Benchmarks manage to trade above water in early deals

Indian equity benchmarks have pared most of their initial losses but managed to keep their head above water in early deals on Tuesday. Traders took some encouragement with NITI Aayog member Ramesh Chand’s statement that despite the impact of demonetisation, growth in agriculture for the current year will still be above 5 per cent, though he pointed that the prevailing cash crunch has hit the growers of perishables more compared to those who grow bulk crops such as paddy and cotton. However, gains remained capped on report that foreign investors sold equities worth Rs 535.77 crore, while domestic investors bought equities worth Rs 556.36 crore.

Global cues too remained weak with most of the Asian counters trading mostly in red, as geopolitical concerns intensified after the assassination of Russia’s ambassador to Turkey and violent incidents in Germany and Switzerland. Though, the Japanese market was marginally in green with weakness in yen against dollar. The US markets managed a positive close but were well off the day’s high, with some traders away from their desks ahead of the upcoming holidays.

Back home, the market breadth indicating the overall health of the market was strong, with 992 shares gaining and 764 shares declining, while a total of 96 shares were unchanged. In scrip specific developments, 8K Miles Software Services rallied after the company’s board approved the proposal to acquire Cornerstone, a leading healthcare information technology services Company. However, TV Today Network hits 52-week low after the company said it would not sell its three radio FM stations to Entertainment Network India Ltd (ENIL) and would reorganise the radio business.

The BSE Sensex is currently trading at 26403.39, up by 28.69 points or 0.11% after trading in a range of 26361.39 and 26435.56. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index slipped 0.19%, while Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were Realty up by 0.94%, Consumer Durables up by 0.80%, Capital Goods up by 0.64%, IT up by 0.49% and FMCG was up by 0.47%, while Metal down by 0.63%, Auto down by 0.22%, Bankex down by 0.19% and Oil & Gas was down by 0.13% were the few losing indices on the BSE.

The top gainers on the Sensex were Coal India up by 1.46%, GAIL India up by 1.46%, ITC up by 1.19%, Larsen & Toubro up by 0.97% and NTPC up by 0.87%. On the flip side, Bajaj Auto down by 1.94%, Bharti Airtel down by 0.97%, Adani Ports &Special down by 0.81%, Hero MotoCorp down by 0.81% and Power Grid down by 0.79% were the top losers.

Meanwhile, just few days ahead of the demonetisation deadline, the Reserve Bank of India (RBI) has imposed restrictions on depositing banned Rs 500 and 1000 currency notes for amount exceeding Rs 5000, mandating that it can be deposited only once per account till December 30, 2016 that too after explaining to bank officials the reasons for not having done that so far. Meanwhile, Finance Ministry said that there will be no limit on quantity or value of specified bank notes tendered for payment and deposit under Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana (PMGKY), 2016.

Following the demonetisation of Rs 500 and 1000 notes on November 8, government had allowed people to use such notes for certain public utility bill payment as well as for payment to government hospitals and asked them to deposit the amount in bank accounts. The central bank said that now-defunct notes in excess of Rs 5000 shall be credited to only ‘know your customer’ (KYC) compliant accounts and if the accounts are not KYC compliant credits may be restricted up to Rs 50,000 subject to the conditions governing the conduct of such accounts. According to the circular, “Tenders of specified bank notes (SBN) in excess of Rs 5,000 into a bank account will be received for credit only once during the remaining period till December 30, 2016”.

RBI further said that the guideline does not apply to deposits below Rs 5000, but multiple deposits, if account for an amount over Rs 5000, will also come under the scanner. It also said that the equivalent value of specified bank notes tendered may be credited to a third party account, provided specific authorisation therefore accorded by the third party is presented to the bank, following standard banking procedure and on production of valid proof of identity of the person actually tendering. Under the PMGKY scheme, black money holders can deposit unaccounted cash in account which will be subject to 50 percent tax and 4-year interest free lock-in for the remaining 25 percent of the amount.

The CNX Nifty is currently trading at 8112.90, up by 8.55 points or 0.11% after trading in a range of 8098.20 and 8124.10. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 1.62%, Coal India up by 1.53%, GAIL India up by 1.29%, ITC up by 1.19% and Bharti Infratel up by 1.07%. On the flip side, Bosch down by 2.21%, Idea Cellular down by 1.77%, Bajaj Auto down by 1.74%, Aurobindo Pharma down by 1.71% and Hindalco down by 1.45% were the top losers.

Asian markets were trading mostly in red; Hang Seng dropped 63.52 points or 0.29% to 21,769.16, Taiwan Weighted decreased 20.65 points or 0.22% to 9,218.67, Shanghai Composite declined 16.06 points or 0.52% to 3,102.02, Jakarta Composite shed 7.12 points or 0.14% to 5,184.79 and FTSE Bursa Malaysia KLCI was down by 0.45 points or 0.03% to 1,633.85.

On the flip side, KOSPI Index increased 5.47 points or 0.27% to 2,043.86 and Nikkei 225 was up by 41.16 points or 0.21% to 19,432.76.