Firm trade prevails; IT, TECK pulls

Indian equities added gains to continue firm trade in the late afternoon session on account of buying in frontline counters. The market was trading on optimistic note on hopes that the Reserve Bank of India (RBI) will keep interest rates on hold for a second consecutive month at its policy review on January 28 after data on Friday showed industrial output in November unexpectedly contracted, while consumer prices data due later in the day is expected to show easing inflation. Traders were seen piling positions in IT, TECK and Oil & Gas stocks while selling was witnessed in Health Care, Metal and Power sector stocks. In scrip specific development, Infosys was trading firm as brokerage houses raised target price on the stock after it announced December quarter earnings. Bharat Forge was trading in green after the company’s subsidiary sold its 51.85 percent stake in its Chinese JV operations to its JV partner, China FAW for Rs 175 crore.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on a mixed note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was negative in the ratio of 1223:1338 while 154 scrips remained unchanged.

The BSE Sensex is currently trading at 21033.68, up by 275.19 points or 1.33% after trading in a range of 21,066.08 and 21,850.54. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mixed; with BSE Mid cap index edged lower by 0.10% and Small cap index nudging up by 0.27%.

The gaining sectoral indices on the BSE were IT up by 2.47, TECK up by 2.02%, Oil and Gas up by 1.84%, Bankex up by 1.32% and Capital Goods up by 1.09%. While, Healthcare down by 1.36%, Metal down 0.35%, and Power down by 0.29% were the only losing indices on BSE.  

The top gainers on the Sensex were Infosys up by 3.30%, TCS up by 2.79%, ONGC up by 2.52%, RIL up by 2.23% and L&T up 1.99%.

On the flip side, Tata Power down by 2.74%, Sun Pharmaceuticals down by 1.80%, Maruti Suzuki down by 1.43%, Hindalco Industries down by 1.09% and SSLT down by 0.84%. 

Meanwhile, in a move to attract foreign investments through Foreign Portfolio Investors (FPI) framework rather than participatory notes (P-notes) route, the Securities and Exchange Board of India (SEBI) has tightened the rules for issue of P-notes, which are currently used by foreign investors to invest in the Indian markets without registering with SEBI.

Bearing in mind that Indian regulators including SEBI do not have direct jurisdiction over foreign instruments such as P-notes, the market regulator is making foreign investors to invest directly into India by registering as FPIs. Although, SEBI had earlier barred Category-III FPIs from issuing P-notes, it has now barred certain unregulated entities under Category-II from issuing P-notes. So far, unregulated entities could issue P-notes if their investment manager was regulated. However, SEBI has allowed only regulated entities to issue/subscribe to P-notes, ensuring that such entities can be easily reached through foreign regulators. Until November 2013, the notional value of P-notes on equity, debt and derivatives stood at Rs 1.82 lakh crore, or 13 percent of assets under custody of foreign institutional investors.

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 is currently trading at 6,242.25, up by 70.80 points or 1.15% after trading in a range of 6,259.00 and 6,189.55. There were 32 stocks advancing against 18 declining on the index.

The top gainers of the Nifty were Infosys up by 3.23%, TCS up by 2.92%, HCL Technologies up by 2.53%, ONGC up by 2.45% and DLF up by 2.11%. On the flip side, Ranbaxy down by 7.75%, Lupin down by 2.96%, Tata Power down by 2.80%, JP Associates down by 2.29% and Sun Pharma down by 1.75% were the major losers on the index.

The Asian equity indices were trading mostly in green; Seoul Composite up by 0.54%, KLSE Composite up by 0.49%, Taiwan Weighted up by 0.43%, Jakarta Composite up by 3.16% and Hang Seng up by 0.19% while, Shanghai Composite and Straits Times were down by 0.19% and 0.31% respectively.

The Japanese market remained closed on account of ‘Coming of Age Day’ holiday. 

The European markets were trading on a mixed note; France’s CAC 40 was up 0.18%, Germany’s DAX lost 0.06% and UK’s FTSE 100 gained 0.10%.