Benchmarks put up a tough face of resilience amidst global uncertainties

Despite lacking any significant upside trigger, benchmark frontline indices showcasing a tough face of resilience have added additional ground in comparison to early deals. However, the anticipation of easing inflation after shoddy IIP data, has definitely aided equity markets in clinching some gains. Market participants largely anticipate November Inflation to ease to 9.04% from 9.73% in the month before.

Indian equity markets showcasing diverse trend are outperforming global indices for second consecutive session. Finding little inspiration from the U.S. Federal Reserve's policy meeting, Asia pacific markets are all showing subdued trend.

Regional markets took their cue from Wall Street's drop Tuesday after the Fed left its policy rate unchanged and decided against any further additional stimulus measures for now, disappointing some who had expected a hint of further steps in the near future. News of German opposition for raising the Euro 500 billion lending limit for the planned European Stability Mechanism also weighed on sentiment, as investors fretted about the divisions in Europe that's preventing a credible fix to the region's debt woes.

Back home, stocks from Bankex, Capital Goods and Fast Moving Consumer Goods counters contributing the most to the benchmark’s gains, were topping the list of gainers on BSE Sectoral front, however, stocks from Power and Oil & Gas remained the weak spell of the trade. 30 share barometer index- Sensex- on BSE accumulating over 50 points was trading above 16,000 psychological mark. Similarly, broadly followed 50 share index-nifty-too showcasing optimistic moves, was trading above 4800 mark. The broader indices too imitating the style and pattern of benchmark gained additional traction and were trading above half a percent. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1191:770, while 95 shares remained unchanged.

The BSE Sensex is currently trading at 16,082.18, up by 79.67 points or 0.50%. The index has touched a high and low of 16,085.52 and 15,924.21 respectively.  There were 20 stocks advancing against 10 declining one’s on the index.

The broader indices too gained some traction in line with frontline benchmark indices; the BSE Mid cap and small cap indices gained 0.52% and 0.51% respectively.

Top gaining sectoral indices on the BSE were, Bankex up by 1.22%, CG up by 1.12%, FMCG up by 0.78%, Auto up by 0.59% and Metal up by 0.50%. While, Power down by 0.23%, Oil & Gas down by 0.07% were the losers on the index.

The top gainers on the Sensex were SBI up by 2.28%, Sun Pharma up by 2.11%, Bharti Airtel up by 1.76%, Jaiprakash Associates up by 1.74 and L&T up by 1.41%. On the flip side, NTPC down by 1.32%, Coal India down by 0.78%, Tata Power down by 0.72%, HDFC down by 0.68% and Tata Steel down by 0.65% were the top losers on the Sensex.

Meanwhile, the parliamentary standing committee on finance, headed by former finance minister Yashwant Sinha has rejected all the important changes proposed in the Insurance Laws (Amendment) Bill 2008, which also includes the key reform to allow 49% Foreign Direct Investment (FDI) in the sector.

The parliamentary panel also discarded the proposal to allow unregistered foreign entities to operate in Special Economic Zones (SEZs) on grounds that it will place domestic capital at risk of being taken out of the country and will be biased against Indian insurers. It also rejected the proposal of 49% FDI in sector on grounds that the alternate route for meeting the capital needs of the sector has not been seriously explored.

The standing committee on allowing foreign insurers in SEZs observed that it will not serve the rationale of developing a well regulated insurance market in India. The committee also said that foreign banks, which operate under the supervision of the RBI, are not allowed any special dispensation in SEZs.

The government’s proposal was also opposed by the insurance regulator - Insurance Regulatory and Development Authority (IRDA) and General Insurers Public Sector Association (GIPSA) on grounds that the foreign insurers would be at an advantage over their domestic counterparts in the matter of regulations.

The standing committee also rejected the proposal to halve the minimum paid up capital required to start exclusive health insurance business to Rs 50 crore. In its report, parliamentary panel said the amount may be inadequate as an insurance company needs to be fully equipped with modern infrastructure and other facilities.

The parliamentary panel has also pointed that stipulating the capital requirement of insurance businesses is a policy measure, which may have implications on the share-holding pattern of the insurer and hence needs to be considered by Parliament.

The parliamentary panel further rejected the proposal to empower the insurance companies to appoint agents and do away with the system of licensing of agents by the regulator IRDA. On this, panel said that the measure is 'inappropriate and fraught with the danger of leading to ineffective regulation of the profession, particularly in instances of unscrupulous act on the part of the agents as also insurance companies.'

In its report, the parliamentary panel said that for enabling proper regulation of health insurance sector, it expects the insurance regulator, IRDA, to play a pro-active role towards evolving a common procedure for availing cashless facility and standardizing the rates and charges for different hospital procedures, treatment guidelines, forms and formats for settlement of claims. 

The S&P CNX Nifty is currently trading at 4,824.70, up by 24.10 points or 0.50%. The index has touched a high and low of 4,830.10 and 4,777.25 respectively. There were 33 stocks advancing against 15 declining one’s on the index, while two stocks remained unchanged.

The top gainers of the Nifty were Jaiprakash Associates up by 2.73%, SBI up by 2.60%, Sun Pharma up by 2.20%, Bharti Airtel up by 2.07% and Cairn India up by 1.85%. On the flip side, NTPC down by 1.71%, BPCL down by 1.14%, Siemens down by 0.94%, Grasim down by 0.80% and Ranbaxy down by 0.79%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 0.13%, Hang Seng slipped 0.18%, Jakarta Composite slid 0.24%, Nikkei 225 lost 0.55%, Straits Times surrendered 0.19%, Seoul Composite descended 0.47%.

On the flip side, Taiwan Weighted up by 0.20% was the lone gainer amongst the Asian pack.