Indian equities show volatile trade; all eyes on FDI vote in Upper House

Indian markets are showing volatile trend in the late morning session of trade and after plunging into red, have once again started gathering strength to trade marginally in green on optimism that the government set to sail smoothly through FDI vote in the Rajya Sabha after ruling party ally BSP agreed to extend support. Also, most of the Asian markets were trading in the green on positive cues from the US markets. On the home turf, the traders were seen piling up position in Auto, Consumer Durables and Capital Goods sector, while selling was being seen in IT, FMCG and Metal sector. In the scrip specific development, Heaxware Technologies was trading under pressure after the company revised its revenue guidance downwards for the current quarter and for the year ending December 31, 2012. GMR Infrastructure was trading in red after reporting that a Singapore court ruled in favour of Maldives to cancel its $511 million airport development contract with the company. Maruti Suzuki India gained on reporting of price hike in January. The NSE Nifty and BSE Sensex were managing to hold their psychological 5,900 and 19500 levels respectively. The market breadth on BSE was positive, in the ratio of 1368:888.

The BSE Sensex is currently trading at 19501.67 up by 14.87 points or 0.08% after trading in a range of 19561.87 and 19458.08. There were 14 stocks advancing against 16 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.70% and Small cap index was up by 0.81%.

The top gaining sectoral indices on the BSE were Auto up by 1.46%, Consumer Durables up by 0.84%, Capital Goods up 0.76%, Power was up by 0.45% and Realty was up by 0.40%, while IT down by 0.64%, FMCG down by 0.26%, Metal down by 0.23%, TECk down by 0.16% and Healthcare down by 0.01% were the major losers on the BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.43%, Tata Motors 2.07%, BHEL up by 1.76%, M&M up by 1.43% and Bharti Airtel was up by 1.37%.

On the flip side, HUL down by 0.82%, Sterlite Inds down by 0.82%, Infosys down by 0.77%, Dr Reddy’s down by 0.73% and ITC down by 0.68% were the top losers on the Sensex.

Meanwhile, the demand for accounting relief for the short-term foreign currency loans has been turned down by the centre stating that corporates would have to continue taking their forex losses on short-term foreign currency loans to the profit and loss account every quarter/year.

Corporate India has been demanding the accounting relief in respect of long-term foreign currency loans be extended to short-term foreign currency loans also, due to fluctuation losses on short-term foreign currency loans. Responding to industry chamber Assocham’s request for accounting relief on short-term foreign currency loans, the Corporate Affairs Ministry has conveyed that accounting relief provided in the Accounting Standard-11 are available only to long-term borrowings.

Further, the ministry insisted the management of every company to follow prudent risk management policies/practices to mitigate the foreign exchange risks by obtaining hedges under the conditions where the volatility in the exchange rates is probable. However, the industry submission has not convinced the Corporate Affairs Ministry, which is in no mood to provide any accounting relief for short-term foreign currency borrowings.

The Corporate Affairs Ministry had in December last year issued two notifications to provide relief for corporates that had sizeable long-term foreign currency loan exposure in their balance sheet, a huge respite for large corporate houses, such as Reliance Group and the Tatas as well as public sector majors, including Indian Oil Corporation and GAIL.

The S&P CNX Nifty is currently trading at 5,932.75, up by 1.85 points or 0.03% after trading in a range of 5,949.85 and 5,918.10. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 3.61%, Tata Motors up by 2.12%, BHEL up by 1.65%, M&M up by 1.63% and Bharti Airtel was up by 1.45%.

On the flip side, Grasim down by 1.12%, HCL Tech down by 1.16%, Sesa Goa down by 1.09%, HUL down by 0.98%, and Infosys down by 0.84% were the top losers on the Nifty.

Asian markets were mostly trading in green, Shanghai Composite was up by 1.27%, Hang Seng gained 0.32%, Nikkei 225 was marginally up by 0.05%, Straits Times was up 0.90%, Seoul Composite was up by 0.45% and Taiwan Weighted was trading higher by 0.20%.

On the other hand, Jakarta Composite was down by 0.25% and KLSE Composite was tad lower by 0.03%.