Benchmarks continue lackadaisical trade below neutral line

Indian equities continued lackadaisical trade below neutral line in the late morning session. While, most of the Asian markets were trading in the red at this point of time ahead of a meeting by European finance ministers later in the day to discuss the region’s debt crisis. Meanwhile, China’s GDP growth is estimated to fall to 7.7 percent this year because of weak exports and lower investment growth. Back home, traders were seen piling up position in HC, Metal and CD sector while selling was witnessed in Realty, Oil &Gas and CG sector. Sun Pharma, Dr. Reddy's Laboratories, Cipla, Lupin, Ranbaxy Laboratories and Glaxosmithkline Pharmaceuticals from HC pack were seen trading in green edging the markets higher. Tata Steel, Jindal Steel & Power, Sterlite Industries (India), JSW Steel and NMDC from Metal pack were seen trading firm in green. Oil &Gas majors - RIL, ONGC, Gail India and Oil India were capping the markets’ gains while Realty majors DLF, Unitech, HDIL and Sobha Developer too were pressurizing the markets.

Meanwhile, telecom stocks were providing some strength to the gauges as stocks like Idea Cellular, Bharti Airtel and RCom traded with traction as the Empowered Group of Ministers led by Finance Minister P Chidambaram will be meeting today on the spectrum issue, the decision on charging telecom service providers for excess spectrum beyond contractual obligations is likely to be taken. Moreover, Hotel stocks viz. Hotel Leela Venture, The Indian Hotels Company and Taj Hotels Resorts all edged higher after the government, on October 5, 2012, unveiled data that suggested foreign tourist arrivals in India rose 3.2% in September 2012 over September 2011.

In the scrip specific development, Era Infra Engineering edged higher on bagging order worth Rs 49.64 crore. Polaris Financial Technology rose on implementing Intellect Quantum CBS in National Bank of Ethiopia. Southern Petrochemicals gained on re-commencing production at Tuticorin plant. VBC Industries soared on starting manufacturing activities at Kurnool plant. McNally Bharat jumped on bagging order worth Rs 69.97 crore. Transgene Biotek surged on plan to join hands with Mauritius-based FII.

The NSE Nifty and BSE Sensex were managing to hold their psychological 5,700 and 18800 levels respectively. The market breadth on BSE was positive, in the ratio of 1296:829.

The BSE Sensex is currently trading at 18889.39 down by 49.07points or 0.26% after trading in a range of 18969.19 and 18865.97. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.59% and Small cap index was up by 0.71%.

On the BSE sectoral space, HC up by 1.62%, Metal up by 0.63%, CD up by 0.57%, FMCG up by 0.45% and PSU up by 0.06% were the top gainers. While, Realty down by 1.13%, Oil &Gas down by 1.03%, CG down by 0.87%, Bankex down by 0.65% and IT down by 0.47% were the top losers.

The top gainers on the Sensex were Sun Pharma up by 3.45%, Cipla up by 1.57%, Bharti Airtel up by 1.56%, Sterlite Industries up by 1.44% and Tata Steel up by 1.43%. On the other hand, Tata Power down by 2.40%, BHEL down by 2.19%, RIL down by 2.00%, Hindalco Industries down by 1.52% and Wipro down by 1.40% was only the loser on the Sensex. 

Mean while, giving a much needed respite to the housing finance companies (HFCs), the Securities and Exchange Board of India (SEBI) has decided to relax the investment limit for such entities in debt mutual funds. In its meeting held on Oct 6, SEBI decided that an additional exposure to financial services sector (over and above the existing 30%) not exceeding 10% of the net assets of the scheme in debt oriented mutual fund schemes will be allowed by way of increase in exposure to HFCs only, subject to the condition that such securities issued by HFCs are rated AA and above and these HFCs are registered with National Housing Bank (NHB). However, the total investment in HFCs cannot exceed 30% of the net assets of the scheme.

In a circular last month, the SEBI had directed mutual funds to ensure the total exposure of their debt schemes in a particular sector did not exceed 30 per cent of the net assets of the scheme. However, considering the important role played by HFCs in fulfilling the social objective of increased home ownership and supporting the economy by creating demand for construction of new homes, it decided to amend its earlier decision.

In other decisions, the SEBI has allowed foreign institutional investors (FIIs) to re-invest 50 per cent of their previous year’s debt limit in the current year. Applicable January 01, 2014, the FIIs shall be allowed to re-invest during the calendar year to the extent of 50% of their debt holdings at the end of the previous calendar year. Further, the utilisation period for government and corporate debt limits for FIIs has been reduced to 30 days and 60 days, respectively, from the earlier 90 days. This will result in greater flow of FII money into the debt market.

SEBI has also considered expansion of other asset classes, which can be held in demat form and approved proposal to amend the SEBI (Depositories & Participants) Regulations to enable depository to share the necessary information / data with its SBU with respect to the assets/ instruments held by them for the purpose of generation of consolidated statement. 

The S&P CNX Nifty is currently trading at 5,729.90, down by 17.05 points or 0.30% after trading in a range of 5,751.85 and 5,719.50. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 4.06%, Bharti Airtel up by 1.66%, CIPLA up by 1.58%, BPCL up by 1.46% and Tata Steel was up by 1.40%. While, DLF down by 4.30%, Tata Power down by 2.60%, BHEL down by 2.20%, Reliance down by 2.08% and Ambuja Cement  down by 1.66% were the losers on the index

Most of the Asian equity indices were trading in the red; Shanghai Composite was down by 0.75%, Hang Seng was down by 0.58%, Straits Times was down by 0.63% KLSE Composite was down by 0.18%, Kospi Composite was down by 0.61% and Taiwan Weighted was down by 0.93%. While Jakarta Composite up by 0.06% was the lone gainer. Markets in Japan remained closed on account of Health-Sports Day.