Markets continue to trade flat in afternoon session

Indian equity benchmarks continue to trade near neutral line with negative bias in afternoon session amid sluggish global cues and selling witnessed in oil companies such as Reliance and ONGC as Election Commission asked the government to defer the price hike, which was to take effect on 1 April. However, market losses remain capped as investors’ sentiments got some support after Economic Affairs Secretary Arvind Mayaram’s statement that the Finance Ministry expects economic growth to further improve in the next fiscal on the back of better macro-economic fundamentals. Gains in power, consumer durable and metal stocks provided support to the markets. Further, FIIs continue to remain net buyer of Indian stock and bought shares worth Rs 1,465.62 crore in the previous session. While, IT, teck and healthcare stocks remained under pressure due to appreciation in rupee value against the dollar.

Shares of Non-banking finance company Capital First has surged 17% to around Rs 183, also its 52-week high on back of heavy volumes as it has called an Extra-ordinary General Meeting on Friday, March 28, 2014 to take shareholders approval for issue and allotment of equity shares on preferential basis. On the other hand, Bharti Infratel has dipped 5% to around Rs 188 in early morning trades on back of heavy volumes on exchanges.

On global front, Asian equity indices were trading in red with Nikkei 225 down by 0.36% and Hang Seng down by 0.35%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,550 and 22,000 levels respectively. The market breadth on BSE was negative, out of 2,469 stocks traded, 1,057 stocks advanced, while 1,266 stocks declined on the BSE.

The BSE Sensex is currently trading at 22,005.97 down by 49.51 points or 0.22% after trading in a range of 22,047.99 and 21,916.87. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index up by 0.12%.

The gaining sectoral indices on the BSE were Power up by 1.06%, Consumer Durables up by 0.97%, Metal up by 0.51%, Capital Goods up by 0.48% and FMCG up by 0.38%. While, Teck down by 0.51%, IT down by 0.45%, Healthcare down by 0.11% and Auto down by 0.01% were the losing indices on BSE.   

The top gainers on the Sensex were BHEL up by 1.62%, Gail India up by 1.53%, Tata Steel up by 1.47%, HDFC up by 1.05% and NTPC up by 0.70%. On the flip side, RIL down by 2.86%, ONGC down by 2.18%, Wipro down by 1.43%, Bharti Airtel down by 1.22% and M&M down by 0.86%.

Meanwhile, foreign investments into Indian markets through Participatory Notes (P-Notes), surged  to its highest level in three months at around Rs 1.73 lakh crore in February, as compared to Rs 1.63 lakh crore in the previous month.

Investments into Indian markets (equity, debt and derivatives) via P-Notes have been rising over the past few months mainly on hopes of a stable government after general election starting next month. Further, the macro-economic factors like moderation in India’s current account deficit as well as easing inflation can also be attributed for increase in foreign investments in the country.   

P-Notes has become a preferred route of investment  for high net worth individuals (HNIs), hedge funds and other foreign institutions as it allows them to invest in Indian markets through registered Foreign Institutional Investors (FIIs), which saves their time and costs associated with direct registrations. Investment through P-Notes have been accounting for around 15-20 percent of the total FII holdings in India since 2009. Earlier, in 2008, P-Notes used to account for more than 50 percent of the total FII investments but their share has fallen after SEBI tightened the disclosure norms and other regulations for P-Notes investments.

During February 2014, FIIs, the key drivers of Indian markets, have pumped in around Rs 1,400 crore in the Indian equity market and Rs 11,337 crore in the debt market. Increasing foreign investment in the country has also brought stability in the rupee value against the dollar.

 The CNX Nifty is currently trading at 6,578.05 down by 5.45 points or 0.08% after trading in a range of 6,591.50 and 6,544.85. There were only 31 stocks advancing against 19 declining on the index.

The top gainers of the Nifty were BPCL up by 3.24%, Power Grid up by 2.08%, GAIL up by 1.77%, BHEL up by 1.70% and Tata Steel up by 1.57%. On the flip side, Reliance down by 3.02%, ONGC down by 2.20%, Wipro down by 1.37%, Bharti Airtel down by 1.21% and M&M down by 1.19% were the major losers on the index.

Asian equity indices were trading in red; Hang Seng down by 0.35% to 21,769.66, Shanghai Composite down by 0.08% to 2,064.57, Straits Times was down by 0.26% to 3,105.13, Jakarta Composite down by 0.42% to 4,700.11, Nikkei 225 down by 0.36% to 14,423.80. While, Taiwan Weighted was up by 0.98% to 8,689.30.