Benchmarks pare early gains; trade at intra-day low level in afternoon session

Indian equity benchmarks pared early gains and entered into negative territory in afternoon session amid selling witnessed in some frontline blue-chip stocks such as Tata Motors, Tata Steel, Coal India and ONGC. Investors also opted to remain on sidelines ahead of important macro data such as Index of industrial production (IIP) and CPI inflation scheduled to be announced later in the day. Investor sentiments took a hit after FICCI survey noted that Indian manufacturing sector is likely to witness subdued growth in the October-December quarter of current fiscal particularly due to the concerns over high interest rates. Further, continued weakness in rupee due to dollar buying by Oil companies also added to the pessimistic sentiments. On sector specific movement, metal was the top loser among the sectoral indices on the BSE down by around 1.25% followed by auto and power indices. Meanwhile, buying witnessed in realty, healthcare and FMCG stocks. On stock specific movement, Hindalco Inds were trading up by around 1.84% on BSE as investors hopes that the company will post better than expected profit for Q2 FY14.

On the global front, Asian markets were trading mixed with Japanese indices Nikkei up by 2.01% and KLSE Composite down by 0.38% as global investors has turned their attention to the Chinese Communist Party policy meeting for clues to its economic agenda for the next decade. Back home, the NSE Nifty and BSE Sensex were trading down their psychological 6,100 and 20,500 levels respectively. The market breadth on BSE was positive, out of 2,101 stocks traded, 1,012 stocks advanced, while 969 stocks declined on the BSE.       

The BSE Sensex is currently trading at 20,423.34 down by 67.62 points or 0.33% after trading in a range of 20,584.22 and 20,417.32. There were only 9 stocks advancing against only 21 declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index up by 0.12%.

The gaining sectoral indices on the BSE were Realty up by 1.06%, Healthcare up by 0.53%, FMCG up by 0.43%. While, Metal down by 1.25%, Auto down by 0.71%, Power down by 0.70%, PSU down by 0.70% and Bankex down by 0.40% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco Inds up by 1.84%, Wipro up by 1.26%, Maruti Suzuki up by 0.97%, Sun Pharma up by 0.78% and Cipla up by 0.52%. On the flip side, SSLT down by 3.02%, Tata Motors down by 2.43%, Tata Steel down by 1.56%, ONGC down by 1.55% and Coal India down by 1.16% were the only losers on the Sensex.

Meanwhile, in a move to attract higher capital inflow into the country, the Reserve Bank of India (RBI) has allowed SEBI-registered qualified foreign investors (QFIs) and foreign institutional investors (FIIs) to invest in the credit enhanced bonds up to a limit of $5 billion.

The central bank has said that these investments by foreign investors would be within the overall limit of $51 billion earmarked for corporate debt and investment opportunity has also been extended to long term investors registered with SEBI such as Sovereign Wealth Funds (SWFs), Multilateral Agencies, Pension/ Insurance/ Endowment Funds and Foreign Central Banks. The present limits for investments by QFIs, FIIs and long term investors registered with SEBI in Government securities is $30 billion.

Foreign investment is considered crucial for economic development, as a rise in capital inflow will help support the rupee, which has further started depreciating amid rising demand for the US dollar. Recently, the rupee breached the 63 mark against the US dollar for the first time since September 30. Despite the various efforts of Indian authorities to enhance capital inflow, FIIs have pulled out Rs 2,916 crore from debt securities so far this month and have withdrawn Rs 53,070 crore from the debt market since the beginning of year owing to the rising worries over the US Fed tapering. The CNX Nifty is currently trading at 6,062.70 down by 16.10 points or 0.26% after trading in a range of 6,108.70 and 6,059.00. There were 19 stocks advancing against 31 declining on the index.

The top gainers of the Nifty were Hindalco Inds up by 1.93%, Cairn up by 1.67%, Ranbaxy up by 1.34%, Maruti Suzuki up by 1.13% and Wipro up by 1.09%. On the flip side, SSLT down by 3.07%, Tata Motors down by 2.41%, Tata Steel down by 1.76%, NMDC down by 1.51% and Coal India down by 1.40% was the major loser on the index.

The Asian equity indices were trading mixed; Nikkei 225 up by 2.01%, Shanghai Composite up by 0.72%, Taiwan Weighted up by 0.16% and Seoul Composite up by 0.99%. While,  KLSE Composite down by 0.38%, Straits Times down by 0.01%,Hang Seng down by 0.42% and Jakarta Composite down by 0.45%.