Markets erase early gains amid disappointing IIP numbers

After edging higher in the early trade despite of weak cues from Asian peers, Indian equity markets erased all early gains amid disappointing industrial output data that fell to negative 0.4% in September as against 2.3% in August. In currency markets, Indian rupee erased all its early gains and depreciated against dollar in the late morning session. On sectoral front, capital goods, metal and oil stocks have drifted lower. Realty and automobile stocks too have come off their highs. Select banking, FMCG and consumer durables stocks were holding on in positive territory. In global markets, Asian shares were trading in red as investor sentiment was weighed down by concerns over US fiscal woes as well as Greece's bailout, despite improving economic data from the world's two largest economies, the United States and China. Back home, the market breadth favoring negative trend; there were 1,172 shares on the gaining side against 1,198 shares on the losing side while 103 shares remain unchanged.

The BSE Sensex is currently trading at 18,682.82 down by 0.86 points after trading in a range of 18,750.92 and 18,628.53. There were 13 stocks advancing against 16 declines and one remains unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29% and Small cap index was up by 0.23%.

The top gaining sectoral indices on the BSE were Bankex up by 0.87%, CD up by 0.79%, FMCG up by 0.78%, IT up by 0.36% and TECk up by 0.35%. While, Metal down by 0.55%, CG down by 0.50%, Oil &Gas down 0.48%, Auto down 0.23% and Realty down by 0.16% were top losers on the index.

The top gainers on the Sensex were SBI up by 1.24%, TCS up by 1.24%, HDFC Bank up by 1.02%, Bharti Airtel up by 1.02% and ICICI Bank up by 0.83%.

On the flip side, Tata Steel was down by 1.88%, Tata Power was down by 0.94%, Coal India was down by 0.94%, Hero MotoCorp was down by 0.88% and Maruti Suzuki was down by 0.86% were the top losers on the Sensex.

Meanwhile, to enable participation of long-term and stable class of investors in the corporate bond market, the Finance Ministry is planning to relax investment guidelines for pension, provident funds and insurance companies. An indication to this effect was given by Economic Affairs Secretary Arvind Mayaram at the India Infrastructure Investment Forum on Nov 9.

The legal amendments are required to strengthen the regulation for corporate debt. Currently, pension funds are required to keep 55 per cent of their debt investments in Central and State Government securities. The insurance companies were not allowed to hold over 10 per cent of the equity of investee company. Also, at least three-fourths of their debt portfolio should be invested in triple-A rated bonds.

Moreover, finance ministry is looking at amendments to the rules formulated by the Corporate Affairs Ministry, income tax law and SARFAESI law and for removal of legal and regulatory constraints for introduction of new products such as covered bonds, municipal bonds and credit defaults swaps. However, a lot of sovereign wealth funds and foreign pension funds had evinced interest in infrastructure debt funds, Mayaram added.

The S&P CNX Nifty is currently trading at 5,691.05, up by 4.80 points or 0.08% after trading in a range of 5,718.90 and 5,673.30. There were 25 stocks advancing against 23 declines while 2 stocks remains unchanged on the index.

The top gainers of the Nifty were SBI up by 1.34, TCS up by 1.29%, IDFC up by 1.20%, Axis Bank up by 1.06% and HDFC Bank up by 1.03%.

On the flip side, DLF down by 2.08%, Tata Steel down by 1.88%, Hero MotoCorp down by 0.90%, Tata Power down by 0.89% and Coal India down by 0.85%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite was down by 0.04%, Kospi Composite down by 0.19%, Jakarta Composite down by 0.26%, Straits Times down by 0.08%, KLSE Composite down by 0.09%, Nikkei 225 down by 0.93% Taiwan Weighted  down by 0.35%, while Hang Seng up by 0.20% was the only gainer.