Bourses trade in a narrow range in noon trades; sluggish global cues cap gains

Stock markets in India continued to trade on an uninspiring note in Thursday’s afternoon trades as the benchmark equity indices traded with around a quarter percent gains. It is turning out to be a choppy session of trade with the frontline indices trading in an extremely tight range. The psychological 19,950 (Sensex) and 5,900 (Nifty) levels were proving as strong support levels as the key indices despite repeated attempts refuse to go substantially below those levels as investors opted to remain on sidelines ahead of expiry of the September F&O series. Nevertheless, frontline gauges were managing to keep their head above water on the Reserve Bank of India’s assurance that it will take actions, including open market operations, to ensure adequate liquidity support in the system. Buying in Auto sector too supported the sentiments with stocks like Mahindra & Mahindra, Tata Motros and Bajaj Auto edging higher on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales.

However, the gains on the upside remained capped on the back of sluggish global cues as most of the Asian counters were trading in the red at this point of time in absence of any positive trigger. While, sluggish opening in European markets too dampened the sentiments with CAC, DAX and FTSE all trading flat in early deals. Back home, the broader markets too were trading slightly in the green and going neck-to-neck with their larger peers. On the sectoral front, metal witnessed the maximum gain in trade followed by capital goods and healthcare, while realty, consumer durables and oil and gas remained the top losers on the BSE sectoral space. The market breadth on BSE was in favor of advances in the ratio of 1046:915 while 133 scrips remained unchanged.

The BSE Sensex is currently trading at 19912.03 up by 55.79 points or 0.28% after trading in a range of 19946.55 and 19826.99. There were only 19 stocks advancing against 11 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index up by 0.52%.The gaining sectoral indices on the BSE were Metal up by 1.21%, Capital Goods up by 0.90%, Health Care up by 0.84%, Bankex up by 0.51% and Auto up by 0.39%. While Realty down by 0.84%, Consumer Durables down by 0.76%, Oil and Gas down by 0.75%, FMCG down by 0.51% and Power down by 0.05% were remained the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.06%, Coal India up by 2.69%, Sun Pharma up by 2.65%, BHEL up by 2.58% and Wipro up by 2.22%. On the flip side, Jindal Steel down by 1.75%, Gail India down by 1.52%, Hindustan Unilever down by 1.37%, Cipla down by 0.87% and RIL down by 0.85% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) banned zero percent interest rate scheme offered by the banks for purchase of consumer goods, citing that such schemes is non-existent and only serve the purpose of alluring and exploiting the vulnerable customers. Under zero percent interest EMI schemes offered on credit card, the interest element is often camouflaged and passed on to the customer in the form of processing fee. As per the central bank regulations, banks should not resort to any practice that would distort the interest rate structure of a product as this violate the transparency in pricing mechanism which is very important for the customer to take informed decision.

The RBI notified that zero percent interest is non-existent and such schemes only misguided the vulnerable customers. Fair practice demands that the processing charge and interest charged should be kept uniform product or segment wise, irrespective of the sourcing channel, it added.

On the financial assistance to customers, the RBI said that the loan amount sanctioned for the purchase should be after taking into account the discount, rather than giving effect to the benefit by reducing the interest. The central bank’s notification also said that risk rating of the customers is the only factor that can justify differential rate of interest for the same product, which may not be applicable in case of retail products where the interest is generally kept flat and is indifferent to the customer risk profile.

The CNX Nifty is currently trading at 5,889.45 up by 15.60 points or 0.27% after trading in a range of 5,900.30 and 5,864.10. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Tata Steel up by 3.09%, Coal India up by 2.85%, Sun Pharma up by 2.79%, JP Associate up by 1.87% and ICICI Bank up by 1.87%. On the flip side, Jindal Steel down by 1.76%, Power Grid down by 1.49%, Hindustan Unilever down by 1.33%, Gail down by 1.27% and DLF down by 1.02% were the major losers on the index.

The Asian equity indices were trading mixed; Straits Times up by 0.66%, Jakarta Composite up by 1.08%, Nikki 225 up by 1.22% and Seoul Composite up by 0.46%. While, KLSE Composite down by 0.40%, Shanghai Composite down by 1.92%, Taiwan Weighted down by 1.20% and  Hang Seng down by 0.13%.

Most of the European markets were trading in green; UK’s FTSE 100 up by 0.01% and Germany’s DAX up by 0.08%, while France’s CAC 40 was down by 0.20%.