Indian benchmarks make a negative start on profit booking

Indian equity benchmarks have started the new F&O new on a negative note as investors booked profits in rate-sensitive sectors such as banks, automobiles after four consecutive sessions of gains. The sentiments remained subdued as investors opted to remain on the side-lines ahead of the Reserve Bank of India’s monetary policy meet next week. However, the losses remained capped as investors got some relief after data showed that Foreign Institutional Investors’ net buying was of Rs 1450 crore worth of shares on April 25, 2013. Some encouragement also came in with government pitching for a rating upgrade at a meeting with ratings agency Standard & Poor’s. Officials arguing that the outlook should be changed and the country deserved an upgrade for actions taken by the government to put finances in order and bolster investor confidence.

However, global risk appetite was firm on hopes that major central banks will ease monetary policy further or continue to keep it loose for long. The US markets recovered from the consolidation mood overnight and all the major indices closed modestly higher on some latest earnings reports as well as some upbeat employment data. Asian markets were trading mostly in the green at this point of time with Japanese Nikkei stock average surging about half a percent higher in early deals, after hitting its highest since June 2008 on Thursday, ahead of the Bank of Japan’s meeting today.

Back home, on the sectoral front, realty witnessed the maximum gain in trade followed by consumer durables and metal while, software, banking and fast moving consumer goods 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 644 shares on the gaining side against 619 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex opened at 19,376.00; about 30 points lower compared to its previous closing of 19,406.85, and has touched a high and a low of 19,384.95 and 19,317.71 respectively.

The index is currently trading at 19,346.87, down by 59.98 points or 0.31%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a strong start with 48.24 % stocks advancing against 46.37 % declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices up by 0.13% and 0.21% respectively. 

The top gaining sectoral indices on the BSE were, Realty up by 0.52%, Consumer Durables up by 0.42%, Metal up by 0.31%, Capital Goods up by 0.20% and Oil & Gas up by 0.01% while, IT down by 1.11%, Bankex down by 1.06%, FMCG down by 0.47%, Health Care down by 0.43% and Power down by 0.28% were the top losers on the sectoral index.

The top gainers on the Sensex were Bharti Airtel up by 4.42%, Gail India up by 1.47%, Sterlite Industries up by 1.38%, Tata Motors up by 1.18% and L&T up by 1.10%.

On the flip side, Jindal Steel was down by 2.63%, Hero MotoCorp was down by 2.12%, ICICI Bank was down by 1.94%, TCS  was down by 1.93% and Mahindra & Mahindra was down by 1.59% were the top losers on the Sensex.

Meanwhile, in order to prevent the misuses of foreign investors’ funds, the Reserve Bank of India has proposed that inflow of foreign funds to the Indian entity should be allowed only through escrow mechanism. According to the RBI's proposal, Indian investee companies would be required to open an escrow account with bank rather than directly remitting to the account of investee company and funds shall be released by bank from this account in accordance with the terms of escrow arrangement.

The issue was recently discussed at a high-level meeting headed by the Department of Economic Affairs (DEA) secretary Arvind Mayaram, which was also attended by DIPP Secretary Saurabh Chandra, Chief Economic Advisor Raghuram Rajan and RBI officials. The central bank argued that that the misuse can be checked if usage of money is allowed only after issuance of shares. In the meeting the proposal was accepted and was said that the RBI may flesh out the proposal and forward it with a draft notification for consideration and approval.

The foreign direct investment (FDI) in India declined by 19 percent in February, 2013 to $ 1.79 billion from the $ 2.15 billion recorded in the same month of previous year, owing to the prevailing global economic slowdown. Foreign investment is considered crucial for economic development of a country and the decline in foreign investments could put pressure on the country’s balance of payments and may also impact the value of the rupee.

The CNX Nifty opened at 5,899.75; about 16 points lower as compared to its previous closing of 5,916.30, and has touched a high and a low of 5,907.05 and 5,883.10 respectively.

The index is currently trading at 5,891.40, down by 24.90 points or 0.42%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 4.62%, Gail up by 1.80%, Asian Paints up by 1.54%, Reliance Infrastructure up by 1.35% and Tata Motors up by 1.06%.

On the flip side, HCL Tech down by 3.00%, Jindal Steel & Power down by 2.76%, TCS down by 1.98%, ICICI Bank down by 1.97% and Hero MotoCorp down by 1.93%, were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng surged by 197.80 points or 0.88% to 22,599.04, Jakarta Composite increased 3.99 points or 0.08% to 4,998.52, KLSE Composite rose 9.61 points or 0.56% to 1,715.95, Nikkei 225 jumped 42.90 points or 0.31% to 13,968.98, Straits Times added 6.70 points or 0.20% to 3,344.41 and Taiwan Weighted was up by 27.80 points or 0.35% to 8,049.55.

On the flip side, Shanghai Composite declined 10.86 points or 0.49% to 2,188.45 and KOSPI Composite was down by 3.88 points or 0.20% to 1,947.72.