Weakness persists in markets amid volatility

Following a positive opening and subsequent retreat, Indian equity markets continued trading in negative territory in late morning session on Tuesday amid alternate bouts of buying and selling. The Sensex was down 49.23 points, while Nifty down by 20.40 points. Investors remained cautious amid lack of triggers. In currency market, Indian rupee pared some early gains but continued trading positive against greenback amid increasing selling of US currency by banks and exporters. On the sectoral front, oil stocks reacted positively to the Oil Ministry’s Cabinet note to raise the price of natural gas produced by state-owned as well as private firms. Capital goods stocks were sluggish today, after last week’s rally on hopes of a recovery in the capex cycle, and partly on speculation that some of the MNC names in the sector would delist. On scrip specific movement, Coal India was trading higher by over 2% on the back of strong quarterly results, while Voltas was down sharply following decline in the company's fourth-quarter consolidated profit.

On the global front, Asian stock markets were trading mixed as the overnight weak close on Wall Street was weighing on sentiment to an extent. Also, following recent strong up move, investors appear a bit reluctant to indulge in any aggressive buying for now. Back home, the market breadth was favoring negative trend; there were 761 shares on the gaining side against 1,154 shares on the losing side, while 130 shares remain unchanged.

The BSE Sensex is currently trading at 20,174.75, down by 49.23 points or 0.24% after trading in a range of 20,288.76 and 20,141.32. There were 13 stocks advancing against 17 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.27% and Small cap index was down by 0.31%.

The top gaining sectoral indices on the BSE were, IT up by 0.64%, Consumer durables up by 0.59%, Teck up by 0.47% and Oil & Gas up by 0.03%, while Realty down by 1.47%, Auto down by 1.39%, Power down by 0.75%, FMCG down by 0.66%, Capital Goods down by 0.56% were the  losers on the on the BSE.

The top gainers on the Sensex were Coal India up by 2.09%, BHEL up by 1.71%, Hindalco up by 1.18%, Sun Pharma up by 1.02% and TCS up by 0.96%.

On the flip side, NTPC was down by 2.42%, Tata Motors was down by 2.30%, Mahindra & Mahindra was down by 2.05% , Maruti Suzuki was down by 1.66% and Sterlite Industries was down by 1.65% were the top losers on the Sensex.

Meanwhile, the government is planning to allow global retailers such as Walmart and Tesco to set up warehouses, cold storages and source products from small and medium enterprises (SME) in states which have not permitted FDI in the multi-brand retail sector. As per the proposal, no state will stop any foreign player to procure goods or do business with SMEs.

Global retailer players have sought clarifications from the Department of Industrial Policy and Promotion (DIPP) on whether they could set up warehouses in states which are against the Centre’s retail FDI policy.  As per the government FDI policy, 50 per cent of first tranche of the mandatory minimum $100 million FDI would only have to be invested in the back-end infrastructure and not in buying land, existing building or rent. Further a foreign retailer must source 30 per cent of the items that it sells in India from small industries.

However, certain issues were raised by the foreign retailers regarding these provisions. Meanwhile, the Department of Industry Policy and Promotion (DIPP) would soon issue clarifications on issues raised by the retailers. The government has permitted 51 per cent FDI in multi-brand retail. 

The CNX Nifty is currently trading at 6,136.50 down by 20.40 points or 0.33% after trading in a range of 6,173.10 and 6,124.70. There were 18 stocks advancing against 32 declines on the index.

The top gainers of the Nifty were Coal India up by 2.07%, BHEL up by 1.61%, TCS up by 1.36%, HCL Tech up by 1.26% and Sun Pharma up by 1.20%.

On the flip side, NTPC down by 2.85%, UltraTech Cement down by 2.82%, JP Associate down by 2.69%, Reliance Infra down by 2.23% and Tata Motors down by 2.22% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined 0.45%, Jakarta Composite dropped 0.56%, Straits Times contracted 0.58% and KOSPI Composite decreased 0.07%.

On the flip side, Shanghai Composite up by 0.04%, Nikkei 225 up by 0.13%, KLSE Composite was up 0.39% and Taiwan Weighted up by 0.07%.