Markets extend losses in afternoon trade

Indian equity benchmarks extended their losses in the afternoon session amid selling in banking, IT and metals stocks, as investors remained cautious ahead of key macro economic data including July factory data and August retail inflation, to be released later in the day. Sentiments also remained pessimistic after credit ratings agency Crisil cut India's economic growth estimate to 4.8 percent for the current fiscal 2013-14 from its earlier estimate of 5.5 percent. IT stocks continue to remain under pressure on on account of recovery in Rupee against the dollar. Selling was also witnessed in auto, finance and PSU stocks. On stock specific movement, Tata Power and NTPC were trading up by over 2 percent; while, ICICI Bank, Sesa Goa and Hero Moto Corp were trading over 2 percent lower on BSE. The market breadth remained positive, out of 2,041 stocks traded, 1,104 stocks advanced, while 803 stocks declined on the BSE. On global front, Asian equity indices mainly traded in green, while, Japanese index Nikkei 225 was down as the stronger yen hit exporters.

The BSE Sensex is currently trading at 19,848.27 down by 149.18 points or 0.75% after trading in a range of 20,052.05 and 19,822.36. There were only 9 stocks advancing against 21 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index gained 0.77%.

The top gaining sectoral indices on the BSE were, Realty up by 2.51%, Power up by 1.10%, Healthcare up by 0.67%, and Capital Goods up by 0.24%. While, Bankex down by 1.77%, IT down by 1.33%, Consumer Durables down by 1.12% and Metal down by 1.10 were the losing indices on BSE.

The top gainers on the Sensex were, Tata Power up by 4.43%, Gail India up by 2.35%, NTPC up by 1.63%, Dr. Reddys Lab up by 1.48% and Cipla up by 1.39%. On the flip side, ICICI Bank down by 2.39%, Sesa Goa down by 2.34%, Hero Moto Corp down by 2.20%, Coal India down by 2.13% and HDFC Bank down by 1.87% were the only losers on the Sensex.

Meanwhile, in a move to enhance the overseas investment into the country, the government has notified changes in the Foreign Direct Investment (FDI) policy, widening the definition of the term 'control' for mergers and acquisitions involving overseas companies, a move that will provide more clarity to foreign investors and would also prevent backdoor entry of foreign companies in the prohibited sectors. The notification will have to be tabled in Parliament within 30 days of the commencement of the next session.

As per the revised FDI guidelines, the government had relaxed norms for multi-brand retail trading and eased the mandatory 30 per cent local sourcing norms for companies. The government is of the view that the move will help to enhance the FDI into the country. Meanwhile, FDI increased to $9 billion in April-June quarter from $5 billion in the same period of FY13.The foreign direct investment (FDI) policy is now notified under FEMA regulations and is effective from August 22.

The new definition of control will include the right to appoint majority of directors and will also be expanded to include control over the management or policy decisions, instead of just the right to appoint majority of the shareholders. Presently, a company is said to be controlled by an Indian resident if the Indian investor holds more than 51% stake and can appoint the majority directors in the firm. As per the new guidelines, an Indian company will be considered a foreign entity if the major stake in the firm is held by foreign investors or is foreign controlled and any investment by such a company will also be considered as foreign investment.

The CNX Nifty is currently trading at 5,876.05 down by 37.10 points or 0.63% after trading in a range of 5,932.00 and 5,861.40. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were IDFC up by 7.32%, Tata Power up by 5.77%, Ranbaxy up by 4.26%, Gail up by 2.55% and DLF up by 2.29%. On the flip side, JP Associate down by 6.34%, Indusin Bank down by 2.95%, Ambuja Cemnet down by 2.93%, ICICI Bank down by 2.36% and Sesa Goa down by 2.23% were the major losers on the index.

The Asian equity indices were trading in green; Seoul Composite up by 0.01%, KLSE Composite up by 0.16%, Shanghai Composite up by 0.75%, Taiwan Weighted up by 0.20%,  Jakarta Composite up by 0.02%, Straits Times up by 0.51% and Hang Seng up by 0.28%. While, Nikkei 225 was down by 0.26%.