Indian equities continue lackadaisical trade hovering near neutral line

Indian equities traded in a narrow range in red hovering near the neutral line in absence of buying as investors refrained from accumulating stocks ahead of global uncertainty and lack of positive domestic triggers. In the fight between bulls and bears to gain control it seems bears have got upper hand with bulls trying hard to resume its yesterday rally and make market trade in green. Traders were seen piling up the position in Capital Goods, Realty and Consumer Durables sector while selling was witnessed in IT, TECk and Metal sector stocks. BHEL, L&T from Capital Goods sector were trading with gain of around more than four and half percent helping to pull the markets. DLF from Realty sector was trading with gain of around five percent giving the much needed support for the market. SBI, Kotak Bank, Axis Bank and HDFC Bank were seen trading in green giving the market a push. TCS, Infosys and HCL Technologies from IT stable are trading in red exerting pressure on the market. IT stocks declined on euro-zone debt worries. Europe is the second biggest outsourcing market for Indian software exporters after the US. Index heavyweight RIL is seen trading weak in red helping markets bleed. Also, ONGC from Oil & Gas sector is pulling down the markets. Tata Steel, Sesa Goa, Jindal Steel, Hindalco, SAIL and Sterlite from Metal pack were seen trading in red putting pressure on the markets. Maruti, Hero MotoCorp and M&M from Auto pack were trading in red further driving down the markets.

In the scrip specific development, shares of organized retailers Vishal Retail, Pantaloon Retail India, Store One Retail India, Koutons Retail India, Trent and Shoppers Stop were trading high after the Union Cabinet on November 24, 2011, cleared a proposal to allow foreign direct investment in multi-brand retail. Shares of aviation companies like KingFisher, JetAirways and SpiceJet were trading firm on hopes that the government may allow foreign air carriers to invest in domestic aviation firms. Shares of realty companies like DLF, Sobha Developers, DB Realty, Phoenix Mills, Godrej Properties, HDIL, Anant Raj Industries and Indiabulls Real Estate edged higher on hopes that real estate firms may benefit from the government's move to allow foreign direct investment in multi-brand retail chains. On the global front, all Asian markets were seen trading in red while the European markets were too trading in red on pessimistic note. Fitch has downgraded Portugal to junk status while Hungary's rating has been cut yesterday by Moody's Investor Services. Trade unions in Portugal, meanwhile, staged a 24-hour strike to protest government austerity measures. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 4,800 and 15,900 levels, respectively. The market breadth on the BSE was positive in the ratio of 1654:961 while, 117 scrips remained unchanged.

The BSE Sensex is currently trading at 15,832.90 down by 25.59 points or 0.16% after trading as high as and 15,891.05 as low as 15,672.19. There were 13 stocks advancing against 17 declines on the index.

The broader indices were trading on a strong note; the BSE Mid cap index surged 1.18% while Small cap jumped 1.46%.

On the BSE sectoral space, Capital Goods up 3.67%, Realty up 2.75%, Consumer Durables up 1.97%, Power up 1.43% and PSU up 1.09% were the major gainers while IT down 1.44%, TECk down 0.91%, Metal down 0.77%, Oil & Gas  down 0.62% and FMCG down 0.08% were the only losers in the space.

DLF up 5.21%, BHEL up 4.98%, L&T up 4.49%, Tata Motors up 2.95% and Coal India up 2.43% were the major gainers on the Sensex, while Maruti down 3.08%, Hero MotoCorp down 2.60%, Tata Steel down 2.36%, Jindal Steel down 1.86% and TCS down 1.83% were the major losers in the index.

Meanwhile, the Insurance Regulatory and Development Authority (IRDA) has came out with draft guidelines for the bancassurance business, under which insurance companies will be allowed to partner with different banks and non-banking finance companies (NBFCs) in different states for selling their products. However, as per the draft norms, banks and NBFCs will not be allowed to sell products of competing insurers in a particular state.

According to IRDA, banks may now be able to tie up with one insurance company in the life, non-life and health insurance spaces but only in a specified number of states. In other words, banks can have tie-ups with multiple insurance companies in different states. At present, one bank can sell products of any one insurer in the life and non-life segments.

Further, as per the draft norms, a bank can tie up with a specialized insurance company in addition to an insurance company. Also, a specialized insurer can tie up with any bancassurance agent across the country. However, the guidelines have not defined a specialized insurance company. The draft norms have also allowed banks to tie-up with an additional non-life company just to sell health insurance in case the existing general insurer does not have any health product.

For the purpose of appointing bank partners, the draft norms have also divide the country into three zones. Zone A includes Delhi, Mumbai, Chennai and Bangalore. Zone B includes Uttar Pradesh, Rajasthan, Bihar and Madhya Pradesh and zone C includes north-eastern states along with Goa and Uttarakhand. An insurance company can’t tie-up with any bancassurance agent in more than nine states and Union territories (UTs) in zone A and six states and UTs in zone B. Since the guidelines are silent about zone C, one can presume that the insurer can tie-up with one bank in all the states under zone C.

On the commission front, the draft norms has recommended limiting the commission to 85% of the commission payable under the Insurance Act, 1938.

The S&P CNX Nifty is currently trading at 4,750.90, lower by 5.55 points or 0.12% after trading as high as 4,767.30 and as low as 4,700.50. There were 25 stocks advancing against 24 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were DLF up 5.00%, BHEL up 4.78%, Ranbaxy up 4.61%, L&T up 4.56% and Tata Motors up 3.18%.

Maruti down 2.98%, Hero MotoCorp down 2.92%, Tata Steel down 2.75%, Sesa Goa down 2.70% and Ambuja Cement down 2.55% were the major losers on the index.

Asian markets continued to trade on a bleak note, Shanghai Composite dropped 0.72%, Hang Seng plunged 1.37%, Jakarta Composite plummeted 1.39%, KLSE Composite sank 1.13%, Nikkei 225 inches down 0.06%, Straits Times shaved-off 0.92%, Seoul Composite slumped 1.04% and Taiwan Weighted nosedived 1.16%.

The European markets were trading in red with, France’s CAC 40 dropped 0.20%, Germany's DAX descended 0.04% and Britain’s FTSE 100 inched drops 0.42%.