Markets trim early gains despite decisive poll result

After scaling to fresh three-month highs in opening trade, Indian equity markets pared early gains in the late morning session on Wednesday, despite signals of a decisive outcome of the Karnataka state assembly elections. Congress is now leading in 118 seats and set to form the government in Karnataka, without any support. Sensex was up by 15 points, while Nifty was down 0.8 points, amid alternate bouts of buying and selling. However, strong global rally and continuous buying by foreign funds were restricting losses in Indian stocks. In currency market, rupee erased its initial gains and trading lower against greenback on the back of sustained increase in demand for dollar from importers. On the sectoral front, Oil, FMCG and healthcare stocks were trading slightly higher. Capital goods, realty and power stocks were trading weak.

On the global front, Asian shares rose to a two-year high led by strong Chinese trade data and record overnight gains posted by US and German stocks. Japanese shares hit a five-year high on Wednesday, buoyed by a record finish on Wall Street and data showing unexpectedly strong industrial orders for Germany, easing concerns over the euro zone's powerhouse. Back home, the market breadth was favoring positive trend; there were 1,093 shares on the gaining side against 860 shares on the losing side, while 132 shares remain unchanged.

The BSE Sensex is currently trading at 19,904.76, up by 15.81 points or 15.81% after trading in a range of 19,989.64 and 19,880.37. There were 12 stocks advancing against 17 declines on the index and one remains unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.20% and Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were, FMCG up by 0.35%, Oil & Gas up by 0.16%, Consumer Durables up by 0.09%, Health Care up by 0.09% and IT up by 0.03%, while Capital Goods down by 0.88%, Power down by 0.56%, Realty down by 0.33%, Metal down by 0.30% and Bankex down by 0.21% were the top losers on the BSE.

The top gainers on the Sensex were HDFC up by 1.91%, Tata Motors up by 1.86%, Hindustan Unilever up by 1.29%, ONGC up by 0.92% and Coal India up by 0.81%.

On the flip side, Hero MotoCorp  was down by 1.80%, Mahindra & Mahindra was down by 1.62%, Tata Steel was down by 1.22%, L&T was down by 1.18%, and Jindal Steel was down by 1.11% were the top losers on the Sensex.

Meanwhile, the government has cleared 17 foreign direct investment (FDI) proposals with the investment worth around Rs 262.56 crore, including Sanofi-Synthelabo proposal, which was regarding the acquisition of a pharma company through internal accruals and proposes to bring in FDI worth around Rs 180 crore. 

The government’s statement said that following the recommendations of Foreign Investment Promotion Board (FIPB), seven pharmaceutical sector related FDI proposals including Oxford Lifesciences and defence sector proposal of Pipavav Defence and Offshore Engineering Company have been cleared. Whereas decisions on approving FDI proposals of Muthoot Finance Ltd and Euronet Services India to set up ‘white label ATMs' have been delayed.        

India has allowed FDI in most of the sectors through automatic route, but for certain sensitive sectors, FIPB clearance is required. Further, to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. For the April-December period of 2012-13, the FDI inflows have declined by about 42 per cent to $16.94 billion. Lower FDI has put pressure on the country’s of payments and impacted domestic currency. Indian domestic currency depreciated by more than 15 percent in 2012 due to lower FDI inflow.

The CNX Nifty is currently trading at 6,042.75 up by 0.80 points or 0.01% after trading in a range of 6,070.15 and 6,034.45. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Tata Motors up by 1.94%, HDFC up by 1.88%, Lupin up by 1.71%, IndusInd Bank up by 1.46% and HUL up by 1.29%.

On the flip side, Ranbaxy down by 1.96%, NMDC down by 1.96%, Hero MotoCorp down by 1.76%, Tata Steel down by 1.63% and M&M down by 1.62% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.38%, Hang Seng jumped 0.63%, Jakarta Composite increased 0.59%, Nikkei 225 surged 0.74%, Straits Times soared 0.88%, KOSPI Composite up by 0.06% and Taiwan Weighted was up by 1.27%.

On the flip side, KLSE Composite was down by 0.11% was the only loser.