Benchmarks trade marginally higher; cautious ahead of RBI policy this week

Buoyed by firm global cues, Indian equity benchmarks are trading in the positive terrain in early morning deals with frontline gauges recapturing their crucial 20,700 (Sensex) and 6,150 (Nifty) bastions. The US markets extended gains on Friday after getting some more encouraging earnings announcements. Moreover, most of the Asian markets were trading in fine fettle at this point of time after weaker than forecasted U.S. consumer confidence raised hopes that the Federal Reserve will maintain stimulus. Meanwhile, Japanese markets remained the top gainers amongst other regional peers, garnering over one and a half percent gain on weaker yen.

Back home, some strength came in from report that foreign institutional investors (FIIs) bought shares worth a net Rs 626.99 crore on October 25, 2013. However, gains on the up-side remained capped as investors remained cautious ahead of Reserve bank of India’s (RBI’s) policy announcement. Some cautiousness also crept in after report showed that Foreign Direct Investment (FDI) into India declined to 8-month low of $1.4 billion in August, down 38 percent year-on-year. Also volatility is expected on the street as the long October series will be expiring this week.

On the sectoral front, consumer durables witnessed the maximum gain in trade followed by capital goods and oil and gas, while fast moving consumer goods, software and technology remained the top losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 679 shares on the gaining side against 488 shares on the losing side while 67 shares remain unchanged.

The BSE Sensex opened at 20696.51; about 13 points higher compared to its previous closing of 20683.52, and has touched a high and a low of 20771.36 and 20689.08 respectively. The index is currently trading at 20705.64, up by 22.12 points or 0.11%. There were 21 stocks advancing against 9 declines on the index.

The overall market breadth has made a strong start with 55.02% stocks advancing against 39.55% declines. The broader indices were trading in green; the BSE Mid cap up by 0.22% and Small cap indices up by 0.26%. 

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.34%, Capital Goods up by 1.19%, Oil & Gas up by 0.72%, Bankex up by 0.61% and Auto up by 0.47%, while FMCG down by 1.43%, IT down by 0.42%, Teck down by 0.39% and Health Care down by 0.24% were the top losers on the sectoral index.

The top gainers on the Sensex were L&T up by 1.70%, Hindustan Unilever up by 1.34%, Gail India up by 1.27%, Hindalco Industries up by 1.10% and ICICI Bank up by 1.09%. On the flip side, ITC was down by 2.94%, Sun Pharma was down by 0.97%, Infosys was down by 0.52%, Wipro was down by 0.43% and TCS was down by 0.40% were the top 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 opened at 6,155.10; about 10 points higher as compared to its previous closing of 6,144.90, and has touched a high and a low of 6,168.75 and 6,145.50 respectively. The index is currently trading at 6,151.45, up by 6.55 points or 0.11%. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were Axis Bank up by 1.95%, L&T up by 1.93%, Hindustan Unilever up by 1.46%, Kotak Bank up by 1.31% and ICICI Bank up by 1.13%. On the flip side, ITC down by 2.88%, HCL Tech down by 1.48%, JP Associate down by 1.20%, SUN Pharma down by 1.11% and Cairn down by 0.88% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 103.64 points or 0.46% to 22,801.98, Jakarta Composite strengthened 19.08 points or 0.42% to 4,599.93, KLSE Composite increased 0.66 points or 0.04% to 1,818.23, Nikkei 225 surged 250.68 points or 1.78% to 14,338.87, Straits Times gained 6.80 points or 0.21% to 3,212.04, Seoul Composite added 7.28 points or 0.36% to 2,041.67 and Taiwan Weighted was up by 59.70 points or 0.72% to 8,406.32.

On the flip side, Shanghai Composite was down by 4.66 points or 0.22% to 2,128.29.