Markets slip into red on profit-booking in power, banking stocks

Indian markets despite a positive start are unable to keep their momentum up in the late morning trade, slipping marginally into red. Though, the power stocks are buzzing after the government’s debt restructuring approval for the SEBs but the caveat that is accompanying with the restructuring package like raising tariffs and curbing transmission and distribution losses has raised concerns. There are other worries too, related to the sectors that are restricting gains, like the power producers are still grappling with coal shortage, land, environment clearance and various other regulatory wrangles. Back on street, some of the power companies have started witnessing profit booking after the early gains on these concerns. The rate sensitive sectors too are under pressure along with commodity stocks that are reflecting the somberness in the global markets. However, the defensive sector FMCG and Healthcare has taken the lead capping any further slide in the markets; IT sector stocks too are witnessing some lower level buying.

The BSE Sensex is currently trading at 18,666.98, down by 6.36 points or 0.03% after trading in a range of 18,790.01 and 18,648.81. There were 12 stocks advancing against 18 declines on the index.

The market breadth on BSE too has turned weak with 1,215 stocks advancing against 1,262 declines. The broader indices were flat, the BSE Mid cap index remain unchanged, while the Small cap index was up by 0.22%.

On the BSE sectoral space, HC up by 0.87%, FMCG up by 0.78%, CD up by 0.62%, IT up by 0.51% and TECk up by 0.37% were the top gainers. While, Metal down by 1.31%, Auto down by 0.70%, Oil & Gas down by 0.61%, PSU down by 0.57% and Realty down by 0.50% were the top losers.

The top gainers on the Sensex were Cipla up by 2.20%, TCS up by 1.29%, HDFC up by 1.18%, ITC up by 1.00% and M&M up by 0.63%. On the other hand, Jindal Steel down by 2.80%, Tata Steel down by 1.64%, Tata Motors down by 1.44%, HDFC Bank down by 1.23% and Bharti Airtel down by 1.17% were the top losers on the Sensex.

Mean while, country’s foreign direct investment (FDI) in India, after declining for three consecutive months, has now increased by about 60 percent to $1.76 billion in July from $1.10 billion in the corresponding month of the previous year. However, for the period of April-July 2012 the FDI inflows dipped to $6.18 billion from $14.6 billion in the corresponding month of the last year.

Foreign inflows in April, May and June have dipped to $1.85 billion, $1.32 billion and $1.24 billion against $3.12, $ 4.66 billion and $5.65 billion respectively, in a year-ago period. Meanwhile, sectors which received large FDI inflows in the month under review include services, pharmaceuticals, construction and power. Further, the country has received maximum FDI from Mauritius, the Netherlands, the UK, Singapore and Cyprus.

Commerce and Industry Ministry strongly feels that Government announced big-bang reform measures like allowing foreign direct investment in multi-brand retail, civil aviation, broadcasting and power exchanges, would further help in boosting investments in the country.

Shrugging off its policy paralysis, the government has pushed through the move that will allow 51% foreign direct investment in multi-brand retail. It has also relaxed norms for foreign direct investment in the aviation sector, allowing international airlines to invest in domestic peers and cleared a slew of other reform-oriented measures - an increase of foreign direct investment in some broadcasting services from 49% to 75% and disinvestment in four key profit-making public sector units (PSUs).

The S&P CNX Nifty is currently trading at 5,654.95, down by 14.65 points or 0.26% after trading in a range of 5,702.70 and 5,652.75. There were 17 stocks advancing against 32 declines, while one stock remain unchanged on the index.

The top gainers of the Nifty were Cipla up by 2.63%, Ranbaxy up by 1.44%, HCL Technology up by 1.20%, TCS up by 1.12% and HDFC up by 1.09%. While, Axis Bank down by3.77%, Jindal Steel down by 3.17%, Cairn India down by 3.08%, Tata Steel down by 2.20% and IDFC down by 2.12% were the major losers on the index.

The Asian markets were showing mixed trend, Shanghai Composite was down by 0.13%, Hang Seng was down by 0.09%, Kospi Composite was down by 0.60% and Taiwan Weighted was down by 0.44%,

On the other hand, Jakarta Composite was up 0.16%, KLSE Composite was up 0.41%, Nikkei 225 was up by 0.25% and Straits Times gained 0.14%.