Benchmarks make cautious opening after the big rally

Indian equity benchmarks are trading slightly lower in early deals on Tuesday as investors booked profit after the previous session’s rally. Sluggish global cues too were dampening the sentiments with the US markets making a flat closing after a lackluster trade and traders digested the news of historic agreement regarding Iran’s controversial nuclear program as the trade progressed and remained concerned about unexpected drop in pending home sales. Moreover, Asian equity indices were exhibiting mixed at this point of time with investors mostly treading cautiously amid a lack of fresh triggers.

Back home, sentiments also remained somber after the Cabinet deferred the consideration of proposals to relax foreign direct investment norms in the housing sector and to reduce the FDI cap to 49 percent in critical areas of the pharma segment. The gold and jewellary stocks like Shree Ganesh Jewellery, Gitanjali Gems and PC Jewellers too edged lower as the Exports of gold jewellery from India fell 6.9 percent on month in October to $608.95 million. However, investors are drawing some comfort from provisional data, which showed that FIIs once again turned net buyers in Indian equities, purchasing shares worth a net Rs. 837.80 crore yesterday.

On the sectoral front, capital goods witnessed the maximum gain in trade followed by realty and consumer durables, while fast moving consumer goods, software and technology remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 607 shares on the gaining side against 516 shares on the losing side while 66 shares remain unchanged.

The BSE Sensex opened at 20604.27; about 1 point lower compared to its previous closing of 20605.08, and has touched a high and a low of 20604.27 and 20523.48 respectively. The index is currently trading at 20573.01, down by 32.07 points or 0.16%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a strong start with 50.38% stocks advancing against 45.05% declines. The broader indices were trading in green; the BSE Mid cap up by 0.13% and Small cap indices up by 0.14%. 

The top gaining sectoral indices on the BSE were, Capital Goods up by 0.97%, Realty up by 0.76%, Consumer Durables up by 0.39%, Power up by 0.34% and Healthcare up by 0.22%, while FMCG down by 0.76%, IT down by 0.54%, Teck down by 0.37% and Auto down by 0.17% were the top losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 3.50%, Gail India up by 1.26%, L&T up by 0.86%, ICICI Bank up by 0.81% and Sun Pharma up by 0.59%. On the flip side, ITC was down by 1.57%, Tata Steel was down by 1.13%, TCS was down by 0.83%, NTPC down by 0.77%  and Infosys was down by 0.68% were the top losers on the Sensex.

Meanwhile, as per the global consulting firm Ernst & Young (EY) survey, India has emerged as the most attractive investment destination for overseas investors surpassing neighbouring countries such as China and the US mainly on the back of relaxation in Foreign Direct Investment (FDI) norms.

The survey, based on the assessment of about 1,600 senior executives from large companies across 70 countries, highlighted that sharp currency depreciation and opening up of FDI in various sectors have made the country a favorable investment destination. Further, owing to the prevailing macro-economic pressure and heavy debt burden, several Indian companies are looking to divest non-core businesses, which have created a large opportunity for foreign players vying for a greater role in Indian market. On country wise, the US, France and Japan have emerged as top three investors likely to invest in India particularly in sectors like automotive, technology, life sciences and consumer products.

Furthermore, the survey highlighted that despite the challenges the country's economy has faced in the recent past, global investors’ outlook for India remains positive. Indian companies reflect optimising operations to deliver cost reduction and a concerned focus on job creation. Around 38 percent of the respondents felt that M&A volumes in India are expected to improve over the next 12 months. Conversely, Indian corporate entities have also started looking at developed markets for making acquisitions. EY survey has ranked Brazil and China at second and third positions in most attractive investment destinations followed by Canada and the US at fourth and fifth positions.

The CNX Nifty opened at 6,099.25; about 16 points lower as compared to its previous closing of 6,115.35, and has touched a high and a low of 6,111.90 and 6,087.75 respectively.

The index is currently trading at 6,105.65, down by 9.70 points or 0.16%. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were BHEL up by 3.74%, L&T up by 1.14%, Gail up by 0.96%, IndusInd Bank up by 0.93% and DLF up by 0.87%. On the flip side, ITC down by 1.25%, UltraTech Cement down by 1.24%, Cairn down by 1.13%, Tata Steel down by 0.89% and NTPC down by 0.83% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.28 points or 0.01% to 2,186.40, Hang Seng increased 50.84 points or 0.21% to 23,735.29, KLSE Composite jumped 2.67 points or 0.15% to 1,800.64, Seoul Composite added 3.47 points or 0.17% to 2,019.45 and Taiwan Weighted was up by 74.10 points or 0.91% to 8,261.61.

On the flip side, Jakarta Composite declined 38.60 points or 0.89% to 4,296.20, Nikkei 225 dropped 91.63 points or 0.59% to 15,527.50 and Straits Times was down by 0.37 points or 0.01% to 3,180.28.