Benchmarks turn choppy after Election Commission announces poll dates

Indian equity benchmarks have come off morning highs and turned choppy as profit booking emerged at higher levels with heavyweight like ITC, RIL and HDFC leading the losses.  Market participants remained on sidelines after Election Commission announcing Lok Sabha polls dates. Lok Sabha polls process will take place in 9 phases beginning April 7 and will continue till May 12. However, losses on down -side remained capped, as sentiments got some support from the firm trend on other Asian bourses, tailing overnight gains on Wall Street after Ukraine tensions eased.

Back home, traders were buying, Metal, Healthcare and Teck stocks, while selling was seen in Consumer Durables, Power and Oil & Gas. Banking stocks too remained on buyers’ radar, as Finance Minister P Chidambaram will meet chief executives of public sector banks for a quarterly performance review. In the meeting, besides capital adequacy, Chidambaram is expected to discuss the NPA situation and recovery measures taken by banks, status of stalled projects as well as credit flow to new projects.

The market breadth on BSE remains positive with advances to declines in the ratio of 1284:674. BSE Sensex and NSE Nifty were comfortably trading near their psychological 21,000 and 6,300 levels respectively.

The BSE Sensex is currently trading at 21256.00 up by 46.27 points or 0.22% after trading in a range of 21333.20 and 21221.87. There were 17 stocks advancing against 13 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.83% and Small cap index gained 0.53%.

The top gaining sectoral indices on the BSE were, Metal up by 1.17%, Healthcare up by 1.07%, Teck up by 0.80%, IT up by 0.78% and Realty up by 0.74%, while Consumer Durables down by 1.41%, Power down by 0.19% and Oil & Gas down by 0.02% were the only losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 1.92%, Dr Reddys Lab up by 1.42%, Coal India up by 1.40%, ICICI Bank up by 1.28% and Maruti Suzuki up by 1.23%. On the flip side, Tata Power was down by 2.19%, HDFC was down by 0.86%, Bharti Airtel was down by 0.80%, NTPC was down by 0.75%, and Mahindra & Mahindra was down by 0.71% were the top losers on the Sensex.

Meanwhile, Commerce and Industry Minister Anand Sharma has expressed confidence that the Cabinet will soon take a view on liberalising Foreign Direct Investment (FDI) policy in railways sector.  Currently, there is a complete ban on any kind of FDI in Indian railways sector except mass rapid transport systems.

The Department of Industrial Policy and Promotion (DIPP) has proposed to allow 100 percent FDI under automatic route in high speed train systems, suburban corridors, high speed tracks and freight lines connecting ports and mines. Further, DIPP has also proposed easy exit conditions from railway projects like allowing developers to exit before the three year lock in period. It will be first-to-last mile connectivity between ports, coal mines to the existing railway freight stations and will smooth the movement of raw materials from mines to ports.

Presently, Indian industrial development and exports have been suffering due to poor infrastructure, hampering output and raises the cost of production. The move is likely to provide adequate funds to the railway ministry, which can play an important role in providing a reliable transport facility necessary for promoting industrial growth in the country.

However, the Home Ministry and the Department of Economic Affairs (DEA) have expressed concerns on proposal for rising FDI in this sensitive sector, citing reasons like security concerns and investments from China which is India’s main rival on the economic and military fronts, with unresolved border disputes between the two nations.

The CNX Nifty is currently trading at 6,314.25 up by 16.30 points or 0.26% after trading in a range of 6,333.90 and 6,299.75. There were 33 stocks advancing against 17 decliners on the index.

The top gainers of the Nifty were Bank Baroda up by 2.41%, IDFC up by 2.21%, TATA Steel up by 1.89%, BPCL up by 1.70% and Dr. Reddy's Laboratories up by 1.53%. On the flip side, Tata Power down by 2.19%,  Ambuja Cements down by 1.60%, Cairn down by 0.97%, NTPC down by 0.88% and HDFC down by 0.83% were the top losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng increased 41.75 points or 0.18% to 22,699.38, Jakarta Composite rose by 49.20 points or 1.07% to 4,650.49, KLSE Composite strengthened by 2.43 points or 0.13% to 1,828.89, Nikkei 225 surged by 232.72 points or 1.58% to 14,954.66, Straits Times gained 5.27 points or 0.17% to 3,109.98, KOSPI Composite jumped 18.13 points or 0.93% to 1,972.24 and Taiwan Weighted was up by 91.32 points or 1.07% to 8,645.86. On the flip side, Shanghai Composite was down by 5.07 points or 0.24% to 2,066.41.