Benchmarks trade lower in early deals

Indian equity benchmarks are trading in the red in early deals on Thursday as investors opted to book their profit after a six-day consecutive rally. However, frontline gauges managed to hold on to their 22,500 (Sensex) and 6,700 (Nifty) levels. Meanwhile, shares of banking license hopefuls declined, as RBI after a gap of a decade and from 25 contenders has granted 'in-principle' approval to only two applicants, State-run IDFC and Kolkata-based microfinance firm Bandhan Financial Services. Select sugar stocks continue their upmove on report of industry body ISMA, which said that the country's sugar production has dropped by 7 percent to 21.5 million tonnes in the first six months of the current marketing year due to lower output in key producing states.

On the global front, the US markets extended gains on the back of the release of some relatively upbeat economic data. Though, the trade remained lackluster throughout the day but trader applauded private-sector jobs data as well as solid factory orders numbers. The Asian markets too were trading mostly in the green at this point of time, as the Japanese yen weakened to a two-month low and China’s government announced stimulus policies to support growth.

Back home, on the sectoral front, metal witnessed the maximum gain in trade followed by consumer durables and healthcare, while capital goods, banking and fast moving consumer goods remained the top losers on the BSE sectoral space. The broader indices too were trading cautiously, while the market breadth on the BSE was positive; there were 866 shares on the gaining side against 766 shares on the losing side while 74 shares remain unchanged.

The BSE Sensex opened at 22598.19; about 46 points higher compared to its previous closing of 22551.49, and touched a high and a low of 22620.65 and 22505.79 respectively. The index is currently trading at 22551.49, down by 37.08 points or 0.16%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a strong start with 48.78% stocks advancing against 46.89% declines. The broader indices too were trading mixed; the BSE Mid cap index down was by 0.17% and Small cap gained 0.11%. 

The top gaining sectoral indices on the BSE were, Metal up by 1.48%, Consumer Durables up by 1 %, Healthcare up by 0.41%, Auto up by 0.09% and IT up by 0.03%, while Capital Goods down by 0.79%, PSU down by 0.78%, Bankex down by 0.64%, FMCG down by 0.73% and Power down by 0.50% were the top losers on the sectoral index.

The top gainers on the Sensex were Hindalco up by 1.80%, SSLT up by 1.61%, Dr Reddys Lab up by 1.39%, Sun Pharma up by 0.97% and Tata Steel up by 0.89%. On the flip side, L&T was down by 1.69%,  SBI was down by 1.11%, Axis Bank was down by 1.08% and BHEL was down by 0.90% were the top losers on the Sensex.

Meanwhile, Stepping up efforts to make the Indian markets more attractive to global investors, the Reserve Bank of India (RBI) has proposed to allow overseas investors to hedge their currency risk in local exchanges, a move which will lower entry costs for foreigners and help to improve risk mitigating environment in the country. At present, the RBI is in final discussion with market regulator Securities and Exchange Board of India (Sebi) to finalise the proposal.

The central bank proposed to permit foreign investors to hedge the coupon receipts on domestic bond holdings for up to the next 12 months. Further, to flush out yield-chasing, the RBI has planned to bar short-term investors from investing in treasury bills, where most of the foreign money has rushed in recently. The RBI’s notification further stated that in order to encourage longer-term flows and reduce volatility foreign portfolio investments in government securities will henceforth be permitted only in dated securities of maturity more than one year.

The RBI further added that any investment limit for overseas investors vacated at the shorter end will be available at longer maturities, so overall foreign portfolio investor (FPI) limits will not be diminished. So far this year, foreign investors have invested up to $5.76 billion in Indian securities particularly short-term treasury bills. Foreign investors can invest up to $30 billion in government papers, out of which investment limit for treasury bills is $5.5 billion. Overseas investors have exhausted 87.16% of their treasury bills limit.

The CNX Nifty opened at 6,772.05; about 19 point higher as compared to its previous closing of 6,752.55, and has touched a high and a low of 6,776.75 and 6,734.80 respectively. The index is currently trading at 6,737.60, down by 14.95 points or 0.22%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were IDFC up by 2.46%, Jindal Steel up by 1.86%, Hindalco up by 1.76%, SSLT up by 1.51% and NMDC up by 1.48%. On the flip side, IndusInd Bank down by 1.76%, Bank of Baroda down by 1.74%, PNB down by 1.64%, L&T down by 1.62% and BPCL down by 1.40% were the top losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng increased 87.78 points or 0.39% to 22,611.72, Jakarta Composite advanced by 19.54 points or 0.40% to 4,889.75, KLSE Composite rose 0.10 points or 0.01% to 1,852.10, Nikkei 225 soared 199.12 points or 1.33% to 15,145.44, Straits Times surged by 24.84 points or 0.78% to 3,217.62 and KOSPI Composite was up by 3.75 points or 0.19% to 2,001.00.

On the flip side, Shanghai Composite dropped 3.04 points or 0.15% to 2,055.95 and Taiwan Weighted was down by 26.76 points or 0.30% to 8,878.69.