Benchmarks come off day’s high level; Sensex slips below 20,600 level

Indian equity benchmarks, although continue to trade firmly in green terrain, but have cooled off their day’s high level as volatility on account of F&O expiry sinks in.  Nevertheless, the secular up-move of the bourses is mainly on account of across the board buying activities amidst positive global set-up. Amidst this, only stocks from Information Technology counter are acting spoil sports. Meanwhile, the top gainers are the stocks belonging from Capital Goods, Power and Realty counters. Slipping off high, while Nifty is holding above the crucial 6,100 level, Sensex has slipped below the psychological 20,600 level.  Meanwhile, Broader indices sustaining their early momentum, were up and about with gains of over 3/ 4 of a percent.

On global front, Asian shares held steady early on Thursday, although Japanese stocks look set to head back towards a 5-1/2 year peak reached in May after the yen fell sharply on the back of relatively positive U.S. economic data.

Closer home, in other sector specific activities, oil and gas companies stocks were trading higher after Oil Secretary Vivek Rae underscored that the Ministry of Petroleum and Natural Gas was working out a policy framework on shale gas exploration under which private domestic oil and gas players would get the right to explore shale gas or oil in their blocks. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1241:848; while 162 shares remained unchanged

The BSE Sensex is currently trading at 20566.68 up by 146.42 points or 0.72% after trading in a range of 20,606.38 and 20,517.97. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices continue to trade in fine fettle; the BSE Mid cap index was up by 0.92%, while Small cap index was up by 0.80%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.91%, Power up by 1.67%, Realty up by 1.63%, Oil & Gas up by 1.45%, and PSU up by 1.11%. While, IT down by 0.05% was the only losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.24%, RIL up by 1.90%, SSLT up by 1.87%, Coal India up by 1.79%, and M&M up by 1.78%. On the flip side, Infosys down by 0.23% was the lone loser on the index.

Meanwhile,the Department of Industrial Policy and Promotion (DIPP) is expected to propose a new policy on foreign direct investment (FDI) in the pharma sector. As per the new DIPP’s proposal, 100 percent FDI would be allowed in brown-field projects, subject to government's approval. However, for brown-field project deals with rare facilities and critical verticals, only 49 percent FDI would be allowed with government's approval. Furthermore, DIPP also noted that 25 per cent of the total investment in the brown-field projects should be used in Research and Development (R&D) activities.

Meanwhile, the DIPP’s proposal has brought disappointment to Finance ministry, which stated that proposed 49 per cent FDI cap on projects dealing with rare facilities would discourage potential investors. Foreign Direct Investment (FDI) in the pharma sector grew by more than double to $1.07 billion during April-August’ 2013 as compared to $487 million during the same period last year. During the period 2000-2013, India's pharmaceutical sector attracted $11.39 billion in foreign investment, which was around 6 percent of its total $200 billion foreign investment inflows.

On the other hand, the DIPP and health ministry are of the view that in the absence of such policy, affordability and accessibility of Indian generic drugs would be highly impacted. Industry's generic segment accounts for the largest chunk of the sector, with a share of around 72 percent in the total industry revenue. The Indian generic drug market grew at a CAGR of around 17 per cent between 2010-11 and 2012-13 mainly on the back of rising exports of generic drug due to their low cost.

The CNX Nifty is currently trading at 6,103.10, up by 46.00 points or 0.76% after trading in a range of 6,112.95 and 6,090. There were 43 stocks advancing against 7 declining on the index.

The top gainers of the Nifty were JP Associates up by 6.93%, BHEL up by 3.69%, IDFC up by 2.83%, Grasim Inds up by 2.75%  and DLF up by 2.24%. On the flip side, Ambuja Cement down by 1.17%, Cairn India down by 0.59%, ACC down by 0.17%, Lupin down by 0.12% and Infosys down by 0.10% were the major losers on the index.

The Asian equity indices were trading in green; Shanghai Composite up by 0.87%, Taiwan Weighted up by 0.80%, Hang Seng up by 0.54%, Seoul Composite up by 0.84%, Nikkei 225 up by 1.80%, Straits Times up by 0.59%, and KLSE Composite up by 0.24%. While, Jakarta Composite down by 0.45% was the lone loser amongst Asian pack.