Indian markets trade in narrow range: Marginally in green

Indian markets have pared some of their earlier gains and continue to remain in a narrow range with Sensex and Nifty swinging between negative and positive zone ahead of the June F&O series expiry even as the Asian markets remained mixed. The Indian rupee continued to be under pressure. It opened lower and hit a low of 59.90 before recovering on suspected RBI intervention. Shares found support from the overhaul of rules for foreign investors, including easing registration procedures and simplifying categories, announced by the market regulator on Tuesday. However, the measures are seen as unlikely to spur foreign buying in the short-term, but may help improve sentiments. On the global front, Asian markets too were trading mostly higher at this point of time after the People’s Bank of China (PBOC) said late on Tuesday that it had provided cash to some institutions facing temporary shortages and would continue to do so if required.

Back home, the traders were seen piling up positions in Power, Consumer Durables and IT while selling was seen in Auto, Health Care and Metal sector. In scrip specific actions, Reliance Industries (RIL) rose about a percent on reports that the Cabinet Committee on Economic Affairs (CCEA) will consider a proposal this week for a steep hike in natural gas prices. Strides Arcolab surged after the drug firm said it has received World Health Organisation (WHO) pre- qualification for its anti-malarial tablets and the company will launch the product immediately. ING Vysya Bank rose after the Bangalore-based private lender plans to raise Rs 899 crore under tier-I capital via a qualified institutional placement (QIP) issue. Aditya Birla Nuvo trades higher after the company said it will apply to Reserve Bank of India (RBI) for seeking a bank licence. Bajaj Auto tanked after workers at its Chakan plant have 'stopped coming' to work thereby affecting production following the management's refusal to allot them shares at discounted price.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 5,600 and 18,600 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in ratio of 870:710. The BSE Sensex is currently trading at 18632.92, up by 3.77 points or 0.02% after trading in a range of 18690.50 and 18607.77. There were 16 stocks advancing against 14 declines on the index. The broader indices were trading in mixed note; the BSE Mid cap index was down by 0.06% and Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were, Power up by 0.95%, Consumer Durables up by 0.79%, IT up by 0.76%, Capital Goods up by 0.70% and Oil & Gas up by 0.59% while Auto down by 1.18% Health Care down by 0.24% and Metal down by 0.17% was the losers on the BSE.

The top gainers on the Sensex were Gail India up by 1.78%, NTPC up by 1.74%, Tata Power up by 1.49% L&T up by 1.05%, and TCS up by 1.03%. On the flip side, Bharti Airtel was down by 4.21%, Tata Motors was down by 2.91%, Mahindra & Mahindra was down by 1.40%, Bajaj Auto was down by 1.33% and  Jindal Steel was down by 1.28% were the top losers on the Sensex.

Meanwhile, In a move to restrain the demand of gold and to curb a record high current account gap, the Reserve Bank of India (RBI) has tightened norms for regional rural banks (RRBs) on gold lending and also extended the curbs to units of gold exchange traded funds (ETF) and gold mutual funds. The central bank said that like all other banks, the regional rural banks too cannot lend against gold ornaments, gold jewellery and gold coins weighing above 50 grams.

The RBI has suggested the regional rural banks that, while granting advance against the security of specially minted gold coins sold, they should ensure that the weight of the coin(s) does not exceed 50 grams per customer and the amount of loan to any customer against gold coins, gold ornaments and gold jewellery should be within the Board approved limit. Further, the central bank has also clarified that as per the stipulations of its circular, the restriction on grant of loan against ‘gold bullion’ will also be applicable to grant of advance against units of mutual funds and gold ETFs. 

Recently, the RBI had extended restrictions to all co-operative banks on loans against security of gold coins weighting up to 50 grams per customer. While, in May the RBI imposed restrictions on banks and NBFCs for providing loans against gold coins as well as units of mutual funds and gold ETFs.

Gold import, which is mainly responsible for ballooning CAD, rose sharply after the fall in prices in the international market. India’s gold imports touched 162 tonnes in May, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. Strong demand of gold has become a worrying factor for the Indian policymakers, as the country is facing a record current account deficit (CAD), which widened to 6.7% in the third quarter of FY13.

The CNX Nifty is currently trading at 5,615.20 up by 6.10 points or 0.11% after trading in a range of 5,635.25 and 5,609.00. There were 31 stocks advancing against 18 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Gail up by 2.27%, Axis Bank up by 2.11%, NTPC up by 1.88%, Reliance Infrastructure up by 1.45% and Tata Power up by 1.37%. On the flip side, Bharti Airtel down by 4.25%, Ranbaxy down by 3.07%, Tata Motors down by 2.81%, Kotak Mahindra Bank down by 2.58% and IndusInd Bank down by 1.51% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng surged 244.44 points or 1.23% to 20,100.16, Jakarta Composite soared 125.05 points or 2.83% to 4,543.92, KLSE Composite rose 6.03 points or 0.35% to 1,734.67, Straits Times increased 12.14 points or 0.39% to 3,102.07, KOSPI Composite was up by 3.86 points or 0.22% to 1,784.49 and Taiwan Weighted was up by 147.79 points or 1.93% to 7,811.92.

On the flip side, Shanghai Composite declined by 25.92 points or 1.32% to 1,933.59 and Nikkei 225 dipped 8.58 points or 0.07% to 12,960.76.