Indian indices trade choppy; Consumer Durables, Auto stocks fall

Indian equity indices were trading choppy in the early noon session amid selling in blue chip stocks from across some sectors. Sentiments weakened as foreign institutional investors (FIIs) sold shares worth a net Rs 1805.07 crore on October 8, 2018. Besides, sentiments were pessimistic with International Monetary Fund (IMF) stating that global growth has plateaued at 3.7 per cent with its chief economist warning the world that there are clouds on the horizon and growth has proven to be less balanced than hoped. Some concerns also came with a private report stating that a delayed festive season and an unfavourable base will keep India Inc’s earnings subdued in the three months to September despite a boost for IT and pharmaceuticals from the weaker rupee.  However, losses were limited after report that the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped Rs 84,647 crore at the end of August.

On the global front, barring Japan and Singapore all the other Asian markets were trading in green. The Japanese market was trading lower following the lackluster cues overnight from Wall Street and on a stronger yen. Back on the domestic front, the market breadth on BSE was negative, out of 2374 stocks traded, 931 stocks advanced, while 1333 stocks declined and 110 stocks remained unchanged on the BSE.

The BSE Sensex is currently trading at 34486.16, up by 11.78 points or 0.03% after trading in a range of 34317.88 and 34711.68. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.48%, while Small cap index was down by 0.52%.

The few gaining sectoral indices on the BSE were Metal up by 0.86%, Capital Goods up by 0.30% and Bankex up by 0.02%, while Consumer Durables down by 1.83%, Auto down by 1.68%, Realty down by 1.16%, Industrials down by 1.15% and Oil & Gas down by 0.95% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.28%, HDFC up by 3.50%, Vedanta up by 3.24%, Adani Ports up by 2.58% and Coal India up by 1.31%. On the flip side, Tata Motors down by 12.83%, Tata Motors - DVR down by 12.04%, Asian Paints down by 2.17%, Bharti Airtel down by 1.71% and Bajaj Auto down by 1.61% were the top losers.

Meanwhile, rising for first time in 10 months, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped Rs 84,647 crore at the end of August. According to Securities and Exchange Board of India (SEBI) data, total value of P-note investments in Indian markets including equity, debt and derivatives, at August end climbed to Rs 84,647 crore from Rs 84,647 crore at the end of July. Prior to this, an increase in investment was seen in October 2017, when the cumulative value of such fund infusion rose to Rs 1,31,006 crore from Rs 1,22,684 crore in September-end.

Of the total, P-note holdings in equities at August-end were at Rs 66,233 crore, while in debts and derivatives were at Rs 14,648 crore and Rs 3,765 crore respectively. Besides, the quantum of FPI investments via P-notes rose to 2.5% during the period under review from 2.4% in the preceding month. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas players who wish to be part of the Indian stock market without registering themselves directly. However, they need to go through due diligence.

Before the rise, P-note investments were on a decline since, June last year and hit an over eight-year low in September. However, these investments rose slightly in October but fell again in November and the trend continued till July this year. In July this year, the investment had touched the lowest level since April 2009 when the cumulative value of such investments stood at Rs 72,314 crore. The decline in investment could be attributed to several measures taken by the market watchdog to stop the misuse of the controversy-ridden participatory notes.

Recently, market regulator SEBI issued revised KYC norms for FPIs, wherein resident as well as non-resident Indians have been permitted to hold non-controlling stake in such entities. These norms have been put in place weeks after a panel suggested various changes to the guidelines proposed earlier, amid concerns in certain quarters that overseas funds might face difficulties in ensuring compliance. Non-resident Indians, overseas citizens of India and resident Indians have been permitted to hold non-controlling stake in FPIs. There would also be no restriction on them to manage the non-investing FPIs SEBI-registered offshore funds as well as registered investment managers.

The CNX Nifty is currently trading at 10341.50, down by 6.55 points or 0.06% after trading in a range of 10292.90 and 10397.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.07%, HDFC up by 3.66%, Vedanta up by 3.24%, Adani Ports up by 2.61% and Zee Entertainment up by 2.34%. On the flip side, Tata Motors down by 12.71%, Grasim Industries down by 3.36%, Eicher Motors down by 3.36%, Titan Co down by 3.33% and HPCL down by 2.43% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 48.20 points or 0.18% to 26,250.77, Shanghai Composite rose 5.59 points or 0.21% to 2,722.10, Taiwan Weighted surged 10.90 points or 0.1% to 10,466.83 and Jakarta Composite was up 6.45 points or 0.11% to 5,767.52.

On the flip side, Straits Times decreased 11.76 points or 0.37% to 3,169.69 and Nikkei 225 was down 314.33 points or 1.34% to 23,469.39.