Indian equities pare losses; Nifty rises above 5,900 mark

Indian equity markets pared losses but continued its weak trade in the late afternoon session on account of selling in front line counters and taking cues from European counterparts. There were mixed reports on the economy front, with higher January factory output data did provide some solace to the investors by hinting that the economy was on the path of the recovery, on the other side, higher CPI data casted doubts about whether RBI would slash rates in its upcoming monetary policy review on March 19, 2013. The sentiments on the street were also dampened after brokerage house Nomura came out with its report where it expects current account deficit for FY13 at 5.1% compared with 4.2% in FY12, and added that the improvement in trade deficit for February would be tough to sustain. Traders were seen piling some position in FMCG and Auto sector while selling was witnessed in Consumer Durables, Realty and Power sector.

In the scrip specific development, Tata Power was trading in red after Credit Suisse downgraded the company to underperform from neutral and cut its target price. Aanjaneya Lifecare is locked at lower circuit limit as the company has decided to defer the issue of foreign currency convertible bonds (FCCBs) till further notice. A2Z Maintenance & Engineering Services is trading in red following 52-weeks low after investor and trader Rakesh Jhunjhunwala sold partial stake in the company. On the global front, the Asian markets were trading in red barring Straits Times while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,950 and 19,600 levels respectively. The market breadth on BSE was negative in the ratio of 1008:1720 while 112 scrips remain unchanged.

The BSE Sensex is currently trading at 19,568.59, down by 77.62 points or 0.40% after trading in a range of 19,697.84 and 19,505.75. There were 8 stocks advancing against 22 declines on the index.

The broader indices too witnessed additional selling pressure; the BSE Mid cap and Small cap indices were trading lower by 0.75% and 0.60% respectively.

The top losing sectoral indices on the BSE were, Consumer Durables down by 1.81%, Realty down by 1.27%, Power down by 1.11%, Metal down by 0.91% and Bankex down by 0.90%, while FMCG up by 0.47% and Auto up by 0.13% continued to remain the only gainers on the BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.14%, Tata Motors up by 1.09%, Gail India up by 0.67%, ITC up by 0.54% and Mahindra & Mahindra up by 0.44%.

On the flip side, Tata Power down by 2.82%, Sterlite Industries down by 2.30%, Bharti Airtel down by 2.02%, HDFC Bank down by 1.69% and Bajaj Auto down by 1.65% were the top losers on the Sensex.

Meanwhile, in order to attract more overseas investment into the country, the government is working on bringing new norms for a common know your customer (KYC) for foreign institutional investors (FIIs). While addressing the Rajya Sabha on the Securities and Exchange Board of India (Amendment) Bill, 2013, Finance Minister P Chidambaram said, ‘government will soon come out with a new set of norms that will have a common KYC across various regulators, be it pension, banking, stocks or insurance. There should be one KYC.’

By adding further he said, if a new FII applies in India, it has to go through due diligence and once registered it has to go through KYC norms. Currently, there are 1,756 FIIs registered in the country and it takes a maximum of three weeks for an FII to register with Securities and Exchange Board of India (SEBI).  Chidambaram also assured of serious action in matters of insider trading and said that SEBI has been asked to step up systems and surveillance to deal with such matters.

Observing that the cumulative investment graph of FIIs in the country is rising, Chidambaram said, 'during the year 2012, there has been an investment of $31 billion by FIIs. During the current year from January 1 till date, there has been an investment of $10 billion by FIIs.’ Pursuant to which Indian stock markets have risen by 25 per cent and have given a good return.  Chidambaram also hoped for more investments coming in from FIIs in the stock markets, which will further enhance returns to investors.

Meanwhile, the SEBI (Amendment) Bill, 2013, which was passed in the Rajya Sabha by voice vote also sought the appointment of a retired High Court judge having held the position for the next  seven years for heading the Securities Appellate Tribunal (SAT). As per existing provisions, only a serving or retired Supreme Court judge can head the Tribunal, but government was finding it difficult to fill the slot.

The CNX Nifty is currently trading at 5,908.35, down by 34.00 points or 0.57% after trading in a range of 5,952.00 and 5,893.65. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were Ranbaxy Laboratories up by 2.39%, Ambuja Cements up by 1.31%, Hindustan Unilever up by 1.17%, Tata Motors up by 1.14% and ACC up by 0.92%.

On the flip side, Cairn India down by 3.45%, Tata Power down by 2.92%, Sesa Goa down by 2.40%, Siemens down by 1.96% and Bharti Airtel down by 1.82% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 1.04%, Hang Seng slipped 0.87%, KLSE Composite dipped by 0.21%, KOSPI Composite dropped 0.50%, Nikkei 225 down by 0.28% and Taiwan Weighted was down by 0.55%.

On the flip side, Straits Times was up by 0.35% and Jakarta Composite remained shut for the trade today.

The European markets were trading in red; France’s CAC 40 lost 0.01%, Germany’s DAX descended 0.09% and United Kingdom’s FTSE 100 dropped by 0.09%.