Indian markets trade in red on profit-booking

Indian equity benchmarks have made a negative start as investors opted to book their profit garnered in last few sessions. Global risk appetite too remained cautious as investors awaited US ADP due later this session, followed by Thursday’s latest weekly jobless claims. Asian equity indices after a quiet start were trading cautiously at this point of time ahead of key US jobs data, news from central bank policy meetings in Japan and Europe later in the week. Back home, sentiments also got dampened after sugar stocks like Balrampur Chini, Shree Renuka Sugar, Bajaj Hindusthan, and Triveni Engineering gave up their previous session’s gains as the Cabinet Committee on Economic Affairs (CCEA) on Tuesday did not take up the proposal to decontrol the sugar sector, as Finance Minister P Chidambaram is away on a foreign tour.

However, some support to the domestic markets came in with the Finance Ministry notifying an eight-member panel under Economic Affairs Secretary Arvind Mayaram for giving clear definitions to FDI and FII, a move aimed at removing ambiguity in the types of foreign investments. On the sectoral front, power witnessed the maximum gain in trade followed by healthcare and realty while, fast moving consumer goods, auto and technology remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 1,329 shares on the gaining side against 552 shares on the losing side while 66 shares remain unchanged.

The BSE Sensex opened at 19,034.00; about 6 points lower compared to its previous closing of 19,040.95, and has touched a high and a low of 19,035.20 and 18,960.39 respectively.

The index is currently trading at 19,006.32, down by 34.63 points or 0.18%. There were 11 stocks advancing against 19 declines on the index.

The overall market breadth has made a strong start with 68.26% stocks advancing against 28.35% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices were up by 0.56% and 0.94% respectively. 

The top gaining sectoral indices on the BSE were, Power up by 2.08%, Health Care up by 0.85%, Realty up by 0.63%, Metal up by 0.37% and Consumer Durables up by 0.32% while, FMCG down by 0.67%, Auto down by 0.38%, Teck down by 0.33%, IT down by 0.26% and Oil & Gas down by 0.22% were the only losers on the sectoral index.

The top gainers on the Sensex were Tata Power up by 5.45%, Jindal Steel up by 2.46%, Sun Pharma up by 2.37%, BHEL up by 1.68% and Cipla up by 1.35%.

On the flip side, Bharti Airtel was down by 2.19%, HDFC was down by 2.19%, Hindustan Unilever was down by 1.15%, Tata Motors was down by 0.96% and ONGC was down by 0.90% were the top losers on the Sensex.

Meanwhile, in a move to attract more foreign inflows to fund the widening current account deficit (CAD), the Reserve Bank of India (RBI) rationalized FII investment in bonds, including government securities (G-Secs) by doing away with various categories. The central bank in a notification said ‘to simplify the existing limits, it has now been decided to merge the existing debt limits into two broad categories.’

Among the two broad categories, the first category will consist of G-Secs of $25 billion which merges $10 billion for investment limit in short-term government papers, including treasury Bills, and $15 billion for long-term government papers. While, the second category consists of the corporate debt with a limit of $51 billion, including a sub-limit of $25 billion each for bonds of infrastructure sector and non-infrastructure sector, and $1 billion for Qualified Foreign Investors (QFIs) in non-infrastructure sector. The above changes will come into effect from April 1, 2013.

Meanwhile, the eligible investors for these two categories are FIIs, QFIs and long terms investors registered with SEBI-Sovereign Wealth Funds (SWFs), pension and insurance, multilateral agencies and central banks of other countries. For the G-Secs category, eligible investors may invest in treasury bills only up to $5.5 billion within the limit of $25 billion. In the other category, investors may invest in commercial papers only up to $3.5 billion within the limit of $51 billion. The Non-Resident Indians are not subject to any limit for investment in government securities as well as corporate debt and will continue to be regulated as per existing guidelines.

As per Finance Minister P Chidambaram, CAD can be financed only through foreign inflows. Hit by high gold and petrol imports and slowdown in exports, current account deficit widened to a record high of 6.7% in October-December period of 2012-13.

The CNX Nifty opened at 5,740.20; about 8 points lower as compared to its previous closing of 5,748.10, and has touched a high and a low of 5,743.85 and 5,726.00 respectively.

The index is currently trading at 5,735.10, down by 13.00 points or 0.23%. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Tata Power up by 5.51%, Sun Pharma up by 2.40%, Reliance Infrastructure up by 2.09%, Jindal Steel & Power up by 1.88% and BHEL up by 1.54%.

On the flip side, Bharti Airtel down by 2.12%, Bank of Baroda down by 1.64%, HDFC down by 1.37%, Hindustan Unilever down by 1.33% and Tata Motors down by 1.16%, were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng dropped 58.00 points or 0.26% to 22,309.82, Jakarta Composite dipped 6.71 points or 0.14% to 4,950.54, KLSE Composite declined 13.51 points or 0.80% to 1,671.49, Straits Times slipped by 0.18 points or 0.01% to 3,317.41 and KOSPI Composite was down by 8.68 points or 0.44% to 1,977.47. 

On the flip side, Shanghai Composite rose 3.09 points or 0.14% to 2,230.83, Taiwan Weighted increased 17.54 points or 0.22% to 7,930.72 and Nikkei 225 was up by 236.11 points or 1.97% to 12,239.54.