Post Session: Quick Review

Registering its first gain for year 2014, Indian equity markets finally saw the light of the day after five consecutive sessions of losing streak on Wednesday. Although, no run-up rally was witnessed during the session, modest gains of over one tens of a percent that took Sensex closer to the crucial 20,700 mark and Nifty past 6,150 level by the close of trade, turned out to be heartwarming, especially as these came after a long span of downturn.  Throughout the session, benchmarks even once did not slip in red, although the markets appeared distinctively closer of dipping their head in early morning deals and more largely in dying hours of trade. Barometer gauges pared most of their gains in afternoon deals, little before the start of European markets, which edged lower ahead of further euro zone data that could prompt the European Central Bank (ECB) to change its monetary policy stance on Thursday. But recovery soon followed.  However, bout of profit-booking which emerged during the last hour of trade took away most of the gains. By the close of trade, broader indices outperformed larger peers by fat margins and ended with gains in the range of 0.25-0.50%.

Nevertheless, positive regional counterparts also kept the sentiment upright for Indian equity markets. Asian pacific shares mostly ended higher on Wednesday after strong trade data boosted expectations for US growth, while a lessening of sovereign strains in Europe lifted stocks there to the highest since 2008.

Closer home, while most of the sectoral indices closed in green, stocks from Capital Goods, Power and Consumer Durable counters underperformed. On the flip side, stocks from Healthcare, Auto and Public Shares Undertaking (PSU) counters were the top gainers of the session. PSU stocks remained in demand on reports of government plans to sell stake in companies such as Indian Oil Corporation and Engineers India in January, to meet disinvestment target at Rs 40,000 crore for current financial year. Meanwhile, shares of PSU banks, viz, Syndicate Bank, Allahabad Bank, Bank of India and Union Bank of India, gained traction on hopes of interim dividend. Additionally, export-driven IT and pharmaceutical shares rallied on expectations a weaker rupee and healthier overseas markets will boost earnings. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1503: 1070, while 158 scrips remained unchanged. (Provisional)

The BSE Sensex gained 33.84 points or 0.16% to settle at 20727.08. The index touched a high and a low of 20786.41 and 20688.18 respectively. Among the 30-share Sensex, 16 stocks gained, while 14 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.55% and 0.26% respectively. (Provisional)

On the BSE Sectoral front, Healthcare up by 1.02%, Auto up by 0.80%, PSU up by 0.74%, Metal up by 0.47% and Oil & Gas up by 0.26% were the top gainers, while Capital Goods down by 1.45%, Consumer Durables down by 0.78%, Realty down by 0.60% and Power down by 0.09% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Coal India up by 4.88%, Cipla up by 3.29%, Gail India up by 2.60%, Tata Power up by 1.95% and Dr Reddys Lab up by 1.72%, while, L&T down by 2.03%, Axis Bank down by 2.01%, BHEL down by 1.66%, ONGC down by 1.32% and SSLT down by 1.05% were the top losers in the index. (Provisional)

Meanwhile, with a view to enhance the foreign investment in Indian capital markets, the Securities and Exchange Board of India (SEBI) has notified new Foreign Portfolio Investor (FPI) regulations to put in place an easier registration process and operating framework for overseas entities.

The new regulations that came into effect have replaced the existing regulations for Foreign Institutional Investors (FIIs), FPIs and Qualified Foreign Investors (QFIs).  As per the new SEBI’s norms, Know Your Client (KYC) requirements and other registration procedures have been made simpler for FPIs compared to current practices.

Further, SEBI has also noted that permanent registration will be granted to overseas entities as against the current practice of granting approvals for one year or five years adding that registration would be permanent unless suspended or cancelled by the regulator or surrendered by the FPI. The market regulators further added that FPIs would need to apply for registration through Designated Depository Participants (DDPs), subject to compliance with KYC norms. After receipt of application by the designated depository participant, FPIs shall endeavor to dispose of the application for grant of certificate of registration within 30 days. SEBI added that all existing FIIs and Sub Accounts may continue to buy, sell or otherwise deal in securities under the FPI regime.

SEBI has divided FPIs into three categories based on their risk profile. The Category I FPIs include lowest risk entities such as foreign governments and government related foreign investors. Category II FPIs include appropriately regulated broad based funds and regulated entities, university related endowments and pension funds etc. Meanwhile, Category III FPIs include all others not eligible under the first two categories.India VIX, a gauge for markets short term expectation of volatility ended flat at its previous close of 16.32 on Tuesday. (Provisional)

The CNX Nifty gained 10.50 points or 0.17% to settle at 6,172.75. The index touched high and low of 6,192.10 and 6,160.35 respectively. Out of the 50 stocks on the Nifty, 28 ended in the green, while 22 ended in the red.

The major gainers of the Nifty were Coal India up 4.92%, Cipla up by 2.24%, Gail up by 2.41%, Bank of Baroda up by 2.14% and Tata Power up by 1.95%. The key losers were Axis Bank down by 2.12%, BPCL down by 2.09%, L&T down by 2.03%, Ranbaxy down by 1.54% and BHEL down by 1.48%. (Provisional)

The European markets were trading in red; France’s CAC 40 was down 0.16%, Germany’s DAX was down 0.18% and UK’s FTSE 100 lost 0.41%.