Markets continue to listlessly gyrate in negative terrain; Nifty stays below the crucial 6350 level

After recovering a bit from day’s low level, benchmarks continued to gyrate listlessly in red terrain in absence of positive trigger that could take the markets higher amidst mostly negative global set-up. Profit-booking by funds and retail investors right from the start of the trade have kept the mood downbeat at Dalal Street. Sensex and Nifty were trading below the crucial 21,250 and 6,350 levels respectively. Meanwhile, broader indices too witnessing selling pressure were trading with a cut of over quarter of percent.

On the global front, Asian stock markets were trading mostly in red on Tuesday ahead of Chinese data to come out later in the day, with Japanese shares falling as the yen's downward momentum slowed. Trading across the globe, took a hit on account of caution after a string of speeches by three Federal Reserve presidents suggested that the U.S. central bank could start to scale back its $85-billion-a-month stimulus program as early as this month.

Sectorally, Information Technology, Fast Moving Consumer Goods and Auto counters limited the downtrend of bourses, stocks from Power, Capital Goods and banking counters were endorsing the underlying weakness of local equity markets. Interestingly, Auto stocks were holding up in green despite data from Society of Indian Automobile Manufacturers (Siam) showing that domestic passenger car sales declined 8.15% to 142,849 units in November this year compared with 155,535 units sold in the same month last year.  On the flip side, Power stocks tripped after Central Electricity Regulatory Commission (CERC) released draft regulations which will decide power tariffs for a period of five years from 1 April 2014. Tata Power Company, Torrent Power, , Adani Power Power Grid Corporation of India Reliance Infrastructure, all lost in the range of 2-10%.The overall market breadth on BSE in the favour of declines which thumped advances in the ratio of 1213:809; while 118 shares remained unchanged.

The BSE Sensex is currently trading at 21245.43, down by 80.90 points or 0.38% after trading in a range of 21,327.75 and 21,218.71. There were 11 stocks advancing against19 stocks declining on the index.

The broader indices continued to reel under pressure; the BSE Mid cap and Small cap indexes were trading lower by 0.24% and 0.42% respectively.

The gaining sectoral indices on the BSE were IT up by 1.90%, Teck up by 1.54%, FMCG up by 0.79%, Auto up by 0.11% and HealthCare up by 0.01%. While, Power down by 4.48%, Capital Goods down by 3.75%, Bankex down by 1.90%, Realty down by 1.06%, and Oil and Gas down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.49%, Wipro up by 2.16%, ITC up by 1.37%, SSLT up by 1.23%, and Bajaj Auto up by 1.07%. On the flip side, NTPC down by 11.52%, BHEL down by 5.53%, L&T down by 4.40%, ICICI Bank down by 3.40% and ONGC down by 2.35%. Meanwhile, a Parliamentary panel has suggested the Reserve Bank of India (RBI) should refrain from giving bank licenses to corporates as the banking business is 'highly leveraged' and involves public money. Headed by senior BJP leader Yashwant Sinha, the Standing Committee on Finance also asked the RBI to review the guidelines on 'licensing of new banks in the private sector’ issued on February 22 and opined that it will be more in the fitness of things to keep industry and banking separate.

Additionally, the committee also has expressed apprehension that management of private banks may deploy their funds to extend undue favour to own industrial owners, as noticed in the pre- nationalized era and may not be geared up to achieve the national objectives of financial inclusion, priority sector lending, etc.

Further, the thirty two member have also raised concerns on of ‘fit and proper’ criteria to  be used by RBI to grant banking license as 'too ambiguous' and the one which will leave the doors open for arbitrariness and invite charges of favoritisms. So, with a view to ensure fair-play and justice in the licensing process, the committee has favoured for a suitable mechanism to enable aggrieved applicants to seek review of decisions.

Furthermore, it has recommended raising the minimum capital requirement for the new banks to Rs 1,000 crore from the present Rs 500 crore. On timeline, the committee recommended the RBI to execute the process of screening and evaluation of applications in a well-defined and transparent manner, so that there is no room for speculation or conjecture. A total of about twenty four companies, including corporate houses, are in the fray to obtain bank licenses, which the RBI proposes to hand out in the first quarter of 2014.

The CNX Nifty is currently trading at 6,326.80, down by 37.10 points or 0.58% after trading in a range of 6,362.25 and 6,322.45. There were 16 stocks advancing against 34 declining on the index.

The top gainers of the Nifty were TCS up by 3.32%, Wipro up by 2.27%, Lupin up by 1.52%, ITC up by 1.47% and SSLT up by 1.38%. On the flip side, NTPC down by 11.08%, BHEL down by 5.57%, L&T down by 4.59%, Power Grid down by 3.80% and IndusInd Bank down by 3.50% were the major losers on the index.

The Asian equity indices were trading mostly in red; Seoul Composite down by 0.35%, Hang Seng down by 0. 33%, Straits Times down by 0.47%, Nikkei 225 down by 0.25% and Taiwan Weighted down by 0.01%. While, Jakarta Composite up by 1.22%, Shanghai Composite up by 0.07% and KLSE Composite up by 0.23%.