Benchmarks continue to trade marginally lower in late morning

Benchmarks pared early gains and were trading marginally lower as investors turned cautious ahead of November industrial production data tomorrow and inflation numbers due for release on Monday. Sentiments got dampened as the rupee continued to trade weak at 62.23 compared to its close of 62.07 on Wednesday, after the US dollar firmed up against 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.

On the global front, 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, traders were buying, Metal, Healthcare and Power while, selling was seen in Bankex, FMCG and Realty on the BSE. 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.

The market breadth on BSE remains positive with advances to declines in the ratio of 966:773. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,700 and 6,150 levels respectively. The BSE Sensex is currently trading at 20721.47 down by 7.91 points or 0.04% after trading in a range of 20778.13 and 20669.80. There were 15 stocks advancing against 15 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.17% and Small cap index gained 0.35%.

The top gaining sectoral indices on the BSE were, Metal up by 0.95%, Healthcare up by 0.56%, Power up by 0.47%, Oil & Gas up by 0.44%, and TECK up by 0.36%, while Bankex down by 0.84%, FMCG down by 0.59%, Realty down by 0.49%, Capital Goods down by 0.34% and Consumer Durables down by 0.06% were the top losers on the sectoral index. 

The top gainers on the Sensex were SSLT up by 3.03%, NTPC up by 1.58%, Dr Reddys Lab up by 1.43%, ONGC up by 1.32%, and Coal India up by 1.26%. On the flip side, Axis Bank was down by 1.65%, Gail India was down by 1.26%, Hindalco Industries was down by 1.04%, Wipro was down by 0.92% and SBI was down by 0.87% were the top losers on the Sensex.

Meanwhile, in the view of moderation in the growth of gold loan portfolios of Non-Banking Financial Companies (NBFCs) in the recent past, the Reserve Bank of India (RBI) has allowed NBFCs to lend against gold jewellery up to 75 percent of Loan-To-Value (LTV) of metal from 60 percent at present.

The RBI further noted that the value of the jewellery for the purpose of determining the maximum permissible loan amount will be only the intrinsic value of the gold content excluding the other cost elements such as making charges. Further, the central bank clarified the need to give a certificate on the purity of gold cannot be dispensed. The certified purity should be applied for determining the maximum permissible loan and the reserve price for auction.

The NBFCs can include suitable caveats to protect themselves against disputes on redemption. Earlier, NBFCs had raised concerns over certification of the purity of gold jewellery accepted as collateral and underscored that under the current practices it was possible only to arrive at the proximate purity of the gold and such a certification could lead to dispute with the borrowers.

The CNX Nifty is currently trading at 6,168.60 down by 6.00 points or 0.10% after trading in a range of 6,188.05 and 6,154.10. There were 22 stocks advancing against 28 stock declines on the index. 

The top gainers of the Nifty were SSLT up by 3.11%, BPCL up by 2.25%, Ranbaxy up by 1.58%, NTPC up by 1.58% and Jindal Steel up by 1.53%. On the flip side, JP Associate down by 2.26%, Axis Bank down by 1.63%, Indusind Bank down by 1.24%, GAIL down by 1.17% and Wipro down by 1.16% 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.