Indian markets trade lower in morning deals on Thursday

Deviating from their five days gaining streak, Indian equity benchmarks are trading lower in Thursday’s morning deals with a cut of over half a percent, as sentiments remained dampened after rating agency Crisil cut India’s economic growth estimate to 4.8 percent for the current fiscal and said agriculture is the only hope for higher rate of expansion in this period of downturn. Investors were also staying away from taking positions in risky assets ahead of  IIP data for the month of July to be announced after the market hours, which despite being in contraction mood is likely to come better than last month’s figure of -2.2 percent. Traders were also awaiting consumer price inflation numbers, which too may come marginally lower in August, as compared to 9.64 per cent registered in the month of July.

On the global front, the US markets made a mixed closing overnight after a choppy trading, traders preferred to remain on sidelines with the ongoing uncertainty about the situation in Syria, while most of the Asian equity indices were trading marginally in the green at this point of time awaiting the outcome of the Federal Reserve’s meeting next week and on expectation that the US Federal Reserve’s impending stimulus reduction might be smaller than some had believed.

Back home, investors also shrugged off appreciation in rupee, which gained ground for sixth-straight trading session after the slew of reforms announced by the central bank last week coupled with strong trend in emerging market currencies. The partially convertible rupee was trading at 63.28 per dollar against the yesterday’s close of 63.37 on the Interbank Foreign Exchange. On the sectoral front, realty witnessed the maximum gain in trade followed by power and healthcare, while banking, software and technology remained the top losers on the BSE sectoral space. The broader indices, however, outperformed the benchmarks, while the market breadth on the BSE was positive; there were 830 shares on the gaining side against 385 shares on the losing side while 51 shares remain unchanged.

The BSE Sensex opened at 20046.05; about 48 points higher compared to its previous closing of 19997.45, and has touched a high and a low of 20052.05 and 19876.44 respectively. The index is currently trading at 19886.47, down by 110.98 points or 0.55%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a strong start with 65.56% stocks advancing against 30.41% declines. The broader indices were trading in green; the BSE Mid cap index up by 0.85% and Small cap index up by 0.91%. 

The top gaining sectoral indices on the BSE were, Realty up by 2.71%, Power up by 1.08%, Health Care up by 0.99%, Capital Goods up by 0.54% and PSU up by 0.53%, while Bankex down by 1.22%, IT down by 1.08%, Teck down by 0.90%, Auto down by 0.51% and FMCG down by 0.23% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Power up by 2.42%, Gail India up by 2.15%, Cipla up by 1.74%, Dr Reddys Lab up by 1.65% and NTPC up by 1.13%. On the flip side, Hero MotoCorp was down by 2.82%, ICICI Bank was down by 1.98%, HDFC Bank was down by 1.73%, Hindustan Unilever was down by 1.57% and Sesa Goa was down by 1.38% were the top losers on the Sensex.

Meanwhile, in a move to enhance the inflow of foreign capital into the country, the Reserve Bank of India (RBI) further relaxed norms that would encourage banks to raise funds in overseas market. Under new norms, the RBI allowed bank for swap facility for term deposits in dollar denomination at a concessional rate of 1 percent below the market rate for the period of 1 to 3 years. Banks can now borrow such funds from their head office, overseas branches and correspondents and overdrafts in nostro accounts up to a limit of 100 percent of their unimpaired Tier I capital as at the close of the previous quarter or $10 million, whichever is higher as against the existing limit of 50 percent.

The central bank said in its notification that during swap period a bank can sell dollars in multiples of a million to RBI and would have to buy the same amount of dollars at the end of the swap period. Central bank said that though the swaps would be for the entire tenor of the borrowing, the rate would be reset after every one year from the date of the swap at hundred basis points lower than the market rate prevailing on the date of reset. The concessional swap window shall be open till November 30, 2013. By adding further, RBI said that while the banks are allowed to borrow in any freely convertible currency, the swap will be available only for conversion of US dollar equivalent into rupees, which would be computed at the relevant cross rate prevailing on the date of the swap.

Further, in other amendment to overseas direct investment norms, the RBI has decided that issue of corporate guarantee on behalf of second generation will be considered under the approval route and on basis of current market conditions relating to excessive volatility in yields of government securities, the central bank has decided to increase the quantum of Held to Maturity (HTM) securities from 100 percent to 200 percent of the audited net owned fund of the bank as at end March.

The CNX Nifty opened at 5,931.15; about 18 points higher as compared to its previous closing of 5,913.15, and has touched a high and a low of 5,932.00 and 5,879.85 respectively. The index is currently trading at 5,881.75, down by 31.40points or 0.53%. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were IDFC up by 5.09%, Tata Power up by 3.60%, DLF up by 2.95%, Ranbaxy up by 2.73% and Gail up by 2.36%. On the flip side, JP Associate down by 3.69%, Hero MotoCorp down by 3.03%, ICICI Bank down by 2.17%, HDFC Bank down by 2.13% and TCS down by 1.64% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite was up 2.11 points or 0.09% to 2,243.37, Hang Seng jumped 55.90 points or 0.24% to 22,993.04, Jakarta Composite strengthened 16.34 points or 0.38% to 4,365.76, KLSE Composite increased 3.69 points or 0.21% to 1,772.17, Straits Times surged 16.79 points or 0.54% to 3,124.98, Seoul Composite added 4.80 points or 0.24% to 2,008.65 and Taiwan Weighted was up by 12.45 points or 0.15% to 8,221.44.

On the flip side, Nikkei 225 was down by 12.23 points or 0.08% to 14,412.84.