Benchmarks erases initial losses; moves northward

Key benchmarks have pared their initial losses and are back in the positive territory in late morning session, led by gains in beaten down auto, realty and banks sector. The rate sensitives stocks have recently been under pressure on rate hike concerns. The Reserve Bank of India will hold its policy meet on July 30 and there are worries that the central bank may hike interest rates due to weak rupee and inflationary pressure. Meanwhile, foreign institutional investors bought rs 2.52 billion of cash shares on Friday after being net sellers in each of the previous four sessions in the week for a total of Rs 6.04 billion.

On the global front, most of the Asian equity indices were trading in green at this point of time with Japanese Nikkei struggling to remain in green, as an initial rally sparked by Prime Minister Shinzo Abe’s big election win over the weekend fizzled with profit taking that emerged after the yen bounced off lows. Back home, the traders were seen piling up positions in Auto, Banking and Realty, while selling was seen in Oil & Gas, Consumer Durables and Power sector.

Meanwhile, the NSE Nifty and BSE Sensex were trading near the psychological 6,000 and 20,000 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in the ratio of 950:653. The BSE Sensex is currently trading at 20181.09, up by 31.24 points or 0.16% after trading in a range of 20209.69 and 20065.69. There were 17 stocks advancing against 13 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.63% and Small cap index gained 0.29%.

The top gaining sectoral indices on the BSE were, Auto up by 1.18%, Bankex up by 0.82%, Realty up by 0.67%, Metal up by 0.04% and FMCG up by 0.03%, while Oil & Gas down by 1.15%, Consumer Durables down by 0.96%, Power down by 0.26%, PSU down by 0.18% and Health Care down by 0.12%were the top losers on the BSE.

The top gainers on the Sensex were HDFC up by 2.43%, Mahindra & Mahindra up by 1.48%, Bajaj Auto up by 1.47%, Tata Motors up by 1.32% and Hero MotoCorp up by 1.29% .On the flip side, BHEL was down by 3.71%, RIL was down by 1.73%, Gail India was down by 1.38%, Tata Steel was down by 1.24%, and ONGC was down by 1.15% were the top losers on the Sensex.

Meanwhile, market regulator Securities and Exchange Board of India (SEBI) will conduct an auction on Monday for the grant of investment limits to foreign investors in government debt securities, marking second auction for debt securities since a hike last month in the investment limits for FIIs in government debt to $30 billion, from $25 billion previously. Post this, foreign institutional investors (FIIs) at the auction, to be held on the National Stock Exchange (NSE), would be able to bid for investment limits of Rs 23,661 crore in government bonds.

This development comes on the heels of previous month’s auction for grant of investment limits to foreign investors in government debt securities worth over Rs 42,000 crore by SEBI, which turned out to be the biggest sale of G-Secs so far this year. The auction had attracted bids worth Rs 39,171 crore, with a total of 37 FIIs participating in the auction. As a matter of fact, the Indian debt markets had witnessed robust interest from FIIs last year as well, when their net investments stood at close to Rs 35,000 crore.

Meanwhile, the Reserve Bank of India has asked SEBI to further tighten the trading norms for currency derivatives, a move that the capital market regulator has resisted so far. Consequently, SEBI has urged the exchanges to collect details about trading activities of all their members for new clients in the currency derivatives segment. Besides, some reports also suggested that the exchanges have also been asked to keep a check on any shift in market positions of the existing clients. RBI, along with the government and SEBI, has undertaken a number of steps to check the volatility of the rupee, which went into a tailspin after Federal Reserve Chairman Ben Bernanke indicated that the quantitative easing programme could be tapered later in the year.

The CNX Nifty is currently trading at 6,038.40 up by 9.20 points or 0.15% after trading in a range of 6,048.10 and 6,004.25. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were HDFC up by 2.56%, Bank of Baroda up by 2.00%, IndusInd Bank up by 1.91%, M&M up by 1.71 %, Bank of Baroda up by 2.00%, Bajaj-Auto up by 1.58%. On the flip side, BHEL down by 3.74%, Ambuja Cements down by 3.67%, ACC down by 2.30%, Reliance down by 1.76% and Ranbaxy down by 1.51% were the major losers on the index.

The most of Asian equity indices were trading in green; KLSE Composite rose 1.80 points or 0.10% to 1,799.54, Straits Times increased 14.28 points or 0.44% to 3,227.54, Seoul Composite added 10.85 points or 0.58% to 1,882.64, Taiwan Weighted was up by 47.49 points or 0.59% to 8,109.52 and Nikkei 225 was up by 28.02 points or 0.19% to 14,617.93.

On the flip side, Shanghai Composite declined by 5.64 points or 0.28% to 1,987.01, Hang Seng dropped 12.75 points or 0.06% to 21,349.67 and  Jakarta Composite contracted 26.97points or 0.57% to 4,697.44.