CAUTIOUS MOOD

The Indian equity markets extended early losses and currently trading at the low point of the day as few front line stocks retreated after a brisk start. Investors continued offloading shares as mood remained a bit cautious amid lasting fears about the economic situation in Europe. High inflation and concerns about slowing growth too weigh on sentiment to an extent. Sensex down by 80 points while, Nifty slips deeper by 0.41%. On sectoral front, select stocks from consumer durables and capital goods sectors moved higher on the major Indian bourses. Heavy selling was witnessed in realty, bank and healthcare stocks. Stocks from metal, oil, power and automobile sectors too were drifting lower on selling pressure. Midcap and smallcap stocks are quite subdued at present. On the global front, Asian markets too extended losses. Back home, the market breadth favoring the positive trend; there were 1,632 shares on the gaining side against 801 shares on the losing side while 106 shares remained unchanged.
The BSE Sensex is currently trading at 17,481.47, down by 81.14 points or 0.46%. The index has touched a high and low of 17,632.23 and 17,455.22 respectively. There were 9 stocks advancing against 21 declines on the index.
The broader indices too following the benchmarks; the BSE Mid cap and Small cap indices down by 0.03% and 0.05% respectively.
The top gaining sectoral indices on the BSE were, CD up by 0.25% and CG up by 0.01%. On the flip side, Realty down by 2.00%, Bankex down by 0.72%, HC down by 0.58%, Oil & Gas down by 0.50% and Metal down by 0.44% were the only losers on the index.
The top gainers on the Sensex were TCS up by 0.69%, ONGC up by 0.61%, Hindustan Unilever up by 0.45%, Coal India up by 0.32% and Hero MotoCorp up by 0.27%.
On the flip side, DLF down by 2.61%, ICICI Bank down by 1.38%, NTPC down by 1.23%, Sun Pharma down by 1.21% and Cipla down by 1.04% were the top losers on the Sensex.
Meanwhile, the ministry of finance hinted that the government may soon increase the investment limit for the Foreign Institutional Investors (FIIs) in corporate bonds and Government securities (G-secs) by $5 billion each. This move will help central government to raise funds via market borrowing programme without hurting availability of money for the private sector. 
A senior finance ministry official said, 'we are planning to raise the investment limits for FIIs in corporate bonds and G-secs soon'. By adding further he said the limits in both corporate bonds and G-secs would be enhanced by $5 billion each.    
The FIIs have almost exhausted the Rs 43,650 crore or $10 billion investment limit for purchase of G-secs and they would not be able to buy more securities unless the ceiling is enhanced. According to the latest data, the FIIs investment in G-secs stood at Rs 42,388 crore. The G-secs includes treasury bills and dated securities issued by the central and state governments.
As per the proposal, the FII investment limit in corporate bonds is likely to increase from $15 billion presently to $20 billion. The FII investment cap for G-secs is also expected to increase from $10 billion to $15 billion. And this new limit will have some relaxation in lock-in period and bond tenure norms. In September, the government revised its market borrowing programme for current financial year and decided to raise an additional Rs 52,800 crore. After the revision, the government will raise Rs 4.7 lakh crore from market up from Rs 4.37 lakh crore in the last financial year.  

There are anxieties that the increased government borrowing would reduce the credit availability for the private sector. Earlier, the government had relaxed the norms for FII investment in long-term infrastructure bonds.

The S&P CNX Nifty is currently trading at 5,262.75, lower by 21.45 points or 0.41%. The index has touched high and low of 5,304.25 and 5,252.00 respectively. There were 15 stocks advancing against 35 declining ones on the index.
The top gainers of the Nifty were Cairn India up by 3.22%, Ambuja Cement up by 1.43%, Reliance Communication up by 1.38%, Reliance Infrastructure up by 1.23% and Reliance Power up by 1.05%.
On the flip side, DLF down by 2.93%, BPCL down by 2.70%, Siemens down by 1.76%, Sun Pharma down by 1.63% and IDFC down by 1.63%, were the major losers on the index.
Asian counterparts were trading mixed. Shanghai Composite gained 0.02%, Hang Seng rose 0.17%, and Jakarta Composite added 0.54% and KLSE Composite captured 0.55%. On the flip side, Nikkei 225 declined 1.27%, Seoul Composite slipped by 0.83%, Straits Times down by 0.05% and Taiwan Weighted inched down by 0.27%.