WEAK MARKETS

The Indian stock markets began the week on a rough note with both Indian benchmark indices Nifty and Sensex witnessing massacre in early trade on Wednesday on fresh selling by funds amid a weak global cues. Overnight, markets in Europe and US closed with big losses. Rising bond yields in Spain indicated the fragile nature of recovery in debt ridden European countries while, Asian shares exhibiting a choppy trade as uncertainty over global growth prospects, and resurfacing worries about debt restructuring in the euro zone. Back home, Sensex and Nifty struggling to hold their crucial 17,100 and 5,200 mark respectively. Except healthcare, all other sectoral indices were trading in the red with metal, bank, capital goods and realty stocks among the worst-hit. Meanwhile, the broader indices too were struggling to get some traction and the market breadth on the BSE was negative; there were 545 shares on the gaining side against 820 shares on the losing side while 52 shares remained unchanged.

On the positive side, shares of aviation companies like Jet Airways (India), Kingfisher Airlines and SpiceJet have rallied more than 5 percent each in opening trades in a hope that the government will allow foreign airlines to pick up stake in the domestic carriers. Moreover, Gas utility firm IGL rose over three percent. Shares of the company had fallen over 30 percent yesterday because of a government regulator's decision to slash tariffs by 60 percent with retrospective effect.

The BSE Sensex opened at 17,125.96; about 118 points lower compared to its previous closing of 17,243.84, and has touched a high and a low of 17,140.88 and 17,093.21 respectively.

The index is currently trading at 17,103.32, down by 140.52 points or 0.81%. There were 3 stocks advancing against 27 declines on the index.

The overall market breadth has made a negative start with 38.46% stocks advancing against 57.87% declines. The broader indices too were trading in the red; the BSE Mid cap and small cap indices declined 0.44% and 0.25% respectively.

The only gaining sectoral index on the BSE was HC up by 0.36%. While, Metal down by 1.22%, Bankex down by 1.09%, CG down by 1.03%, Oil and Gas down by 0.98% and Realty down by 0.93% were the top losers on the index.

The few gainers on the Sensex were Cipla up by 0.79%, Tata Motors up by 0.32% and Hindalco up by 0.16%.

On the flip side, Sterlite Industries was down by 2.30%, Jindal Steel was down by 2.08%, SBI was down by 1.44%, RIL was down by 1.31% and ICICI Bank was down by 1.26% were the top losers on the Sensex.

Meanwhile, foreign institutional investors (FIIs) will no longer require government permission to invest in the commodity exchanges as per the new FDI norms announced by the Ministry of Commerce & Industry. However, foreign direct investment (FDI) will continue to need the approval of the Foreign Investment Promotion Board (FIPB).

At present, foreign investment, by both FIIs and FDIs is capped at 49%. Within this overall limit of 49%, investment by registered FIIs, under the portfolio investment scheme (PIS) is limited to 23% and investment under the FDI scheme is limited to 26%. Both require government approval. But now as per the consolidated FDI policy, investments done by FIIs will no longer require approval of the FIPB with effect from April 10, 2012.

This change aligns the policy for foreign investment in commodity exchanges, with that of other infrastructure companies in the securities markets, such as stock exchanges, depositories and clearing corporations. Further, the government has also changed foreign investment norms for non-banking finance companies, retail, pharma and foreign institutional investors. The norms also seek to disincentivise import of second-hand capital goods, while encouraging e-commerce activities.

Also issue of equity shares under the FDI policy is currently allowed under the Government route for import of capital goods/ machinery/ equipment -including second-hand machinery. However it has been decided to exclude second hand machinery from its purview to promote state-of-the-art technology, compliant with international standards, in terms of being green, clean and energy efficient.

The S&P CNX Nifty opened at 5,209.45; about 18 points lower compared to its previous closing of 5,243.60, and has touched a high and a low of 5,211.75 and 5,194.40 respectively.

The index is currently trading at 5,203.00, lower by 40.60 points or 0.77%. There were 8 stocks advancing against 42 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 1.82%, BPCL up by 1.22%, Cipla up by 0.61%, Hindalco up by 0.56% and Dr Reddy up by 0.36%.

On the flip side, Sesa Goa down by 2.45%, Sterlite Industries down by 2.30%, Jaiprakash Associates down by 2.20%, Jindal Steel down by 2.11% and ACC down by 2.00%, were the major losers on the index.

Most of the Asian markets were trading in the red; Shanghai Composite lost 7.12 points or 0.31% to 2,298.74, Hang Seng plummeted 270.49 points or 1.33% to 20,085.75, Jakarta Composite shed 16.09 points or 0.39% to 4,133.71, Nikkei 225 plunged 91.27 points or 0.96% to 9,446.75, Straits Times sank 26.51 points or 0.89% to 2,955.93

On the flipside only Taiwan Weighted gained 13.76 points or 0.18% to 7,654.44

Stock markets in Malaysia remained closed on Wednesday on account of a nationwide holiday for Installation of the Yang Di-Pertuan Agong. The South Korean markets also remained shut for a holiday due to Assembly Members Election Day.