Bourses trim some gains in late afternoon session

Indian equity markets trimmed some of their gains in late afternoon session but continued to trade in green led by gains in banking sector. Investors continued to take support as India’s services sector activity improved during the month of June amid a stronger rise in new orders and an unprecedented expansion in international sales. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index rose to 60.5 in June from 60.2 in May. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 60.9 in June as against 60.5 in May. On the global front, Asian markets were trading mostly in green following fresh records on Wall Street after Federal Reserve chief Jerome Powell fanned hopes of an interest rate cut by saying the battle against inflation had made ‘progress’ and the job market was cooling. European markets were trading higher as investors welcomed dovish comments from Federal Reserve Chair Jerome Powell and looked ahead to the second round of the French vote and national elections in the UK.

The BSE Sensex is currently trading at 79877.76, up by 436.31 points or 0.55% after trading in a range of 79754.95 and 80074.30. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.48%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Bankex up by 1.76%, PSU up by 1.30%, Telecom up by 1.20%, Industrials up by 0.75% and Capital Goods was up by 0.66%, while Oil & Gas down by 0.35%, Consumer Durables down by 0.28%, Realty down by 0.27%, Energy down by 0.20% and Consumer Discretionary was down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.43%, HDFC Bank up by 2.10%, SBI up by 1.83%, Kotak Mahindra Bank up by 1.70% and JSW Steel up by 1.49%. On the flip side, Titan Company down by 1.52%, Reliance Industries down by 1.39%, TCS down by 1.38%, Tata Motors down by 0.51% and Larsen & Toubro down by 0.10% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that the Securities and Exchange Board of India’s (SEBI) recent regulations for small and medium real estate investment trusts (SM REITs) are likely to drive investor interest towards fractional ownership of real estate assets. It said by enabling strong investor protection, these regulations are expected to broaden investor base. Prudent management of operational risks remains key to popularising the vehicle, though.  

The report said so far, fractional ownership platforms (FOPs) did not follow uniform guidelines. The SEBI move is intended to address this by bringing existing FOPs under the regulatory ambit. Some of the key regulatory guardrails are mandatory investments in operational assets, restrictions on related party transactions, compulsory listing on the stock exchange and distribution of minimum 95% surplus from special purpose vehicles. Other regulations include the need for at least 200 retail investors which will provide liquidity. Minimum liquidity requirement at the investment manager (IM) level to provide a buffer against temporary mismatches. Further, experience-linked eligibility criteria for the IM will foster strong governance.

As per CRISIL Ratings' assessment, SM REITs target a distinct and differentiated market as compared to conventional REITs. Schemes under SM REITs can target niche assets ranging from Rs 50 crore to Rs 500 crore which is an untapped opportunity as conventional REITs focus on large scale assets with consolidated asset value over Rs 500 crore. Investment in SM REITs is similar to the traditional form of ownership of real estate assets, with the difference being pooling investor money for fractional ownership under a trust structure. SM REITs will float different schemes under a trust, each of which will specify assets to be invested in. Investors can pick schemes that are better aligned with their philosophy of investing in a certain micro-market or asset type. Each scheme will be ring-fenced from other schemes under the SM REIT. Contrary to this, the conventional REIT structure enables investors to invest in an identified pool of assets, which may be dynamic, depending on the REIT strategy.

The CNX Nifty is currently trading at 24252.55, up by 128.70 points or 0.53% after trading in a range of 24207.10 and 24307.25. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Tata Consumer up by 3.43%, Axis Bank up by 2.50%, HDFC Bank up by 2.07%, SBI up by 1.86% and Kotak Mahindra Bank up by 1.72%. On the flip side, Titan Company down by 1.53%, TCS down by 1.42%, Reliance Industries down by 1.30%, Divi's Lab down by 0.73% and Tata Motors down by 0.55% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 506.07 points or 1.25% to 40,580.76, Taiwan Weighted added 293.06 points or 1.26% to 23,172.43, Hang Seng advanced 209.43 points or 1.16% to 17,978.57, Jakarta Composite gained 57.88 points or 0.81% to 7,183.02, Straits Times rose 39.18 points or 1.16% to 3,407.08 and KOSPI was up by 13.15 points or 0.47% to 2,794.01. On the flip side, Shanghai Composite was down by 14.63 points or 0.49% to 2,982.38.

European markets were trading higher; UK’s FTSE 100 increased 39.13 points or 0.48% to 8,160.33, France’s CAC rose 77.87 points or 1.03% to 7,616.16 and Germany’s DAX was up by 124.66 points or 0.69% to 18,288.72.