Markets trade on a flat note ahead of the FDI debate

Markets are trading on a flat note ahead of the FDI debate in the parliament. Markets have opened on a weak note in trades today amid mixed macroeconomic data out of the US and the slow progress in negotiations over the 'fiscal cliff'. On the domestic front, investors are cautious ahead of debate and voting on opening up of foreign direct investment (FDI) for the retail sector in Parliament that will test the Congress-led UPA government's ability to push through key reforms. As the government is struggling to keep the pace of reforms going, global ratings agency Fitch has cautioned that a loosening in fiscal policy ahead of the 2014 elections could further weaken India's public finances and fiscal slippages in the run-up to 2014 general elections along with declining growth could result in India's rating downgraded to below the investment level.

The BSE Sensex is currently trading at 19,315.79, up by 10.47 or 0.05% and has touched a high and a low of 19,359.49 and 19,263.71 respectively. There were 13 stocks advancing against 17 declines on the index.  The market breadth on the BSE was positive; there were 1,496 shares on the gaining side against 1,301 shares on the losing side while 138 shares remain unchanged.

The broader indices have lost traction though trading in green; the BSE Mid cap and Small cap indices rose 0.01% and 0.42% respectively.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.46%, Realty up by 0.39%, Bankex up by 0.37%, Healthcare up by 0.36% and PSU up by 0.27%, while CD down by 0.69%, IT down by 0.58%, Auto down by 0.58%, CG down by 0.37% and Metal too down by 0.37% were the top losers on the BSE.

The top gainers on the Sensex were RIL up by 2.13%, SBI up by 1.44%, Bajaj Auto up by 1.42%, ONGC up by 1.39% and ICICI Bank was up by 1.07%.

On the other hand, M&M down by 1.64%, NTPC down by 1.53%, Wipro down by 1.42%, Sterlite Industries down by 1.24% and TCS down by 1.17% were the major losers on the Sensex.

Meanwhile, amid growing concerns over availability of affordable essential drugs in the wake of global firms acquiring local companies, the government has decided that all foreign investments in existing domestic Pharma firms should be allowed only after clearance by the Foreign Investment Promotion Board (FIPB).  Any foreign company acquiring an Indian firm, which had been producing essential medicines, would have to continue to do so till the time the Competition Commission of India (CCI) was empowered to vet such deals and views on such mergers and acquisitions.

The decision was taken at a high level meeting chaired by the Prime Minister Manmohan Singh that was attended by the Finance Minister P Chidambaram, Commerce and Industry Minister Anand Sharma and Health Minister Ghulam Nabi Azad.

The amendment to the Competition Act 2002 was approved by the Cabinet in October this year; the government is checking the legality of inserting new sectoral specific clauses in the Act so that the CCI could direct foreign firms to produce a specific quantity of essential medicines after acquiring an Indian company.

Moreover, it is also being examined whether the threshold limit for foreign investment in Brownfield projects that would require CCI clearance should be revised from the existing about Rs 750 crore limit.

The S&P CNX Nifty is currently trading at 5,876.25, up by 5.30 points or 0.09% and has touched a high and a low of 5,886.95 and 5,859.00 respectively. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were JP Associates up by 3.44%, Ranbaxy up by 2.66%, RIL up by 2.15%, BPCL up by 1.92% and IDFC up by 1.57%.

On the flip side, M&M down by 1.88%, Ambuja Cements down by 1.86%, Sesa Goa down by 1.48%, Wipro down by 1.42% and TCS down by 1.37% were the top losers on the Nifty.

The Asian markets have made a mixed close; Shanghai Composite was up by 0.78%, Hang Seng gained 0.15%, KLSE Composite was up by 0.02% and Taiwan Weighted was up by 0.01%. On the other hand, Straits Times was down by 0.12%, Nikkei 225 was down by 0.27%, Jakarta Composite was down by 0.76% and Seoul Composite was down by 0.25%.

The European markets are trading in green, France’s CAC 40 declined by 0.66%, Germany’s DAX was up by 0.10% and the United Kingdom’s FTSE 100 has gained