Trade remains range bound; metals drag

Late morning session of trade continue to remain range bound for the markets, lacking any supportive cues. The trade that started on a flat note is turning soft with the passing of the day and the major indices are down by about half a percent. The further weakness in rupee, too is weighing down the sentiments. The long awaited rate cut from the European Central Bank, despite being fulfilled has been unable to spur the upmove, as market across the globe seems worried about growth in major parts of the world. Back home, the broader indices too have lost the traction and were trading down by half a percent in tandem with their larger peers. On sectoral front, the metal index was the laggard tailing its global peers on demand concern, while the rate sensitive realty is the other major loser followed by IT and technology stocks. On the other hand the defensive FMCG sector is again bucking the trend, remaining the only gaining sectoral gauge on BSE.

The market breadth on BSE was negative in the ratio of 1115:1285 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 17,460.73 down by 77.94 points or 0.44% after trading as high as 17,546.04 and as low as 17,425.47. There were 8 stocks advancing against 22 declines on the index.

The broader indices were trading on negative note; the BSE Mid cap index was down by 0.46% while Small cap index lost 0.31%.

On the BSE sectoral space, FMCG up 0.66% were only the  gainers, while Realty down 1.44%, Metal down 1.43%, IT down 1.28 %, TECk down 1.14%  and CG down 0.95% were the  top laggards in the space.

Hindustan Unilever up 1.56%, Cipla up 1.09%, Tata Motors up 0.88%, Mahindra & Mahindra up 0.87% and ITC up 0.74% were the major gainers on the Sensex, while Jindal Steel down 2.99%, Wipro down 1.78%, Sterlite Industries down 1.73%, Hindalco Industries down 1.60% and Gail India down 1.54% were the major losers in the index.

Meanwhile, Indian capital market regulator Securities and Exchange Board of India (SEBI) has expressed its disagreement to finance ministry in bringing back entry load, the commissions paid by the asset management companies to distributors, on grounds that the investors would not be benefited.

Earlier, the commissions to distributors and marketing expenses were met by the fund house by charging an entry load of 2.25% from investors. In 2009, SEBI banned the entry load, which dried up inflows into mutual funds. As a result, in the past two-three years commercial interest of distributors has come down, and they are not motivated to sell mutual funds. And the AMCs asset under management (AUM), the money which is entrusted by investors to fund managers, is reported to have been remaining stagnant for about two years.

As an attempt to boost sagging asset management industry, the finance ministry had asked SEBI to consider bringing back of entry loads, but the suggestion was obstructed by the market regulator stating that it is an unfriendly move to the investors. In November 2009, the MF industry had AUM of Rs 8.21 trillion compared to Rs 6.92 trillion at the end of June 2012.

SEBI has asked the government to modify a scheme introduced in the 2012 budget, which offers tax breaks to investors buying stocks for the first time, so that the investments could be routed through equity mutual funds.

The S&P CNX Nifty is currently trading at 5,297.20, down by 30.10 points or 0.57% after trading as high as 5,326.95 and as low as 5,287.75. There were 11 stocks advancing against 39 declines on the index.

The top gainers on the Nifty were Hindunilvr up 1.35%, Cipla up 1.26%, M&M up 1.14%, BPCL up 0.91% and Grasim up 0.60%.

Jindal Steel down 3.33%, DLF down 2.16%, Sesa Goa down 2.03%, Hindalco down 1.99% and IDFC down 1.89% were the major losers on the index.

In the Asian space, Jakarta Composite down 0.30%, Nikkei 225 down 0.65%, Straits Times Index down  0.20%, KOSPI Composite Index down 0.92% , and Taiwan Weighted down  0.26%.

On the other hand, Shanghai Composite was marginally up by 0.29%, KLSE Composite up 0.01% and Hang Seng up 0.11%.