Markets erase some early gains; Nifty remains above 5,400 level

Indian equity markets erased some early gains, post the release of industrial production data for July, which came in at 0.1% as compared to a contraction of 1.8% in previous month, but edged up again following a fresh round of buying at lower levels. The BSE benchmark gained 87 points and inched towards the 18,000 level, while NSE benchmark remained above the 5,400 level. In currency markets, rupee drifted down on fresh dollar demand from importers. Investors were still cautious ahead of major events like monitory policy and German's Constitutional Court ruling. On sectoral front, automobile, information technology and bank stocks were finding support, while power stocks were mostly trading weak. In global markets, most Asian shares were trading in green on Wednesday ahead of a US Federal Reserve meeting, which most economists expect will deliver fresh stimulus to kick start the economy. Back home, the market breadth favoring positive trend; there were 1,467 shares on the gaining side against 1,006 shares on the losing side while 114 shares remain unchanged.

The BSE Sensex is currently trading at 17,940.92 up by 87.97 points or 0.49% after touching a high of 17,953.86 and low of 17,904.04. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54% and Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were, IT up by 1.07%, TECk up by 0.84%, Auto up by 0.83%, CD up by 0.72% and Bankex up by 0.65%. While, Power down by 0.54%, Health Care down by 0.27% and Oil & Gas down by 0.01% were top losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.08%, Coal India up by 2.17%, TCS up by 1.76%, Wipro up by 1.69% and HUL up by 1.60%.

On the flip side, Jindal Steel was down by 2.82%, Cipla was down by 1.66%, Hero MotoCorp was down by 1.03%, NTPC was down by 0.66% and BHEL was down by 0.65% were top losers on the Sensex.

Meanwhile, in compliance with the recommendations from Foreign Investment Promotion Board (FIPB) in its meeting held on August 24, 2012, the government has cleared 21 Foreign Direct Investment (FDI) proposals of about Rs 2,410 crore. Out of this, 8 proposals are relating to FDI in Brownfield pharmaceuticals sector which amounts to Rs 1,842.55 crore.

These pharma companies might have to maintain the quantitative level of NLEM (National List of Essential Medicines) drugs production annually at the time of induction of foreign investment, for the next five years. Besides, the Research & Development expenses incurred annually by the investee company at the highest level in the three preceding years to the induction of foreign investment will be maintained in value terms annually over the next five years post induction of FDI.

US drug maker Pfizer's plan to invest about Rs 800 crore in an operating-cum-investing company to carry out the business in pharmaceutical sector, while Sterlite Networks, Dadar and Nagar Haveli, which plans to bring in FDI worth Rs 500 crore for telecom business, was cleared. Mumbai based Arch Pharmalabs' proposed to invest Rs 372 crore.

FIPB also approved the proposal of The Wall Street Journal for change in the foreign collaborator by way of overseas merger within group companies. India allows FDI in most of the sectors through automatic route, though approval of FIPB is required in certain sensitive sectors, like telecom. FDI inflows in the country for fiscal 2011-12 were at $36.50 billion.

The S&P CNX Nifty is currently trading at 5,411.95, up by 21.95 points or 0.41% after trading in a range of 5,417.10 and 5,401.70. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were Tata Motors up by 3.00%, Coal India up by 2.00%, Wipro up by 1.77%, TCS up by 1.75% and HUL up by 1.66%.

On the flip side, Jindal Steel down by 2.80%, Siemens down by 2.61%, Cipla down by 1.69%, Reliance Infra down by 1.51% and Hero MotoCorp down by 0.84%, were the major losers on the index.

Most of the Asian indices were trading in green; Nikkei 225 up by 1.73%, KLSE Composite up by 0.04%, Kospi Composite Index up by 1.56%, Strait Times up by 0.37%, Hang Seng index up by 0.92% and Taiwan waited up by 1.14%, while Shanghai Composite down by 0.29% and Jakarta Composite down by 0.05%.