Benchmarks continue to trade in red; Nifty below 6050 mark

Indian equities trimmed losses but continued to trade in red in the late afternoon session in absence of buying in frontline counters ahead of India’s GDP data, scheduled to release on Friday. Traders were seen piling position in Consumer Durables, Auto and FMCG stocks while selling was witnessed in Realty, Power and Health Care sector stocks. In scrip specific development, Wockhardt was trading in red as the company has received a warning letter from USFDA for its manufacturing units located at Aurangabad. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. November 2013 series to next month i.e. December 2013 series. The near month November 2013 derivatives contract expires on Thursday i.e. November 28, 2013.

On the global front, the Asian markets were trading in green barring Nikkei 225 and Straits Times while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,050 and 20,400 levels respectively. The market breadth on BSE was negative in the ratio of 941:1323 while 155 scrips remained unchanged.

The BSE Sensex is currently trading at 20386.59, down by 38.43 points or 0.19% after trading in a range of 20,482.67 and 20348.06. There were 7 stocks advancing against 22 stocks declining while 1 stock remained unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.10% while Small cap index down by 0.26%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.19%, Auto up by 0.71%, FMCG up by 0.41%, Oil & Gas up 0.19% and PSU up 0.16%. While, Realty down by 1.02%, Power down by 0.83%, Health Care down by 0.74%, TECK down by 0.47% and Bankex down by 0.43% were losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.73%, Tata Motors up by 1.73%, Coal India up by 1.31%, ITC up by 0.77% and Bajaj Auto up by 0.64%. On the flip side, Bharti Airtel down by 1.66%, SSLT down by 1.47%, Sun Pharma down by 1.38%, Gail India down by 1.38% and HDFC down by 1.12%.

Meanwhile, in a big sign of relief to the foreign banks desirous of converting their branches into wholly owned subsidiaries in India, the Reserve Bank of India (RBI) has notified that conversion of existing foreign bank branches into wholly owned subsidiaries in India will neither attract any capital gains tax nor stamp duty.

The foreign banks were confused over the incidence of tax if they convert braches to wholly owned subsidiaries and sought queries from the central bank regarding the issue. Earlier, this month, the RBI has said that foreign banks, which do not provide adequate disclosures and having complex structures would have to operate in India only through wholly-owned subsidiaries (WoS) in order to regulate and avoid 2008-like crisis. The initial minimum paid-up equity capital or net worth for wholly owned subsidiaries should be Rs 500 crore it added. However, it allowed the foreign banks operating in India before August 2010 to continue their operations in branch model.

The recent RBI guidelines were issued on the back of 2008 global financial crisis, which has emerged due to the growing complexity and inter-connectedness of financial institutions. The central bank has also allowed foreign banks to list their subsidiaries in the local stock exchanges. At present, foreign banks have presence in India only through branches. There are around 43 foreign banks operating in India with a network of 333 branches as of March 2013. 

The CNX Nifty is currently trading at 6,041.15, down by 17.95 points or 0.30% after trading in a range of 6,074.00 and 6,030.30. There were 11 stocks advancing against 37 declining stocks while 2 stocks remained unchanged on the index.

The top gainers of the Nifty were ONGC up by 1.74%, Tata Motors up by 1.65%, Coal India up by 1.37%, BPCL up by 1.26% and Bank of Baroda up by 0.88%. On the flip side, JP Associates down by 3.47%, Power Grid down by 1.86%, IDFC down by 1.82%, DLF down by 1.74% and Bharti Airtel down by 1.54% were the major losers on the index.

The Asian equity indices were trading mostly in green; Shanghai Composite up by 0.82%, Taiwan Weighted up by 0.58%, Hang Seng up by 0.53%, Seoul Composite up by 0.31%, Jakarta Composite up 0.24%, and KLSE Composite added 0.07% while, Nikkei 225 down by 0.42% and Straits Times down 0.18%.

The European markets were trading in green; France’s CAC 40 was up 0.24%, Germany’s DAX added 0.22% and UK’s FTSE 100 edged higher 0.23%.