Benchmarks continue to trade firm; Nifty holds 6,600 level

Indian bourses continued to trade firm in afternoon session after hitting fresh all time high in early morning trades on the back strong inflows from foreign institutional investors and supportive cues from global peers. There was not even a single instance of profit booking as major indices gained and further consolidated on account of buying witnessed in rate sensitive stocks amid report that Reserve Bank of India (RBI) might keep rates unchanged in its monetary policy. Investors were seen piling up position in metal, banking, realty and oil and gas stocks. The foreign institutional investors bought shares worth Rs 1,465.62 crore in the previous session. Investors’ sentiments got some boost as the Reserve Bank of India (RBI) relaxed foreign portfolio investment norms by putting in place an operating framework and easier registration process. However, there was some weakness in the defensive sectors such as IT, teck and healthcare owing to the appreciation in rupee value against the dollar.

Tata Motors was trading higher by over 2% at around Rs 399 on reports of price hike of commercial vehicles in April. Unity Infraprojects has rallied 10% to Rs 22.45. On the other hand, ITC has dipped 2% to Rs 355 on account of profit booking after recent upmove.

On global front, Asian equity indices were trading in green with Nikkei 225 up by 0.16% and Hang Seng up by 1.03%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,600 and 22,000 levels respectively. The market breadth on BSE was positive, out of 2,472 stocks traded, 1,276 stocks advanced, while 1,050 stocks declined on the BSE.

The BSE Sensex is currently trading at 22,132.86 up by 77.65 points or 0.35% after trading in a range of 22,172.10 and 22,110.71. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.83%, while Small cap index up by 0.70%.

The gaining sectoral indices on the BSE were Metal up by 2.49%, Realty up by 1.44%, Oil and Gas up by 1.29%, Auto up by 1.06% and Capital Goods up by 1.05%. While, FMCG down by 1.30%, Healthcare down by 0.53%, IT down by 0.25%, and Teck down by 0.12% were the losing indices on BSE.   

The top gainers on the Sensex were Hindalco Inds up by 3.77%, Tata Motors up by 2.64%, Coal India up by 2.54%, SSLT up by 2.43% and Gail India up by 2.16%. On the flip side, Hero Motocorp down by 1.85%, Dr Reddy’s Lab down by 1.81%, ITC down by 1.67%, TCS down by 1.17% and HDFC Bank down by 0.66%.

Meanwhile, with an aim to attract foreign investment in the country, the Reserve Bank of India (RBI) relaxed foreign portfolio investment norms by put in place an operating framework and easier registration process. The central bank notified that the portfolio investors registered in accordance with SEBI guidelines shall be called Registered Foreign Portfolio Investor (RFPI) and introduced a framework for investment under a new Foreign Portfolio Investment scheme.

As per the RBI’s new guidelines, RFPI may purchase and sell shares and convertible debentures of Indian companies through registered broker on recognised stock exchanges in India as well as purchase these securities in terms of relevant SEBI guidelines which are offered to public. Such investors would also be eligible to invest in government securities, exchange traded derivative contracts on the stock exchanges and corporate debt subject to limits specified by the RBI and SEBI from time to time. RBI’s notification, which is effective from March 19, further added that RFPI may offer cash or foreign sovereign securities with AAA rating or corporate bonds or domestic Government Securities, as collateral to the recognised Stock Exchanges for their transactions in the cash as well as derivative segment of the market.  However, investment made by that FII/QFI in accordance with the regulations prior to registration as RFPI shall continue to be valid and taken into account for computation of aggregate limit.

Over the past few months, investments into Indian markets (equity, debt and derivatives) have been rising 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. 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. Rising foreign investment in the country has also brought stability in the rupee value against the dollar.   

The CNX Nifty is currently trading at 6,616.10 up by 26.35 points or 0.40% after trading in a range of 6,623.25 and 6,607.55. There were only 38 stocks advancing against 12 declining on the index.

The top gainers of the Nifty were Hindalco Inds up by 3.77%, IDFC up by 3.31%, Jindal Steel up by 2.93%, Tata Motors up by 2.70% and GAIL up by 2.54%. On the flip side, ITC down by 1.98%, Dr Reddy’s Lab down by 1.88%, Hero Motocorp down by 1.83%, TCS down by 1.28% and Lupin down by 1.12% were the major losers on the index.

Asian equity indices were trading in green; Hang Seng up by 1.03% to 21,957.15, Straits Times was up by 1.35% to 3,145.92, Jakarta Composite up by 0.42% to 4,722.64, Nikkei 225 up by 0.16% to 14,446.46, Taiwan Weighted was up by 0.98% to 8,737.27. While, Shanghai Composite down by 0.14% to 2,064.07