cap stocks, sentiments remained dampened after US Federal Reserve Chair Janet Yellen signaled an interest rate hike was imminent. Meanwhile, losses in the Indian rupee too weighed on the sentiments. Rupee crossed the 68 mark against the US dollar after the American currency jumped to almost 13-year high against a basket of major currencies. On global front, European stocks were trading in red on Friday, although rising U.S. yields may boost demand for banking stocks.

The BSE Sensex is currently trading at 26152.72, down by 74.90 points or 0.29% after trading in a range of 26117.82 and 26349.02. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.48%, while Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.27%, Power up by 1.02%, PSU up by 0.79%, Realty up by 0.72%, Auto up by 0.55%, while Metal down by 1.51%, Consumer Durables down by 1.41%, FMCG down by 1.06%, Bankex down by 0.53%, TECK down by 0.50% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.73%, Sun Pharma up by 2.36%, Hero MotoCorp up by 1.59%, Mahindra & Mahindra up by 1.50% and Bharti Airtel up by 1.27%. On the flip side, Tata Steel down by 2.52%, ITC down by 2.15%, HDFC Bank down by 1.20%, Adani Ports &Special down by 1.19% and GAIL India down by 1.14% were the top losers.

Meanwhile, in larger move to attract more overseas investments, Reserve Bank of India (RBI) has expand the list of eligible debt instruments for foreign portfolio investors (FPIs) to put their money in unlisted corporate debt securities as well as securitised debt instruments. FPIs can invest in any kind of debt instrument; provided the residual maturity of the paper is three years and the proceeds are not used in real estate.

As per the RBI circular, FPIs can invest in unlisted corporate debt securities in the form of non-convertible debentures/bonds having a minimum residual maturity of three years. However, investments in securitised debt instruments would not require having minimum three-year residual maturity. The apex bank added that FPIs would collectively be able to invest a maximum of Rs 35,000 crore in these instruments and that this Rs 35,000-crore limit would be a part of the overall limit that FPIs have to adhere to for investment in domestic corporate bonds.

The step was first announced in the Union Budget 2016-17. Investment by FPIs in the unlisted corporate debt securities and securitised debt instruments shall not exceed Rs 35,000 crore within the extant investment limits prescribed for corporate bond from time to time, which currently is Rs 2,44,323 crore and FPIs have utilised around 71 per cent of that limit, which amounts to slightly over Rs 1.68 lakh crore.

The CNX Nifty is currently trading at 8069.20, down by 10.75 points or 0.13% after trading in a range of 8048.30 and 8128.95. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were NTPC up by 4.02%, Eicher Motors up by 3.39%, Sun Pharma up by 2.69%, Hero MotoCorp up by 1.73% and Ambuja Cement up by 1.62%. On the flip side, Tata Steel down by 2.46%, Hindalco down by 2.29%, Bharti Infratel down by 2.05%, Zee Entertainment down by 1.94% and ITC down by 1.86% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite dropped 43.12 points or 0.83% to 5,149.90, Shanghai Composite dipped 15.6 points or 0.49% to 3,192.86, KOSPI Index decreased 5.97 points or 0.3% to 1,974.58 and FTSE Bursa Malaysia KLCI was down by 2.66 points or 0.16% to 1,624.11. On other hand, Taiwan Weighted gained 13.53 points or 0.15% to 9,008.79, Hang Seng increased 81.33 points or 0.37% to 22,344.21 and Nikkei 225 was up by 104.78 points or 0.59% to 17,967.41.

All the European Markets were trading in red; UK’s FTSE 100 dropped 43.36 points or 0.64% to 6,751.35, France’s CAC decreased 15.04 points or 0.33% to 4,512.73, Germany’s DAX was down by 0.86 points or 0.01% to 10,684.68.