Benchmarks make soft opening ahead of GDP data

Domestic benchmarks have made a soft start breaching their psychological 5,300 (Nifty) and 17,500 (Sensex) levels ahead of Q1FY13 GDP numbers. The GDP numbers will be announced later in the day, the general expectation is that it is likely to witness a slightly lower growth of 5.2 percent against 5.3 percent in the previous quarter, anything coming better than expected may move the markets higher, however a surprise on lower side may derail the momentum as well. Moreover, global cues too dampened the sentiments as the US markets once again slipped into red overnight ahead of the Federal Reserve chief Ben Bernanke’s speech on Friday at a symposium of central bankers. While, most of the Asian counters were trading lower with Japanese Nikkei losing the most as the nation’s industrial output unexpectedly fell in July while manufacturing activity in August contracted to the lowest level in 16 months. Back home, PSU oil marketing companies like BPCL, HPCL and IOC all edged lower on buzz that diesel and LPG prices are not likely to be hiked even after the end of the monsoon session of Parliament. On the sectoral front healthcare remained the lone gainer on the Sensex while, major part of the blow was absorbed by power, auto and software stocks. The broader indices were trading flat and the market breadth on the BSE was positive; there were 800 shares on the gaining side against 741 shares on the losing side while 72 shares remained unchanged.

The BSE Sensex opened at 17,557.62; about 16 points higher compared to its previous closing of 17,541.64, and has touched a low of 17,437.07 while high remained its opening.

The index is currently trading at 17,449.82 down by 91.82 points or 0.52%. There were 5 stocks advancing against 25 declines on the index.

The overall market breadth has made a positive start with 49.60% stocks advancing against 45.94% declines. The broader indices were trading flat; the BSE Mid cap and small cap indices declined 0.01% and 0.09% respectively.

The only gaining sectoral index on the BSE was Healthcare up by 0.10%. While, Power down by 0.93%, Auto down by 0.80%, IT down by 0.75%, CG down by 0.71% and Realty down by 0.64% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 1.03%, Bharti Airtel up by 0.93%, HDFC up by 0.62%, Jindal Steel up by 0.27% and Sterlite Industries up by 0.15%.

On the flip side, NTPC was down by 1.84%, Hindalco was down by 1.74%, BHEL was down by 1.67%, Coal India was down by 1.35% and Bajaj Auto was down by 1.30% were the top losers on the Sensex.

Meanwhile, capital market regulator, Securities and Exchange Board of India (SEBI) has amended the equity listing agreement to give promoters two more routes to dilute their stake to bring public holding to a minimum of 25%, viz. issuance of rights and bonus shares. As per this route, the promoter for dilution of stake will have to forego their entitlement to shares being issued in such rights and bonus issues to public shareholders.

These two additional avenues for sale of shares by promoters to meet minimum public holding norms (25% for private sector companies and 10% for PSU entities) were approved by SEBI's board on August 16. With the introduction of these two routes, the total number of routes available to promoters for diluting their shareholding sum up to five. Apart from these two new routes, companies can comply with minimum public shareholding norms via institutional placement programme (IPP), offer for sale by promoters, issuance of shares through prospectus and sale of shares held by promoters through the secondary market.

Further, the regulator has also added that companies wanting to meet the public shareholding requirement through any other means could approach the former with appropriate details. Based on merit such requests would be considered by the market regulator which would attempt to communicate its decision within 30 days from the date of receipt of such requests.

The S&P CNX Nifty opened at 5,298.20; about 17 points lower compared to its previous closing of 5,315.05, and has touched a high and a low of 5,300.60 and 5,275.15 respectively.

The index is currently trading at 5,277.00, lower by 38.05 points or 0.72%. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were Reliance Infra up by 1.14%, Cipla up by 0.98%, Bharti Airtel up by 0.76%, Jindal Steel up by 0.51% and Sesa Goa up by 0.49%.

On the flip side, NTPC down by 1.90%, HUL down by 1.83%, BHEL down by 1.80%, Hindalco down by 1.60% and TCS down by 1.55%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was marginally down by 0.54 points or 0.02% to 2,052.93, Hang Seng was down by 64.80 points or 0.33% to 19,488.11, Jakarta Composite declined by 29.02 points or 0.72% to 3,998.84, Nikkei 225 plunged by 99.57 points or 1.11% to 8,884.21 and Kospi Composite was down by 2.58 points or 0.14% to 1,903.55

On the other hand, Straits Times was up by 3.21 points or 0.12% to 3,015.35 and Taiwan Weighted was up by 19.20 points or 0.25% to 7,391.01.

KLSE Composite was closed today on account of Merdeka day holiday.