Sensex, Nifty manage to keep head above water

Indian equities are trading above the neutral line on back of strong buying in frontline counters in the late morning session. Most Asian equity indices were trading in the green at this point of time on positive cues from the US markets. Back home, traders were seen piling up position in Auto, FMCG and CG sector while selling was witnessed in Tech, IT and HC sector. Tata Motors, Mahindra & Mahindra, Maruti Suzuki India and Bosch, from Auto pack were seen trading in green. ITC, Hindustan Unilever, Nestle India, United Spirits and Colgate Palmolive from FMCG pack were seen trading in green. However HC stocks - Sun Pharmaceutical Industries, Cipla, Divi's Laboratories and Wockhardt were capping the markets’ gains. Tech majors Infosys, Tech Mahindra, ZEE Entertainment Enterprises and Idea Cellular were pressurizing the markets.

In the scrip specific development, ABB was trading in red after NSE has decided to remove it from trading in the futures & options (F&O) segment. Metal stocks such as Sterlite Industries, Hindalco, JSW Steel, Tata Steel and Sesa Goa were trading in green after LMEX, a gauge of six metals traded on the London Metal Exchange jumped 2.25% on November 19, 2012. Honeywell Automation India edged lower on reporting that parent firm is considering delisting of its Indian unit from stock exchanges.

Further, Sadbhav Engineering jumped on emerging successful bidder for project worth Rs 720 crore. Steel Exchange India gained as SPV commissions CFBC boiler and turbines.  Atul Auto soared on the plans of capacity expansion at Rajkot plant. Rolta India surged on entering into strategic partnership with SAP. Godrej Consumer jumped on introducing single-use hair color. Polaris Financial rose on decision to invest $100 million for acquisition. Essar Shipping Zoomed on including two more vessels to operating fleet.

The NSE Nifty and BSE Sensex were managing to hold their psychological 5,550 and 18300 levels. The market breadth on BSE was positive, advances: declines in the ratio of 1216:1156.

The BSE Sensex is currently trading at 18388.07, up by 49.07 points or 0.27%. There were 17 stocks advancing against only 12 declines while 1 remain unchanged on the index.

The overall market is trading in green while the broader indices were trading on a firm note; the BSE Mid cap and Small cap indices rose 0.17% and 0.22% respectively.

The top gaining sectoral index on the BSE was Auto up by 0.61%, FMCG up by 0.42%, CG up by 0.32%, Realty up by 0.28%, Metal up by 0.20%. While, TECk down by 0.26% , IT down by 0.18%, HC down by 0.11%, Oil & Gas down by 0.08% and CD down by 0.06% were top losers on the index.

The top gainers on the Sensex were HDFC up by 2.12%, Tata Motors up by 1.63%, Mahindra & Mahindra up by 1.22%, Gail India up by 1.10% and TCS up by 0.91%. While, Infosys down by 1.17%, Hero MotoCorp  down by 0.84%, Bajaj Auto down by 0.76%, Sun Pharmaceuticals down by 0.73% and ICICI bank down by 0.53% were the top losers on the Sensex.

Meanwhile, in an effort to dissuade people from indulging in speculative activity, the Reserve Bank of India (RBI) on Nov 19 has directed a total ban on banks from advancing any loans to its customers for purchasing gold in any form, which includes primary gold, gold bullion, gold jewellery, gold coins, units of gold Exchange Traded Funds (ETF) and units of gold mutual funds.

Country’s apex bank further clarified that, no advances should be granted by banks against gold bullion to dealers or traders in gold if, in their assessment, such advances are likely to be utilized for purposes of financing gold purchase at auctions or speculative holding of stocks and bullion.

This decision comes in the wake of significant rise in imports of gold in recent years, which is putting pressure on Current Account Deficit (CAD). In the 2011-12 fiscal, country’s gold imports stood at $60 billion and the quantum of import was 1,067 tonnes. Many banks are providing loans to the customers to buy gold. These easily available loans are creating more demand for gold, further leading to increase in gold prices. Additionally, the huge demand created for gold is also triggering imports. However, the RBI has allowed banks to provide finance for genuine working capital requirements of jewelers.

Back in its Monetary Policy Statement of April 2012, RBI constituted a Working Group to study issues relating to gold imports and gold loans by Non-Banking Financial Companies (NBFCs) in India. The Working Group, submitted its draft report in August 2012, suggested that other than working capital finance, banks are not permitted to finance purchase of gold in any form.

The S&P CNX Nifty is currently trading at 5,586.35, higher by 14.95 points or 0.27%. There were 27 stocks advancing against 23 stock declines on the index.

The top gainers of the Nifty were HDFC up by 2.14%, Tata Motors up by 1.57%, Mahindra & Mahindra up by 1.32%, IDFC up by 1.23% and Kotak Bank up by 1.13%. On the flip side, JP Associate down by 1.29%, Infosys down by 1.21%, Hero MotoCorp down by 0.96%, Punjab National bank down by 0.79% and Sun Pharmaceuticals down by 0.68% remained top losers on the index.

Most of  the Asian equity indices were trading in the green; Hang Seng up by 0.79%, Straits Times was up by 0.52%, Kospi Composite up by 0.51%, KLSE Composite was up by 0.14, Taiwan Weighted up by 0.29%, were the gainers amongst Asian pack.

On the flip side, Nikkei 225 down by 0.17%, Shanghai Composite declined 0.53%, Jakarta Composite down by 0.12% were trading in red.