Sensex, Nifty trades marginally in green

Indian markets were trading marginally in the green in late morning session as the RBI slashed repo rates by 25 bps, leaving CRR unchanged at 4%. The positive domestic sentiment faded as the RBI kept the cash reserve ratio unchanged at 4 per cent. On the global front, all the Asian counters rallied as investors got some boost after Euro group decided to give Cyprus more flexibility over a bank levy which is part of the bailout conditions. Meanwhile, Japanese Nikkei has taken the lead with a gain of about two percent as exporters gained after the yen weakened against the dollar, boosting their earnings outlook.

Back home, to spur the growth in faltering economy, Reserve Bank of India (RBI), in a much anticipated move, in ‘Mid-Quarter Monetary Policy Review: March 2013, slashed its repo rate by 25 basis points at 7.50% against 7.75% earlier and left its Cash Reserve Ratio (CRR) unchanged at 4%.Consequently, reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, now stands adjusted to 6.50% with immediate effect. Meanwhile, the Marginal Standing Facility (MSF) rate, too determined with a spread of 100 basis points above the repo rate, stands adjusted to 8.50% with immediate effect.

The traders were seen piling up positions in Auto, Health Care and Realty while selling was seen in, PSU, Metal and Consumer Durables sector. In scrip specific actions, Mahindra & Mahindra gained on launching of Mahindra e2o electric car. Central Bank of India surged as shareholders approved the proposal to issue 30.84 crore equity shares on preferential basis to Government of India. Steel Authority of India slumped on reports a ministerial panel is likely to meet today, March19, 2013, to decide the floor price for sale of 10.82% stake in the state-run steel major.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 5800 and 19300 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in ratio of 1021: 947.

The BSE Sensex is currently trading at 19303.79, up by 10.59 points or 0.05% after trading in a range of 19378.61 and 19302.66. There were 15 stocks advancing against 15 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.07% and Small cap index was up by 0.09%.

The top gaining sectoral indices on the BSE were Auto up by 0.61%, Health Care up by 0.42%, Realty up by 0.34%, Bankex up by 0.25%, and FMCG up by 0.18% while, PSU down by 0.41%, Metal down by 0.37%, Consumer Durables down by 0.31%, Teck down by 0.17% and Oil & Gas down by 0.16% were the losers on the BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.95%, Gail India up by 1.94%, Sun Pharma up by 1.45%, ICICI Bank up by 1.37%, and Tata Motors up by 1.05%.

On the flip side, Coal India was down by 2.21%, BHEL was down by 1.48%, ONGC was down by 1.28% , TCS was down by 1.01% and HDFC Bank was down by 0.75% were the top losers on the Sensex.

Meanwhile, in a move attract more foreign funds into the country, Finance Minister P Chidambaram said the government is considering measures to liberalize the foreign investment cap in various sectors. He said foreign investment cap for many sectors can be removed or certainly relaxed as these caps are completely irrelevant in terms of the changed situation.   

In the FY14 Budget, Chidambaram had expressed the need to attract foreign funds to finance the rising current account deficit (CAD), which is the difference between the inflow and outflow of foreign currency. CAD was 4.6% of GDP in April-September 2012 and is estimated to be as high as 5% by the end of FY13.

Presently, there are various sectors where FDI limit is below 100 per cent. Earlier, in September last year, the government had liberalized foreign direct investment (FDI) norms in various sectors, including retail and aviation. While in multi-brand retail it is 51 per cent, in telecom and banking it is at 74 per cent. Further, in reconstruction companies, commodity exchanges, asset credit information companies and private security agencies, up to 49 per cent FDI is allowed.

The government has also approved hiking FDI limit in insurance and pension sector to 49 per cent, but the bill is pending for approval in Parliament. Besides this, the government has taken several steps to attract foreign funds in the country by liberalizing the external commercial borrowing (ECBs) norms. It is also planning to come up with accepted definition of FDI and portfolio investment where a foreign investor with more than 10 per cent stake would be treated as FDI.

The CNX Nifty is currently trading at 5,835.65 up by 0.40 points or 0.01% after trading in a range of 5,863.60 and 5,835.30. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Bajaj-Auto up by 2.06%, Gail up by 2.01%, IDFC up by 2.01%, Sun Pharmaceuticals up by 1.51% and ICICI Bank up by 1.25%.

On the flip side, Coal India down by 1.97%, BHEL down by 1.40%, ONGC down by 1.35%, Cairn down by 1.30% and TCS down by 1.16%, were the major losers on the index.

All Asian equity indices were trading in the green; Shanghai Composite rose 5.06 points or 0.23% to 2,245.08, Hang Seng jumped 46.61 points or 0.21% to 22,129.97, Jakarta Composite surged 27.67 points or 0.58% to 4,830.50, KLSE Composite increased 5.52 points or 0.34% to 1,626.88, Nikkei 225 zoomed 239.58 points or 1.96% to 12,460.33, Straits Times added 22.77 points or 0.71% to 3,279.39, KOSPI Composite soared 12.07 points or 0.60% to 1,980.25 and Taiwan Weighted was up by 28.74 points or 0.37% to 7,840.43.