Benchmarks prolong weak trade; Power, Bankex drag

Indian equity markets pared gains to continue weak lackadaisical trade in the late afternoon session on account of selling in front line counters and taking cues from global counterparts. The sentiments were on cautious note as a survey released showed that India Inc.’s self confidence has slipped from a year ago to a four-year low, as Asia’s third largest economy struggles to raise slow growth and businesses try to cope with a weak rupee. Traders were seen piling positions in IT, TECK and Metal stocks, while selling was witnessed in Power, Bankex and PSU sector stocks. In scrip specific development, Denso (India) was trading firm after touching 5-year high as the voluntary delisting offer from its parent company Denso Corporation has begun today. Gold loan financing companies like Muthoot Finance and Manappuram Finance were trading under pressure after the Reserve Bank of India (RBI) notified new norms for these companies on September 16. As per the new norm, gold loan financing companies should have appropriate infrastructure for storage of gold ornaments. Reliance Broadcast Network is locked at upper circuit limit after the company stated that its board will consider delisting of equity shares of the company from the stock exchanges in its meeting tomorrow.

On the global front, all the Asian markets barring KLSE Composite and Straits Times ended in red , while the European markets were too trading on pessimistic note.  Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,850 and 19,800 levels respectively. The market breadth on BSE was negative in the ratio of 909:1209, while 135 scrips remained unchanged. 

The BSE Sensex is currently trading at 19730.57 down by 11.90 points or 0.06% after trading in a range of 19809.28 and 19635.44. There were only 15 stocks advancing against 15 declines on the index.

The broader indices were too trading in red; the BSE Mid cap index was down by 0.40%, while Small cap index down by 0.22%.

The top gaining sectoral indices on the BSE were, IT up by 1.29%, TECK up by 1.03%, Metal up by 0.86%, Auto up by 0.57% and FMCG up by 0.46% while, Power down by 1.18%, Bankex down by 1.01%, PSU down by 0.95%, Capital Goods down by 0.87% and Consumer Durable down by 0.86% were the top losing indices on BSE.

The top gainers on the Sensex were, Wipro up by 4.21%, Dr. Reddy’s Lab up by 4.02%, Sesa Goa up by 2.37%, Jindal Steel up by 1.20% and Maruti Suzuki up by 1.18%. On the flip side, Sun Pharma down by 3.34%, ONGC down by 3.14%, NTPC down by 2.27%, HDFC down by 1.81% and Hero Moto Corp down by 1.21% were the top losers on the Sensex.

Meanwhile, the Department of Industrial Policy & Promotion (DIPP), the nodal ministry for the foreign direct investment (FDI) policy, has circulated a draft Cabinet note for relaxing foreign direct investment (FDI) norms for the housing sector with an objective to attract more foreign investment into the sector and provide houses at affordable prices to the people.

The draft note proposed easing the three-year lock-in period for FDI in housing and townships, and also sought reduction in the minimum capitalization to $5 million from the present $10 million for wholly-owned subsidiaries. Under the present FDI policy, the lock-in period of three years applies to every tranche of investment brought in by a foreign player from the date of receipt or from the date of 'completion' of minimum capitalization whichever is later. Further, the note has also suggested a cut in the minimum built-up area to 20,000 sq mts from 50,000 sq mts in case of construction development projects of carpet area for FDI. Meanwhile, despite allowing 100 percent foreign direct investment in townships, housing and built-up infrastructure and construction developments, the government has also imposed conditions on it.

Now, the DIPP has sought views on this proposal from various ministries including finance, home affairs ministries and the planning commission. During the period from April 2000 to June 2013, construction development sector including townships, housing and built-up infrastructure, has received FDI worth $22.24 billion, which was 11 per cent of the total FDI attracted by India during the period. Meanwhile, in April-June period of this fiscal, overall FDI in the country stood at $5.39 billion.  

The CNX Nifty is currently trading at 5,831.25 up by 9.30 points or 0.16% after trading in a range of 5,853.95 and 5,804.90. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were Dr. Reddy’s Lab up by 4.04%, Ranbaxy up by 3.61%, HCL Tech up by 3.31%, UltraTech Cement up by 3.30% and Sesa Goa up by 2.40%. On the flip side, Sun Pharmaceuticals down by 3.71%, Bank of Baroda down by 3.65%, ONGC down by 3.55%, Axis Bank down by 3.54% and IndusInd Bank down by 3.41% were the major losers on the index.

Most of the Asian equity indices were trading in red; Seoul Composite down by 0.39%, Taiwan Weighted down by 0.07%, Shanghai Composite down by 2.05%, Hang Seng down by 0.31%, Nikkei 225 was down by 0.65% and Jakarta Composite down by 0.66%.

On the other hand, KLSE Composite up by 0.01% and Straits Times up by 0.04% were trading in green. 

The European markets were trading in red; France’s CAC 40 was down 0.22%, Germany’s DAX lost 0.27% and UK’s FTSE 100 dropped 0.38%.