Weak global cues drag benchmarks lower in early deals

Pressurized by weak global cues, Indian equity benchmarks are trading slightly in red in early deals on Friday. Sentiments also remained dampened on report that the foreign portfolio investors (FPIs) sold shares worth a net Rs 614.40 crore on December 22. However, losses remained capped with thaw appearing on the GST issue, and the prospects of early roll out of goods and services tax (GST) brightening with the states and the Centre making progress on a crucial legislation, amid indications that the states may get concessions to tide over possible demonetisation-related revenue loss.

On the global front, Asian markets were trading mostly lower at this point of time, following the overnight decline in the US markets, flurry of positive data about the American economy bolstered rate hike case. The US markets extended their weakness for the second straight day and ended modestly lower in last session with trading activity remaining relatively light ahead of the holiday weekend.

Back home, the market breadth indicating the overall health of the market was weak, with 722 shares gaining and 1,012 shares declining, while a total of 90 shares were unchanged. On the sectoral front, auto stocks remained under pressure on reports that the Centre is looking at introducing a law where one may not be allowed to register new car or any other vehicle unless he produce proof that he has adequate parking space for it.

The BSE Sensex is currently trading at 25900.44, down by 79.16 points or 0.30% after trading in a range of 25872.38 and 26007.16. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index shed 0.53%, while Small cap index was down by 0.32%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.30%, Energy up by 0.19% and Oil & Gas up by 0.13%, while Metal down by 0.99%, FMCG down by 0.88%, Power down by 0.84%, Auto down by 0.65% and TECK down by 0.50% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.21%, ONGC up by 0.64%, Bajaj Auto up by 0.50%, Reliance Industries up by 0.37% and HDFC up by 0.30%. On the flip side, Mahindra & Mahindra down by 1.57%, GAIL India down by 1.29%, ITC down by 1.28%, Axis Bank down by 1.18% and Tata Motors down by 0.97% were the top losers.

Meanwhile, the share of foreign portfolio investments (FPI) through participatory notes (P-notes) slipped to its lowest level in nearly three years to Rs 1.79 lakh crore in end-November. According to Securities and Exchange Board of India (SEBI) data, P-Notes investments have fallen to a 33-months low, the total value of P-Notes investment in Indian markets equity, debt and derivatives has plunged to Rs 1,79,648 crore in November-end, from Rs 1,99,987 crore at the end of October. This was the lowest level since February 2014 when the cumulative value of such investments stood at Rs 1,72,738 crore.

Of the total, P-Note holdings in equities were at Rs 1.25 lakh crore in October-end and the remaining holdings were in debt and derivatives markets. The quantum of FPI investments via P-Notes decreased to 7.5 percent in November, from 7.8 percent in the preceding month. The share of P-Notes has been falling over the years as SEBI tightened disclosure norms and other related regulations. It used to be much higher at 25-40 percent in 2008, while the reading was as high as 55 percent at the peak of the stock market bull run in 2007.

In June, P-Notes investments plunged to Rs 2.10 lakh crore, which was the lowest in nearly two years, owing to a tight vigil on funds coming through the route. Though, at the end of September, August and July it was Rs 2, 12,509 crore, Rs 2,16,232 crore and Rs 2,12,179 crore respectively. P-Notes are typical instruments issued by registered FPIs to overseas investors who wish to participate in Indian markets without registering themselves directly in the country to save time. But they still need to go through a proper due diligence process.

The CNX Nifty is currently trading at 7943.90, down by 35.20 points or 0.44% after trading in a range of 7942.05 and 7985.45. There were 10 stocks advancing against 40 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Sun Pharma up by 1.29%, ONGC up by 0.72%, Bajaj Auto up by 0.51%, Reliance Industries up by 0.48% and Bosch up by 0.40%. On the flip side, Zee Entertainment down by 1.86%, Ultratech Cement down by 1.84%, Eicher Motors down by 1.67%, GAIL India down by 1.66% and Mahindra & Mahindra down by 1.55% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 114.45 points or 0.53% to 21,521.75, Taiwan Weighted slipped 30.39 points or 0.33% to 9,088.36, Shanghai Composite shed 19.11 points or 0.61% to 3,120.45, FTSE Bursa Malaysia KLCI dipped 3.7 points or 0.23% to 1,619.50 and KOSPI Index was down by 0.83 points or 0.04% to 2,035.20. On the flip side, Jakarta Composite was up by 28.02 points or 0.56% to 5,070.89.