Benchmarks continue to trade in red in noon session

After trading on subdued note for most part of the morning trade, Indian benchmark indices have slipped deeper into red in noon session, as market participants remained on the sidelines and refrained from any buying activity ahead of outcome of monetary policy committee meeting due tomorrow. RBI, in its sixth bi-monthly policy statement for the year, may have to delay the repo rate cut until a better picture emerges out of the remonetisation exercise. Sentiments remained downbeat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 403.52 crore on February 6, 2017. Besides, weak trend in Asian markets coupled with depreciation in rupee value also weighed on the sentiment. Indian rupee slipped 16 paise to 67.38 against the US currency on Tuesday following continued bouts of dollar demand from banks and importers. However, investors got some comfort with commerce and Industry Minister Nirmala Sitharaman’s statement that disbanding FIPB (Foreign Investment Promotion Board) will further improve ease of doing business and the respective regulators of the ministries concerned are ‘sufficient’ to take care of investment proposals. The decision, the minister said, is in line with the government's policy for 'maximum governance and minimum government'.  Meanwhile, Fertiliser stocks gained traction on the report that the Finance Ministry granted Rs 10000 crore to Fertiliser Ministry under special banking arrangement to provide loan to cash-starved fertiliser companies at reasonable rates.

On the global front, Asian markets were trading mostly lower on Tuesday as political and economic uncertainty sent investors sheltering in the Japanese yen and gold, while expectations China's foreign exchange reserves had fallen for a seventh month added to nervousness. Overnight, Wall Street declined, led by the energy sector as oil prices fell, with investors still waiting for details of President Donald Trump's economic policies.

Back home, stocks from Consumer Durables, PSU and Oil & Gas counters were supporting the markets, while those from Auto, Banking and Teck counters were adding to the underlying cautious undertone. In scrip specific development, Oudh Sugar Mills surged after the company reported more than two-fold jump in net profit at Rs 34.73 crore for the quarter ended December 2016, on back of strong operational performance. On the other hand, Lakshmi Machine Works declined after the company reported 21.63% fall in its net profit at Rs 51.26 crore for third quarter ended December 31, 2016, as compared to Rs 65.41 crore for the same quarter in the previous year.

The market breadth remained optimistic, as there were 1265 shares on the gaining side against 1199 shares on the losing side, while 123 shares remained unchanged.

The BSE Sensex is currently trading at 28361.96, down by 77.32 points or 0.27% after trading in a range of 28341.05 and 28483.41. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.08%, while Small cap index up by 0.28%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.42%, PSU up by 0.35%, Oil & Gas up by 0.28%, FMCG up by 0.23% and Power up by 0.16%, while Auto down by 0.94%, Bankex down by 0.16%, TECK down by 0.14%, IT down by 0.09% and Metal down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 0.87%, Asian Paints up by 0.72%, Tata Steel up by 0.38%, TCS up by 0.31% and NTPC up by 0.20%. On the flip side, Tata Motors down by 2.11%, Mahindra & Mahindra down by 1.23%, Adani Ports &Special down by 0.99%, Bajaj Auto down by 0.96% and Wipro down by 0.87% were the top losers.

Meanwhile,  after the Finance Minister in his Budget speech announced to abolish Foreign Investment Promotion Board (FIPB) and come up with a new mechanism that could include approvals by the ministries concerned for expeditious clearance of foreign investment proposals, Commerce and Industry Minister Nirmala Sitharaman has said that the idea of winding up FIPB will further improve ease of doing business.

She pointed that an additional layer in the form of FIPB is not any longer required since majority of the investments (around 92 percent) coming in are through the automatic route. For the rest of the FDI, that every department concerned (the sectors under approval route) has a framework or a regulator for it and if there is a regulator for that department concerned that is sufficient to take care of the screening and approval of investment proposals. She added that the decision to abolish FIPB is in line with the government's policy for ‘maximum governance and minimum government’.

Earlier, Economic Affairs Secretary Shaktikanta Das, who heads the FIPB, had said that government is planning to bring a new mechanism in another two months to replace the body. At present, FIPB offers single-window clearance for applications on FDI in India that are under the approval route and the sectors which are under the automatic route do not require any prior approval and are subject to only sectoral laws.

The CNX Nifty is currently trading at 8774.70, down by 26.35 points or 0.30% after trading in a range of 8770.10 and 8809.30. There were 14 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.60%, Bharti Infratel up by 1.44%, BPCL up by 1.35%, Kotak Mahindra Bank up by 0.99% and ITC up by 0.69%. On the flip side, Tata Motors - DVR down by 2.59%, Tata Motors down by 2.24%, Bosch down by 1.68%, ACC down by 1.56% and Zee Entertainment Enterprises down by 1.50% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 0.23%, Hang Seng dipped 0.14%, Shanghai Composite dropped 0.38%, Jakarta Composite slipped 0.17%, FTSE Bursa Malaysia KLCI shed 0.16% and KOSPI Index was down by 0.21%. On the flip side, Taiwan Weighted was up by 0.17%.