Benchmarks hold head above water in range-bound session; Sensex trades past 21,250 mark

In the highly range-bound session of trade, Indian equity markets are managing to keep their head above water, with little gains of over one tenths of a percent thanks to supportive global set-up. Off day’s high, Sensex and Nifty, are holding above the crucial 21,250 and 6,300 levels respectively. Meanwhile, broader indices too paring gains are trading above quarter of a percent. Lingering caution over interest staying higher for a long time after a central bank panel suggested targeting consumer price inflation, mainly has capped bourses’ gain.

Reserve Bank of India (RBI) panel on Tuesday underscored that it should set an eventual target of 4 per cent for consumer price inflation (CPI), with a plus or minus 2 per cent band. Further, the panel added that it should aim to lower CPI, currently at 9.87 per cent, to 8 per cent over the next 12 months and to 6 per cent in the next 24 months. On the global front, Asian share markets gained slightly on Wednesday, led by gains in Chinese shares after China's central bank poured funds into money markets, easing immediate credit strains ahead of the lunar New Year.

Closer home, while most of the sectoral indices are trading in green, stocks from FMCG, Realty and Capital Goods counters are the laggards of the session. On the flip side, Healthcare, Metal and Power counters witnessing strong demand are the top performers of the session. The overall market breadth on BSE is in the favour of advances which are outnumbering declines in the ratio of 1009:790; while 33 shares remained unchanged.

The BSE Sensex is currently trading at 21286.12, up by 35.00 points or 0.16% after trading in a range of 21,300.90 and 21,168.43. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices pared gains; the BSE Mid cap index was up by 0.30%, while Small cap index up by 0.24%.

The gaining sectoral indices on the BSE were Healthcare up by 1.23%, Metal up by 0.75%, Power up by 0.57%, TECK up by 0.37%, and IT up by 0.20%. While, FMCG down by 0.84%, Realty down by 0.04% and Capital Goods down by 0.13% were the only losing indices on BSE.  

The top gainers on the Sensex were Sun Pharma up by 2.07%, Bharti Airtel up by 1.77%, Tata Steel up by 1.64%, NTPC up by 1.61% and Cipla up by 1.55%. On the flip side, ITC down by 1.37%, Hindustan Unilever down by 0.91%, SBI down by 0.70%, Hero Motocorp down by 0.55%, and ONGC down by 0.42%.

Meanwhile, in a major revamp of foreign investment regime, overseas inflows is likely to be divided into two categories-Foreign Portfolio Investment (FPI) and Foreign Direct Investment (FDI)-with a minimum composite cap of 49%. The proposal of the draft recommendations by the Arvind Mayaram panel has recommended an aggregate automatic limit of 24 per cent of FPI, which may be raised up to the extent of FDI permitted under the automatic route. As per the proposal, an investor will have option to invest either as FPI or FDI, but not both.

Further, the individual investment limit under the FPI, which will comprise Qualified Foreign Investors (QFIs) and Foreign Institutional Investors (FIIs), has been proposed up to 10 percent of the paid up capital in a listed company and the limit up to 10% would be treated as FDI. However, for the companies which are not listed, FPI limit would be deemed as FDI and separate guidelines would be issued for investments by non-resident Indians. In its other suggestion the panel has said that portfolio investment by a single investor should not exceed 10 per cent in the initial public offering (IPO), or follow-on public offering (FPO), of a listed or to be listed company.

The government has set up a four member committee under Economic Affairs Secretary Mayaram to define FDI and FII and remove the ambiguity between the two terms. The Committee is expected to finalize its report by end of this month. Further, the recommendations, suggested by the committee will be applicable with prospective effect and hence will not impact the existing investments

The CNX Nifty is currently trading at 6,322.00, up by 8.20 points or 0.13% after trading in a range of 6,326.70 and 6,287.45. There were 25 stocks advancing against 25 declining on the index.

The top gainers of the Nifty were Lupin up by 2.58%, Sun Pharma up by 2.11%, Bharti Airtel up by 1.75% and Cipla up by 1.72%. On the flip side, Asian Paints down by 2.14%, ITC down by 1.53%, Ultratech Cement down by 1.16%, Grasim down by 1.10% and JP Associates down by 1.03% were the major losers on the index.

most of  the Asian equity indices were trading in green; Seoul Composite up by 0.33%, Shanghai Composite up by 1.93%, Nikkei 225 up by 0.16%, Hang Seng up by 0.25% and Taiwan Weighted up by 0.30%. While, Jakarta Composite down by 0.06%, Straits Times down by 0.01%  and KLSE Composite down by 0.15%.