Benchmarks trade lackluster in afternoon deals; negative European markets start weighs

Benchmarks continue to trade lackluster in absence of any positive triggers in the afternoon deals, with the focus gradually shifting to the central bank's rate meeting next week. A further, negative European market start is adding to the already grim environment. On the global front, European shares have opened lower in morning trade, with investors focusing on important data due from the U.K. and Germany and a host of earnings news. Meanwhile, Asian pacific shares too are trading downbeat, affected by mixed bag of earnings reports and strengthening remained strong against the dollar. A strong yen is a negative for Japanese exporters as it makes their products less competitive abroad and erode income when repatriated.

Closer home, the Finance Minister’s stipulation of being prepared for US tapering to regulators, also is adding to the underlying weakness of Indian equity markets. Thus, trading near day’s low, Sensex and Nifty, are trading below the psychological 20,700 and 6,150 levels with over quarter of a percent loss.  Finance Minister P Chidambaram has asked financial sector regulators, including RBI and SEBI, to take preventive steps to neutralise the impact of US Federal Reserve's monetary stimulus tapering that is likely early next year. Sectorally, Realty, Capital Goods and metal counters are the weak spells of trade, while Information Technology and FMCG counters, barring the trend are providing a floor to the bourses’ losses. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1258:880; while 150 shares remained unchanged.

The BSE Sensex is currently trading at 20690.30, down by 35.01 points or 0.17% after trading in a range of 20738.76 and 20643.40. There were 10 stocks advancing against 19 declines on the index, while 1 stock remained unchanged.

The broader indices too were showing dismal performance; the BSE Mid cap index was down by 0.31%, while Small cap index has lost 0.41%.

The top gaining sectoral indices on the BSE were IT up by 0.95%, TECK up by 0.60% and FMCG was up by 0.06%. On the other hand, Realty down by 1.89%, Capital Goods down by 1.88%, Metal down by 1.04%, Auto down by 1.04% and Healthcare down by 0.94% were the major losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.94%, NTPC up by 1.12%, ITC up by 0.76%, Infosys up by 0.63% and Wipro up by 0.57%. On the flip side, Hindalco Inds down by 3.93%, Tata Steel down by 2.68%, M&M down by 2.45%, L&T down by 2.34% and BHEL down by 2.21% were the major losers on the Sensex.

Meanwhile, market regulator SEBI has floated detailed guidelines for listing of start-ups and small and medium enterprises (SMEs) on bourses without an initial public offer (IPO). The guidelines come on the heels of notification of new norms by the market regulator earlier this month for permitting listing of start-ups and SMEs through Institutional Trading Platform (ITP) of exchanges.

As per the new guidelines, a company would be eligible for such listing if it has not completed a period of more than 10 years after incorporation and the revenues have not exceeded Rs 100 crore in any of the previous financial years, among others. Further, guidelines mandate company to have an investment of at least Rs 50 lakh, by an alternative investment fund, or a venture capital fund, or by a merchant banker, or an angel investor, or a specialized international multilateral agency, or a public financial institution, among other such investors, to be listed through ITP. 

Moreover, the guidelines require promoters of the company to hold not less than 20% of the post listing capital, which shall be locked for a period of three years. Further, while the company listed on the ITP shall not make an IPO, it would be allowed to raise funds through the rights issue or private placement route.

However, SME would be required to exit the ITP within 18 months if it achieves any of the following milestones -has been listed on the platform for a period of 10 years; has paid-up capital of more than Rs 25 crore; has revenues of more than Rs 300 crore in the last audited financial statement or market capitalisation of Rs 500 crore.  The CNX Nifty is currently trading at 6,143.00, down by 21.35 points or 0.35% after trading in a range of 6,161.95 and 6,132.50. There were 12 stocks advancing against 37 declines on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were HCL Tech up by 2.31%, TCS up by 2.00%, NTPC up by 1.22%, PowerGrid up by 0.96% and Wipro up by 0.96%. On the flip side, NMDC down by 4.04%, Hindalco down by 3.97%, DLF down by 3.80%, Cairn India down by 2.74% and Tata Steel down by 2.68% were the major losers on the index

Almost all the Asian equity indices were trading in red; Shanghai Composite plunged by 1.61%, Hang Seng lost 0.51%, Jakarta Composite dropped 0.37%, KLSE Composite slipped 0.32%, Nikkei 225 slumped by 2.75%, Straits Times declined by 0.15%, Seoul Composite lost 0.60% and Taiwan Weighted was down by 0.80%.

European markets have got off to negative start; with CAC 40 declining by 0.55%, DAX sliding by 0.34% and FTSE losing 0.10%.