Indian equities trim gain; gyrates near neutral line

Indian equities pared gain but continued to trade in green in the late afternoon session hovering near the neutral line as investors indulged in value buying of select beaten down fundamentally strong blue chip stocks on taking clues from European counterparts. The sentiments were subdued on reports that the global economic turmoil continued to take its toll on Indian exports with shipments going down for the fourth consecutive month in June 2012 by 5.45% to $25.06 billion compared to $26.51 billion in June 2011. Traders were seen piling up position in TECk, Bankex and IT sector while selling was witnessed in Consumer Durable, Realty and Metal sector. In the scrip specific development, Infosys was trading in red under pressure for second day in a row on posting disappointing results while TCS was trading firm on reporting 35.64% rise in Q1 net profit. SKS Microfinance was seen trading under pressure with cut of around seven percent after the company stated that it is likely to declare a loss in the quarter ended June 2012. Sesa Goa was trading in red after the company decided to shut down operations at its two plants in Goa on account of scarcity of iron ore as its transportation has been stopped by authorities due to monsoon. Den Networks was seen firm with gain of around more than seven percent after the company reported that overseas investor - TIAA-CREF Investment Management, LLC has bought one percent of the company through open market transaction.

On the global front, the Asian markets were trading in green barring Taiwan Weighted while the European markets were too trading in green on optimistic note. The European industrial production unexpectedly rebounded in May as growth in Germany, Europe’s largest economy, had offset a decline in France. However, Moody's downgrade of Italy's credit rating to near-junk status just ahead of a bond auction, threatens to reinforce fears over Europe's debt crisis. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,200 and 17,200 levels respectively. The market breadth on BSE was positive in the ratio of 1439:1147 while 150 scrips remained unchanged.

The BSE Sensex is currently trading at 17,242.73, up by 10.18 points or 0.06% after trading as high as 17,342.88 and as low as 17,229.68. There were 12 stocks advancing against 18 declines on the index.

The broader indices too trimmed some of the gains; the BSE Mid cap index was up 0.10% while Small cap index was up 0.33%.

The top gainers on the BSE sectoral space were, TECk up by 0.31%, Bankex up by 0.30%, IT up by 0.19% and PSU up by 0.17%, while Consumer Durable down by 1.09%, Realty down by 0.85%, Metal down by 0.75%, Power down by 0.32% and Fast Moving Consumer Goods down by 0.22% were top losers on the index.

TCS up by 1.74%, HDFC Bank up by 1.48%, Hero MotoCorp up by 1.19%, Cipla up by 1.07% and Gail India up by 0.93% were the major gainers on the Sensex, while Jindal Steel down by 2.00%, Sterlite Industries down by 1.38%, Tata Power down by 1.19%, Maruti Suzuki down by 1.04% and Hindalco Industries down by 0.85% were the major losers in the index.

Meanwhile, in a move to give a push to its National Pension System (NPS), the Pension Fund Regulatory and Development Authority (PFRDA) has come up with revised guidelines for registering fund managers to manage its flagship retirement scheme. This will facilitate interested players to sell the scheme if they meet the eligibility criteria.

As per the revised guidelines by pension regulator, there is no limitation on the number of pension fund managers (PFMs) and these fund managers will be able to enroll subscribers from the non-government and private sector only. In addition, pension fund managers (PFMs) will now be allowed to prescribe their own fee charges to manage a National Pension System for the non-government and private sector, as the sector regulator has done away with the bidding process in which a uniform fee was charged for all the players.

The scheme was opened for the private sector about three years ago, but it has not made much progress since then. In an attempt to give it a push the finance ministry had even announced a 'Swawlamban' scheme wherein it would contribute 1,000 for four years to 2013-14 to the NPS account to an unorganised sector worker who brought a maximum of 12,000 of his own funds. 

The PFRDA is expecting that this would provide for an economically viable business model for the PFMs attracting a fresh set of entrants into the pension industry, which has only about 11 lakh NPS Lite subscribers in April this year. NPS Lite is a low cost version of the scheme for the weaker and economically disadvantaged subscribers. The revised structure is based on the suggestions of the Bajpai Committee set up by PFRDA.

Meanwhile, the direct or indirect foreign investment in the Pension Fund should not exceed 26 percent of the paid-up share capital or as may be laid down by the authority from time to time, the interim regulator said in the guidelines issued for registration of funds from the private sector.

The  S&P CNX Nifty is currently trading at 5,236.35, up by 1.10 points or 0.02% after trading as high as 5,267.15 and as low as 5,231.35. There were 23 stocks advancing against 27 declines on the index.

The top gainers on the Nifty were TCS up by 1.83%, HDFC Bank up by 1.48%, Cipla up by 1.04%, IDFC up by 1.02% and Gail India up by 0.98%. Meanwhile, Jindal Steel down by 2.03%, Tata Power down by 1.59%, Sterlite Industries down by 1.24%, Maruti Suzuki down by 1.13% and DLF down by 0.97% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng index gained 0.35%, Nikkei 225 added 0.05%, Seoul Composite Index shot up by 1.54%, Strait Times added 0.77%, Jakarta Composite gained 0.78%, KLSE Composite rose 0.13% and Shanghai Composite inched up by 0.02%. On the flip side, Taiwan Weighted down by 0.37% was the lone loser amongst the Asian pack.

The European markets were trading in green with, France’s CAC 40 added 0.19%, Germany’s DAX ascended 0.49% and the United Kingdom’s FTSE 100 jumped 0.34%.