Benchmarks trade in proximity of day’s low; Nifty gyrates below 6,150 level

In the dilly-dally session of trade, benchmark equity indices after gaining some ground are trading in proximity to day’s low level on account of prevailing caution ahead of RBI’s monetary policy review on October 29, amidst the expectation that India’s apex bank would hike key interest rates by 25 basis points, while further slashing MSF rate by the same quantum.  In the lackluster session of trade, while Sensex has pared most of their late morning gains to trade past 20,700 levels, Nifty is languishing in red, below the psychological 6,150 level. Meanwhile, broader indices also succumbing to selling pressure are down and out with loss of over 1 /10 of a percent.

Absence of fresh triggers in domestic markets in F&O expiry week also is encouraging investors to take a wait and watch approach ahead of the key event despite positive global set-up. On the global front, Asian pacific shares were trading in green following a record close on Wall Street, while investors picked up bargains after broad losses last week. Back home, Sectorally, stocks from Fast Moving Consumer Goods, Metal and Realty counters were the weak spells of the trade, while those from Consumer Durable, Capital Goods and Oil & Gas are the pockets of the strength. Drubbing of FMCG major, ITC dragged the entire pivotal lower after company’s stocks slipped close to 3% on reporting lower revenue growth. Dented by slow volume growth in cigarette business and fall in agriculture volume, ITC’s net sales increased grew way lower than street expectation at 8.9 % to Rs 7,780 crore during September quarter from Rs 7,146 crore in a year ago period. However, ITC reported higher-than-expected 21.5% growth in its net profit of Rs 2,230 crore in three months period ended September 2013. The overall market breadth on BSE is in the favour of declines which outnumbered advances in the ratio of 1132:962; while 151 shares remained unchanged.

The BSE Sensex is currently trading at 20706.07, up by 22.55 points or 0.11% after trading in a range of 20,771.36 and 20685.15. There were only 17 stocks advancing against 13 declines on the index.

The broader indices succumbed to selling pressure; the BSE Mid cap index was down by 0.24%, while Small cap index slipped by 0.12%. The gaining sectoral indices on the BSE were Consumer Durables up by 1.91%, Capital Goods up by 1.43%, Oil and Gas up by 1.17%, Auto up by 0.67%, and Bankex up by 0.17%. While, FMCG down by 1.91%, Metal down by 1.07%, Realty down by 0.85%, Healthcare down by 0.69% and TECk down by 0.41% were losing indices on BSE.

The top gainers on the Sensex were L&T up by 2.29%, RIL up by 1.71%, ONGC up by 1.43%, HDFC up by 1.32% and Tata Power up by 1.25%. On the flip side, ITC down by 2.87%, SSLT down by 1.95%, Tata Steel down by 1.72%, Coal India down by 1.18% and Sun Pharma down by 0.87% were the top losers on the Sensex.

Meanwhile, with an aim to provide houses at affordable prices to the people and to attract more foreign investment into country’s construction development sector, the Department of Industrial Policy & Promotion (DIPP) has finalised the Cabinet note on relaxing norms for Foreign Direct Investment (FDI) in the construction sector including townships, housing and built-up infrastructure. The views received from various departments and ministries such as the finance and home affairs ministries, ministry of housing and poverty alleviation and planning commission have been assimilated in the final draft note. The DIPP will soon circulate the draft note to Cabinet for approval.

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. 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.

India has received FDI worth $22.24 billion during the period from April 2000 to June 2013, in construction development sector, accounting for 11 per cent of the total FDI that came into India. However, foreign investments in the sector has started drying up since 2012 as the government has also imposed several conditions on it despite allowing 100 percent FDI in construction development sector. FDI in Indian construction sector declined by 52 percent to Rs 7,248 crore in FY13 from Rs 15,236 crore recorded in the FY12. During the April-July, 2013 FDI in construction sector stood at Rs 2,092 crore.

 The CNX Nifty is currently trading at 6,141.95, down by 2.95 points or 0.05% after trading in a range of 6,168.75 and 6,136.70. There were 19 stocks advancing against 31 decline on the index.

The top gainers of the Nifty were L&T up by 2.34%, Reliance up by 1.65%, ONGC up by 1.32%, Tata Power and HDFC were up by 1.31%. On the flip side, ITC down by 2.96%, JP Associate down by 2.30%, Bank of Baroda down by 2.29%, SSLT down by 2.13% and DLF down by 1.95% was the major loser on the index.

Mostof the Asian equity indices were trading in Green; Taiwan Weighted up by 0.73%, Seoul Composite up by 0.68%, Straits Times up by 0.25%, Hang Seng up by 0.59%, Jakarta Composite up by 0.17%, KLSE Composite up by 0.06% and Nikki 225 up by 2.19%, While, Shanghai Composite down by 0.02% was the lone loser in the Asian pack.