Benchmarks continue to trade firm in late morning

Benchmarks continue to trade firm with both Sensex and Nifty hitting 3-weeks high led by financials and capital goods shares. Sentiments got boosted as the Indian rupee was marginally higher in range-bound trade, at 61.82/83 versus previous close of 61.90/91 per dollar. Some support also came in from rally in shares of public sector oil marketing companies (PSU OMCs) as their under-recovery on diesel declined for the first fortnight of January 2014 and after they reported hike in the price of non-subsidised cooking gas (LPG) by a steep Rs 220 per cylinder on Wednesday on firming international rates. Meanwhile, the PSU OMCs also increased the price of aviation turbine fuel (ATF) by 2.7%.

On the global front, Asian markets were trading in the red at this point of time on account of weaker-than-expected manufacturing data out of China, while US markets remained closed on account of New Year’s Day. Back home, traders were buying, Bankex, Consumer Durables and Oil & Gas on the BSE.

The market breadth on BSE remains positive with advances to declines in the ratio of 1322:462. BSE Sensex and NSE Nifty were comfortably trading near their psychological 21,200 and 6,300 levels respectively. The BSE Sensex is currently trading at 21288.91 up by 148.43 points or 0.70% after trading in a range of 21331.32 and 21140.58. There were 27 stocks advancing against 3 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.95% and Small cap index gained 0.99%.

The top gaining sectoral indices on the BSE were, Bankex up by 1.50%, Consumer Durables up by 0.92%, Oil & Gas up by 0.59%, Realty up by 0.59%, and Capital Goods up by 0.55%, while there were no losers on the sectoral index.

The top gainers on the Sensex were Axis Bank up by 2.16%, HDFC up by 1.61%, Gail India up by 1.50%,  ICICI Bank up by 1.33%, and HDFC Bank up by 1.20%. On the flip side, Bharti Airtel was down by 0.77%, Coal India was down by 0.34% and NTPC was down by 0.25% were the only losers on the Sensex.

Meanwhile, In order to safeguard the interest of small investors and overall market place, the Securities and Exchange Board of India (SEBI) has decided to put in place a greater oversight mechanism on insider trading and a stronger risk management framework as among key focus areas for 2014.

SEBI will soon issue a new set of insider trading norms, which would replace nearly two-decade old norms currently in operation. Further, new guidelines for insider trading are likely to put in place stricter penalties for those found to be indulging in insider trading activities. New norms would bring new categories of persons, including public servants, regulatory officials, and judiciary and government officials dealing with unpublished price-sensitive information under the purview of insider trading. Further, new insider trading norms clearly demarcate mistakes from serious violations committed by top corporate executives and other connected entities while trading in shares of listed companies.

The market regulator is also working on a number of initiatives such as risk management framework, trade annulment policy, interoperability of clearing corporations, policy on stress testing and a securities guarantee fund without including margin money. Furthermore, in order to attract more capital inflows into the Indian capital market, SEBI has sought for clarity on taxation policy to be applied to retirement- focused funds and also taking measures to attract foreign investors. SEBI prescribed adoption of risk-based Know Your Client (KYC) norms for foreign investors by categorising them into three segments.

The CNX Nifty is currently trading at 6,344.85 up by 43.20 points or 0.69% after trading in a range of 6,358.30 and 6,300.65. There were 43 stocks advancing against 7 stock declines on the index.  The top gainers of the Nifty were Bank of Baroda up by 2.91%, Axis Bank up by 2.16%, PNB up by 1.97%, Indusind BK up by 1.82% and Power Grid up by 1.76%. On the flip side, Bharti Airtel down by 0.98%, Coal India down by 0.50%, NTPC down by 0.47%, Jindal Steel down by 0.30% and NMDC down by 0.25%, were the top losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 9.28 points or 0.44% to 2,106.70, Hang Seng dipped 49.48 points or 0.21% to 23,256.91, KLSE Composite contracted 11.32 points or 0.61% to 1,855.64, Seoul Composite tumbled 31.01 points or 1.54% to 1,980.33 and Taiwan Weighted was down by 5.04 points or 0.06% to 8,606.47.

On the flip side, Jakarta Composite added 37.88 points or 0.89% to 4,312.06 and Straits Times was down by 6.01 points or 0.19% to 3,173.44.

Japanese markets remained closed for the trade today