Bourses slip into negative territory

Key Indian indices erasing all the gains slipped into negative territory in early noon session on Thursday, despite positive cues from Asian markets. Sell off in Telecom and Oil & Gas stocks dragged markets lower. The broader markets were too crumbling under pressure. Sentiments got undermined with the Economist Intelligence Unit’s (EIU) statement that India is not likely to benefit from the US-China trade tensions largely owing to existing policy barriers to large-scale production, strict labour laws and difficult land-acquisition process. Traders remained concerned with the report that the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) stood at Rs 76,611 crore in September-end, registering the fourth consecutive month-on-month decline. Investments through P-notes have been continuously declining since June. Adding some concern, rating agency Standard and Poor’s (S&P) in its latest report has warned that the Indian financial sector is facing rising risk of contagion and failure of any large non-banking financial company (NBFC) or housing finance company (HFC) could disrupt interbank market, payments, hurt credit availability and adversely affect country’s Gross Domestic Product (GDP) growth.

On the global front, Asian markets are trading mostly in green, in line with the positive trend from wall street overnight after the release of upbeat corporate earnings results. Back home, IT stocks remained in focus with former NASSCOM President R Chandrashekhar’s statement that a hard Brexit would benefit India's information technology (IT) services companies to strengthen partnerships in the UK with anticipated easing of flow of high-skilled manpower.

The BSE Sensex is currently trading at 39000.45, down by 58.38 points or 0.15% after trading in a range of 38952.93 and 39327.15. There were 11 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.22%, while Small cap index was down by 0.04%.

The only gaining sectoral indices on the BSE were Realty up by 0.24% and FMCG was up by 0.01%, while Telecom down by 2.35%, PSU down by 1.32%, Oil & Gas down by 1.30%, Power down by 0.64% and Energy was down by 0.62% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 2.73%, Tech Mahindra up by 1.66%, Vedanta up by 0.65%, Larsen & Toubro up by 0.61% and Bajaj Auto up by 0.55%. On the flip side, Mahindra & Mahindra down by 1.41%, SBI down by 1.29%, Hero MotoCorp down by 1.26%, Indusind Bank down by 1.19% and Infosys down by 1.18% were the top losers.

Meanwhile, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P notes) stood at Rs 76,611 crore in September end, registering the fourth consecutive month on month decline. Investments through P notes have been continuously declining since June. P notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly after going through a due diligence process.

According to the latest data from the Securities and Exchange Board of India (SEBI), the cumulative value of P note investments in the domestic markets    equity, debt, and derivatives    fell to Rs 76,611 crore till September end from Rs 79,088 crore in August end. In July end, the investment was at Rs 81,082 crore, while it was at Rs 81,913 crore in the end of June and Rs 82,619 crore in May end.

Out of the total investments made till the end of September, Rs 50,676 crore was invested in the equities segment, Rs 25 crore in debt and Rs 241 crore in the derivatives market. The use of P notes has been on a decline since 2017 and slumped to a nine and a half year low of Rs 66,587 crore in October end due to gradual measures taken by regulatory bodies to curb the usage of P notes. 

Recently, the board of SEBI has approved a proposal to rationalise the framework for issuance of P notes    an instrument once very popular with foreign investors. In July 2017, markets regulator SEBI has notified stricter P notes norms stipulating a fee of $1,000 that will be levied on each instrument to check any misuse for channelising black money.

The CNX Nifty is currently trading at 11579.95, down by 24.15 points or 0.21% after trading in a range of 11564.70 and 11679.60. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.65%, Eicher Motors up by 1.98%, Tech Mahindra up by 1.74%, Ultratech Cement up by 0.86% and Bajaj Finserv up by 0.85%. On the flip side, Bharti Infratel down by 5.05%, BPCL down by 3.93%, Grasim Industries down by 3.29%, GAIL India down by 2.45% and Wipro down by 1.63% were the top losers.

Asian markets were mostly trading in green; Nikkei 225 surged 128.98 points or 0.57% to 22,754.36, Hang Seng increased 128.21 points or 0.48% to 26,694.94, Jakarta Composite soared 49.73 points or 0.79% to 6,307.54, Taiwan Weighted strengthened 56.43 points or 0.5% to 11,296.10, Straits Times advanced 26.60 points or 0.85% to 3,170.88 and KOSPI rose 5.15 points or 0.25% to 2,085.77. On the flip side, Shanghai Composite was down by 10.77 points or 0.37% to 2,930.85.