Benchmarks extend southbound journey in early deals

Extending their southbound journey for the fourth straight day, Indian equity indices have made a negative start on the back of weak global cues. The US markets ended lower overnight led by uncertainties on the outlook for the Federal Reserve’s asset purchase program. Asian markets too were trading mostly in red at this point of time on weak US cues; the Japanese market too was trading in red ahead of Prime Minister Shinzo Abe’s speech on his economic-growth strategy; however the losses remain capped after dollar’s rebound above 100 yen.

Back home, shares of real estate companies were down in early trade on stringent penalties in the Realty Bill aimed at organising and monitoring the sector. Some pressure was also witnessed in cement stocks as cement prices have eased and concerns over slowdown in demand following the onset of monsoon rains. However, the losses remain capped as some support came in from Chief economic advisor Raghuram Rajan’s statement that despite the disappointing GDP growth there was enough in the details to give hope that economy will look up. He expressed hopes on good rabi crop that will come to market in the first quarter, higher government spending and strong finance, real estate and insurance sector. Just Dial, the new listing too got good response from traders and was trading with a premium of over 14 per cent.

On the sectoral front, oil and gas witnessed the maximum gain in trade followed by metal and auto while, fast moving consumer goods, technology and software remained the top losers on the BSE sectoral space. The broader indices, however, were trading with traction while, the market breadth on the BSE was negative; there were 607 shares on the gaining side against 621 shares on the losing side while 57 shares remain unchanged.

The BSE Sensex opened at 19,532.42; about 13 points lower compared to its previous closing of 19,545.78, and has touched a high and a low of 19,533.40 and 19,441.35 respectively. The index is currently trading at 19,506.97, down by 38.81 points or 0.20%. There were 15 stocks advancing against 15 declines on the index.

The overall market breadth has made a weak start with 47.24% stocks advancing against 48.33% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices up by 0.12% and 0.01% respectively. 

The top gaining sectoral indices on the BSE were, Oil & Gas up by 0.62%, Metal up by 0.36%, Auto up by 0.26%, Consumer Durables up by 0.08% and PSU up by 0.04% while, FMCG down by 0.83%, Teck down by 0.50%, IT down by 0.49%, Power down by 0.22% and Realty down by 0.18% were the only losers on the sectoral index.

The top gainers on the Sensex were Maruti Suzuki up by 1.43%, Hindalco Industries up by 1.04%, Tata Steel up by 1.01%, RIL up by 0.94% and Mahindra & Mahindra up by 0.90%.

On the flip side, ITC was down by 1.41%, Coal India was down by 1.08%, Bajaj Auto was down by 0.96%, Cipla was down by 0.85% and HDFC was down by 0.82% were the top losers on the Sensex.

Meanwhile, disappointing the corporate aspiring for banking licences, the Reserve Bank of India (RBI) said it will look for very high quality applications to issue new bank permits and may not be possible to issue licences to all eligible applicants. Further, on timeline for granting in-principle approval for bank licence, RBI said, it will not be possible to indicate the timeline for grant of in-principle approvals at this stage. Applicants have to submit their applications by July 1 for evaluation to get new bank licences.

The central bank, which had issued final guidelines for issuing new banking licences on February, came up with clarifications to various queries. The RBI has extended the validity of in-principle licence nod from 12 months to 18 months and clarified that the companies which would be eligible to apply must have a public shareholding of at least 51 per cent.

Besides this, the intending applicants would have to approach other regulators to bring in entities regulated by them under the bank holding company. The RBI’s notification further said that only non-financial services companies and non-operative financial holding companies in the promoter Group would be allowed to hold shares in the holding company.

Further, the central bank added that it has received 443 queries from 34 individuals/organizations and most of the queries it received pertained to provisions on eligible promoters, 'fit and proper' criteria, foreign shareholding, regulatory requirements, on transition time to the new structure and corporate structure of the NOFHC among others. 

The CNX Nifty opened at 5,908.30; about 11 points lower as compared to its previous closing of 5,919.45, and has touched a high and a low of 5,915.65 and 5,883.70 respectively.

The index is currently trading at 5,904.30, down by 15.15 points or 0.26%. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 1.60%, Hindalco Industries up by 1.39%, Reliance Industries up by 1.09%, Tata Steel up by 0.82% and M&M up by 0.73%.

On the flip side, ACC down by 1.94%, UltraTech Cement down by 1.70%, Ambuja Cements down by 1.52%, ITC down by 1.38% and HCL Technologies down by 1.31% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite slipped 3.47 points or 0.15% to 2,268.95, Hang Seng declined 182.33 points or 0.82% to 22,103.19, Jakarta Composite dropped 41.38 points or 0.82% to 4,980.23, Nikkei 225 decreased 55.15 points or 0.41% to 13,478.61, KLSE Composite dipped 0.25 points or 0.01% to 1,776.49, Straits Times contracted 24.19 or 0.73% to 3,267.16 and KOSPI Composite was down by 19.86 points or 1.00% to 1,969.65.

On the flip side, Taiwan Weighted was up by 12.85 points or 0.16% to 8,204.07.