Domestic markets trade slightly lower tracking weak global cues

Indian equity benchmarks are trading slightly in the red in early deals on Thursday, tracking feeble global cues. Overnight, the US markets made a mixed closing despite payroll processor ADP reporting that private sector employment increased by more than expected in the month of December. Moreover, most of the Asian equity benchmarks were trading in the red at this point of time led by Japanese Nikkei which edged lower by over one and a half percent as stronger yen weighed on export-oriented stocks. However, Chinese Shanghai gained by over quarter a percent as data showed that inflation rate slowed in China, the world’s second-largest economy.

Back home, some cautiousness also came in from currency front with Indian rupee trading lower at 62.23 compared to its close of 62.07 on Wednesday, tracking broad gains in the dollar versus major currencies. However, losses remained capped as some support came in from Economic Affairs Secretary Arvind Mayaram's statement that 2013-14 is likely to end with an economic growth of about 5 percent on the back of spurt in investment activities in the latter half of the fiscal. Meanwhile, shares of Gold finance companies like Muthoot, Manappuram Finance traded jubilantly on the decision of Reserve Bank of India (RBI) to allow finance companies to offer loans of up to 75% of the value of pledged gold as against 60% earlier.

On the sectoral front, metal witnessed the maximum gain in trade followed by software and technology, while banking, fastmoving consumer goods and realty remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the market breadth on the BSE was evenly divided; there were 626 shares on the gaining side against 621 shares on the losing side while 54 shares remain unchanged.

The BSE Sensex opened at 20755.73; about 26 point higher compared to its previous closing of 20729.38, and has touched a high and a low of 20778.13 and 20669.80 respectively. The index is currently trading at 20703.12, down by 26.26 points or 0.13%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a strong start with 48.12 % stocks advancing against 47.73 % declines. The broader indices were trading mixed; the BSE Mid cap down by 0.05% and Small cap indices trading up by 0.05%.

The top gaining sectoral indices on the BSE were, Metal up by 0.77%, IT up by 0.35%, Teck up by 0.30%, PSU up by 0.24% and Healthcare up by 0.21%, while Bankex down by 0.83%, FMCG down by 0.75%, Realty down by 0.72%, Capital Goods down by 0.35% and Consumer Durables down by 0.19% were the top losers on the sectoral index. 

The top gainers on the Sensex were SSLT up by 2.69%, Coal India up by 1.30%, NTPC up by 1.27%, Dr Reddys Lab up by 0.99% and BHEL up by 0.98%. On the flip side, Axis Bank was down by 1.81%, Gail India was down by 1.34%, Hindalco Industries was down by 1.08%, SBI was down by 1.03% and ITC was down by 0.99% were the top losers on the Sensex.

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.

The CNX Nifty opened at 6,181.70; about 7 points higher as compared to its previous closing of 6,174.60, and has touched a high and a low of 6,188.05 and 6,154.10 respectively. The index is currently trading at 6,157.45, down by 17.15 points or 0.28%. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were SSLT up by 2.51%, Coal India up by 1.35%, NTPC up by 1.31%, Jindal Steel up by 1.03% and BHEL up by 0.98%. On the flip side, JP Associate down by 2.55%, Axis Bank down by 1.79%, Bank of Baroda down by 1.68%, Hindalco down by 1.30% and SBI down by 1.28% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng dipped 26.72 points or 0.12% to 22,969.87, Nikkei 225 dropped 247.71 points or 1.54% to 15,873.74, Straits Times slipped 2.56 points or 0.08% to 3,148.09, Seoul Composite shed 2.51 points or 0.13% to 1,956.45 and Taiwan Weighted was down by 26.78 points or 0.31% to 8,529.23.

On the flip side, Shanghai Composite rose 7.26 points or 0.36% to 2,051.60, Jakarta Composite gained 8.70 points or 0.21% to 4,209.29 and KLSE Composite was up by 1.12 points or 0.06% to 1,832.42.