Markets continue negative trade; fertilizer stocks bucking the trend

After a slightly positive start, Indian equity markets retreated from its higher level and currently trading in negative territory with substantial losses. The 30-share BSE Sensex slipped 22 points, while 50-share NSE Nifty fell 5 points on profit booking. Consolidation continued in the market ahead of earnings season that will be kicked off on Oct 12 with Infosys declaring results for the September quarter. Investors remained away from any strong positions on concerns over Standard and Poor’s downgrade warning on India’s rating and concerns about the economic outlook for Asian countries. In currency market, Indian rupee pared its marginal gains amid strong dollar demand from importer’s and bank. On sectoral front, realty, power, bank, PSU stocks were finding fairly good support, while stocks from automobile and FMCG sectors were trading weak.

Meanwhile, reports that Cabinet has given approval to direct urea subsidy transfer, which was pending for long time, sent fertilizer stocks soaring more than 5%. Now, the payment of fertilizer subsidy to companies will be based on the receipt of fertilizers and the acknowledgement of receipts of fertilizers by the retailers, which will be tracked on the ICT-enabled mobile Fertilizer Monitoring System. In global markets, Asian stocks fell on Thursday after Standard & Poor's cut Spain's sovereign debt rating by two notches to BBB-minus, just above junk territory, citing a deepening recession and growing concerns about the debt crisis. Back home, the market breadth favoring negative trend; there were 1,172 shares on the gaining side against 1,197 shares on the losing side while 94 shares remain unchanged.

The BSE Sensex is currently trading at 18,608.74 down by 22.36 points or 0.12% after trading in a range of 18,670.43 and 18,581.49. There were 13 stocks advancing against 17 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36% and Small cap index was up by 0.14%.

The top gainers on the BSE sectoral space were, Realty up by 2.35%, Power up by 0.35%, Metal up by 0.32%, Bankex up by 0.22% and PSU up by 0.21%. While, Auto down by 0.65%, FMCG down by 0.60%, CD down by 0.42% and Oil & Gas down by 0.17% were top losers on the sectoral space.

The top gainers on the Sensex were BHEL up by 1.43%, Coal India up by 1.13%, Tata Power up by 1.05%, Bharti Airtel up by 0.88% and HDFC Bank up by 0.72%. On the other hand, Maruti Suzuki down by 2.09%, SBI down by 1.13%, GAIL down by 0.81%, ITC down by 0.78% and Bajaj Auto down by 0.75 % were top losers on the Sensex. 

Mean while, NBFCs with foreign holding of more than 75 per cent and up to 100 per cent, with the minimum paid-up capital of $50 million, are now permitted to open any number of subsidiaries in India, as per the amendment to the Foreign Direct Investment (FDI) Scheme by Reserve Bank of India (RBI).

Earlier condition set up by RBI mandated 100% foreign owned NBFCs with a minimum capitalisation of $50 million for setting up step down subsidiaries for specific NBFC activities, without any restriction on the number of operating subsidiaries and without bringing in additional capital.

However, as per the latest norms, the step down or operating subsidiaries could set up without any restriction on their number and without bringing in additional capital.

The S&P CNX Nifty is currently trading at 5,646.65, down by 5.50 points or 0.10% after trading in a range of 5,666.55 and 5,636.95. There were 26 stocks advancing against 23 declines on the index, while one remain unchanged.

The top gainers of the Nifty were Siemens up by 1.61%, DLF up by 1.55%, BHEL up by 1.28%, BPCL up by 1.22% and Coal India up by 1.22%. While, Maruti down by 2.14%, SBI down by 1.06%, ITC down by 1.01%, Bajaj-Auto down by 0.98% and GAIL down by 0.88% were top losers on the index

Most of the Asian equity indices were trading in the red; Straits Times was down by 0.30%, Kospi Composite was down by 0.77%, Nikkei 225 was down by 0.63%, Jakarta Composite down by 0.26%, Shanghai Composite was down by 0.63%, Taiwan Weighted was down by 1.85%, KLSE Composite was down by 0.19% and Hang Seng down by 0.03%.