Indian bourses start trading marginally in red in noon deals

Indian equities erased early gains and started trading marginally in red in afternoon session on account of selling in frontline blue chip counters. Sentiments turned cautious on the back of lower Asian markets ahead of the US Federal Reserve meeting due later today on clues over next policy tightening. Further, losses in the Capital Goods, Industrials, Healthcare and FMCG stocks too dampened the mood. However, downside remained capped with commerce and industry minister Nirmala Sitharaman’s statement that Foreign Direct Investment (FDI) inflows into the country increased 23 percent in the first two months of the current fiscal from a year ago. In scrip specific development, Aurionpro Solutions rose over 12 percent with its subsidiary Cyberinc signing a global OEM partnership agreement with Hewlett Packard Enterprise (HPE) for powering Isla, its advanced web malware isolation system.

On the global front, Asian markets were trading mostly in red, as the dollar recovered mildly from a 13-month low, while investors refrained from taking big bets ahead of the Federal Reserve's two-day policy meeting starting later in the global day. Back home, the BSE Sensex is currently trading at 32215.73, down by 30.14 points or 0.09% after trading in a range of 32198.61 and 32374.30. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.36%, while Small cap index was down by 0.04%.

The top gaining sectoral indices on the BSE were Telecom up by 1.21%, Metal up by 0.63%, Realty up by 0.41%, Basic Materials up by 0.35% and Bankex up by 0.33%, while Capital Goods down by 0.75%, Industrials down by 0.59%, Healthcare down by 0.39%, FMCG down by 0.33% and Energy down by 0.29% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.26%, Axis Bank up by 0.97%, TCS up by 0.92%, HDFC Bank up by 0.66% and Tata Steel up by 0.65%. On the flip side, Tata Motors - DVR down by 1.57%, Tata Motors down by 1.49%, Lupin down by 1.45%, Larsen & Toubro down by 0.84% and Coal India down by 0.80% were the top losers.

Meanwhile, the capital markets regulator the Securities and Exchange Board of India (SEBI) has notified rules to levy fee of $1,000 for each participatory notes (P-Notes) issued by foreign investors and bar issuance of such derivative-based instruments for speculative purposes to check any misuse of these products for channelising black money. The new measures, which follow a slew of other steps taken by the regulator in the recent past, come at a time when the investments in domestic capital markets via P-notes or offshore derivative instruments (ODIs) have surprisingly surged to a seven-month high of Rs 1.81 lakh crore at the end of May.

While such investments used to account for more than half of overall foreign portfolio investments (FPI) at one point, their share has now dropped to just a little over 6 percent. Still, worries remain that P-Notes are misused by some to channelise black money from abroad into the country through the stock markets. The regulator will levy a regulatory fee of $1,000 on each ODI subscriber, to be collected and deposited by the issuing foreign portfolio investor (FPI) once every three years, starting from April 1, 2017.

The markets regulator has amended SEBI (FPI) Regulations, 2014, to implement the decision. P-Notes are issued by registered FPIs to overseas investors who wish to be part of the Indian stock markets without registering themselves directly. They, however, need to go through a proper due diligence process. Earlier, the board of SEBI has decided to prohibit ODIs from being issued against derivatives, except those which are used for hedging purposes.

The CNX Nifty is currently trading at 9955.30, down by 11.10 points or 0.11% after trading in a range of 9950.45 and 10011.30. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 2.51%, Vedanta up by 2.25%, Bharti Infratel up by 2.24%, Hero MotoCorp up by 1.24% and TCS up by 1.03%. On the flip side, HCL Tech. down by 2.26%, Zee Entertainment down by 2.13%, Eicher Motors down by 1.64%, Tata Motors down by 1.58% and Tech Mahindra down by 1.50% were the top losers.

The Asian markets were trading mostly in red; Hang Seng shed 34.1 points or 0.13% to 26,812.73, Nikkei 225 decreased 20.47 points or 0.1% to 19,955.20, KOSPI Index dipped 11.63 points or 0.47% to 2,439.90, Jakarta Composite was down by 10.53 points or 0.18% to 5,791.06 and Shanghai Composite declined 9.93 points or 0.31% to 3,240.67.

On the flip side, FTSE Bursa Malaysia KLCI increased 0.3 points or 0.02% to 1,762.29 and Taiwan Weighted was up by 1.87 points or 0.02% to 10,463.15.