Benchmarks pare early gains in afternoon session

Indian equity benchmarks pared early gains and slipped into negative territory in afternoon session amid profit booking witnessed in index heavyweights such as ITC and private banks. Selling was also witnessed in risk sensitive stocks such as banking, realty and auto as investors' sentiments dampened as the WPI inflation, a most closely gauge of price rise in the economy, accelerated to 7-month high of 6.46% in the month of September as against 6.10% in August. The recently released WPI inflation number faded the rate cut hopes as it stayed above RBI’s comfort zone of four to five percent. Sentiments were also dented as Confederation of Indian Industry (CII) survey indicated that Indian economy is likely to grow by below 5 percent rate in the current fiscal. Further, fall in rupee value also added to the pessimistic sentiments. On stock specific movement, RIL was trading over 0.30% on BSE on the back of better-than-expected Reliance Industries’ Q2 numbers.

On the global front, Asian markets were trading mixed with Japanese index Nikki up by 0.26%, while Shanghai Composite down by 0.40%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,050 and 20,500 levels respectively. The market breadth on BSE was negative, out of 2,044 stocks traded, 705 stocks advanced, while 1,220 stocks declined on the BSE.     

The BSE Sensex is currently trading at 20,523.98 down by 83.56 points or 0.41% after trading in a range of 20,759.58 and 20,446.73. There were only 9 stocks advancing against 21 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.98%, while Small cap index down by 0.93%.

The gaining sectoral indices on the BSE were IT up by 0.69% and Teck up by 0.66%. While, Bankex down by 1.68%, Realty down by1.12%, Capital Goods down by 0.97%, PSU down by 0.91% and Consumer Durables down by 0.81% were remained the only losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.27%, Bharti Airtel up by 1.74%, Cipla up by 1.74%, TCS up by 0.87% and Tata Steel up by 0.66%. On the flip side, BHEL down by 1.73%, Hero MotoCorp down by 1.69%, ICICI Bank down by 1.43%, Tata motors down by 1.39% and ITC down by 1.33% were the only losers on the Sensex.

Meanwhile, with an aim to attract more foreign investments into the housing sector and to provide houses at affordable prices to the people, the government is likely to decide soon on relaxing foreign direct investment (FDI) guidelines for the sector. In September, the Department of Industrial Policy & Promotion (DIPP), after taking views on this proposal from various ministries, including the finance, home affairs ministries and the planning commission, has circulated a draft note to cabinet for approval.

The draft note proposes easing the three-year lock-in period for FDI in housing and townships, and also seeks reduction in the minimum capitalization to $5 million from the present $10 million for wholly-owned subsidiaries. According to 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 suggested a cut in the minimum built-up area of 50,000 sq mts to 20,000 sq mts of carpet area in case of construction development projects. Meanwhile, despite allowing 100 percent FDI in townships, housing and built-up infrastructure and construction developments, the government has also imposed conditions on it.

India has received FDI worth $22.24 billion during the period from April 2000 to June 2013, in construction development sector including townships, housing and built-up infrastructure. 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 6,069.75 down by 32.95 points or 0.54% after trading in a range of 6,156.30 and 6,056.55. There were 14 stocks advancing against 36 declines on the index.

The top gainers of the Nifty were JP Associate up by 4.40%, Wipro up by 3.09%, Bharti Airtel up by 1.65%, TCS up by 0.97% and Cipla up by 0.95%. On the flip side, IDFC down by 3.37%, Indusind Bank down by 3.37%, PNB down by 1.99%, Kotak Mahindra Bank down by 1.94% and Axis Bank down by 1.93% were the major losers on the index.

The Asian equity indices were trading mixed; Jakarta Composite up by 0.74%, Taiwan Weighted up by 1.14%, Seoul Composite up by 1.02%. Nikki 225 up by 0.26%, Hang Seng up by 0.34%. While, KLSE Composite down by 0.06%, and  Shanghai Composite down by 0.40%.