Indian benchmarks have made a muted start on
Monday's morning trade as market participants adopted cautious approach
ahead of next resumption of parliament. Globally, the US markets climbed
on Friday, trimming weekly slump as optimistic words followed the
opening round of negotiations on averting automatic spending cuts and
tax increases, which is set to begin on January 1. Moreover, the Asian
counters were trading mixed at this point of time. The Chinese market
was marginally in red as Southeast Asian leaders have sought to ease
tensions with China over maritime disputes before a regional summit
involving US President Barack Obama, as concerns persist over weaker
demand in the global economy.
Back home, the downside remain capped on finance minister P Chidambaram's statement that amendments to General Anti-Avoidance Rules (GAAR), the controversial law against tax avoidance through foreign investments, have been finalized. 'Finance minister said that the final amendments to GAAR would come in 7-10 days. He said that the drafting work is complete. So, GAAR is under control. I have taken the decisions, subject to Prime Minister's approval and then Cabinet.' Moreover, software and technology stocks edged higher as Indian rupee depreciated to two months low and settled past psychological '55/$' level on Friday.
On the sectoral front, technology witnessed the maximum gain in trade followed by software and auto while, fast moving consumer goods, oil and gas and capital goods remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth on the BSE was negative; there were 786 shares on the gaining side against 881 shares on the losing side while 80 shares remain unchanged.
The BSE Sensex opened at 18,349.53; about 40 points higher compared to its previous closing of 18,309.37, and has touched a high and a low of 18,386.78 and 18,281.33 respectively.
The index is currently trading at 18,282.50, down by 26.87 points or 0.15%. There were 17 stocks advancing against 13 declines on the index.
The overall market breadth has made a negative start with 44.99% stocks advancing against 50.43% declines. The broader indices too were struggling to get some traction; the BSE Mid cap and Small cap indices declined 0.48% and 0.23% respectively.
The few gaining sectoral indices on the BSE were, TECk up by 0.46%, IT up by 0.28%, Auto up by 0.25% and Power up by 0.05%. While, FMCG down by 0.57%, Oil and Gas down by 0.52%, CG down by 0.48%, Realty down by 0.47% and Bankex down by 0.39% were the top losers on the index.
The top gainers on the Sensex were Maruti Suzuki up by 2.39%, Bharti Airtel up by 2.04%, M&M up by 0.81%, NTPC up by 0.73% and BHEL up by 0.56%.
On the flip side, HUL was down by 1.51%, RIL was down by 1.23%, Hindalco was down by 1.10%, Sterlite Industries was down by 0.87% and L&T was down by 0.83% were the top losers on the Sensex.
Meanwhile, market regulator Securities and Exchanges Board of India (SEBI) has allowed mutual funds to participate in Credit Default Swap (CDS) transactions, which allow business entities to hedge risks associated with the bonds market. This follows the RBI notification issued in May 2011 stating the guidelines on CDS for corporate bonds.
Importantly, SEBI has allowed mutual funds to participate in CDS transactions only as users (protection buyer). Thus, mutual funds are permitted to buy credit protection only to hedge their credit risk on corporate bonds they hold. The funds shall not be allowed to sell protection and hence are not permitted to enter into short positions in the CDS contracts. However, they shall be permitted to exit an existing 'bought position'. This too can be done only if the fund house's total exposure through CDS in corporate bonds along with equity, debt and derivative positions exceeds 100 per cent of the scheme's net assets.
Further, the total exposure related to premium paid for all derivative positions, including CDS, shall not exceed 20 per cent of the net assets of the scheme. In addition to this, the SEBI has prescribed that MFs can buy CDS for the eligible securities as reference obligations (underlying) only for fixed maturity plans exceeding one-year tenor.
The S&P CNX Nifty opened at 5,577.30; about 2 points lower compared to its previous closing of 5,574.05, and has touched a high and a low of 5,592.75 and 5,559.30 respectively.
The index is currently trading at 5,565.95, down by 8.10 points or 0.15%. There were 24 stocks advancing against 26 declines on the index.
The top gainers of the Nifty were Maruti Suzuki up by 2.54%, Bharti Airtel up by 2.01%, Infosys up by 1.03%, M&M up by 0.96% and NTPC up by 0.78%.
On the flip side, Ambuja Cement down by 1.45%, Axis Bank down by 1.39%, HUL down by 1.25%, RIL down by 1.23% and IDFC down by 1.19%, were the major losers on the index.
Asian equity indices were trading mixed; Shanghai Composite was down by 3.76 points or 0.19% to 2,010.96, Jakarta Composite was down by 12.70 points or 0.26% to 4334.54 and KLSE Composite was down by 8.50 points or 0.52% to 1,620.78.
On the other hand, Hang Seng was up by 98.27 points or 0.46% to 21,257.28, Nikkei 225 surged by 120.31 points or 1.34% to 9,145.10, Straits Times was up by 5.54% to 0.19% to 2,951.17, Seoul Composite gained 16.98 points or 0.91% to 1,877.81 and Taiwan Weighted gained 1.20 points or 0.02% to 7,131.27.
Back home, the downside remain capped on finance minister P Chidambaram's statement that amendments to General Anti-Avoidance Rules (GAAR), the controversial law against tax avoidance through foreign investments, have been finalized. 'Finance minister said that the final amendments to GAAR would come in 7-10 days. He said that the drafting work is complete. So, GAAR is under control. I have taken the decisions, subject to Prime Minister's approval and then Cabinet.' Moreover, software and technology stocks edged higher as Indian rupee depreciated to two months low and settled past psychological '55/$' level on Friday.
On the sectoral front, technology witnessed the maximum gain in trade followed by software and auto while, fast moving consumer goods, oil and gas and capital goods remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth on the BSE was negative; there were 786 shares on the gaining side against 881 shares on the losing side while 80 shares remain unchanged.
The BSE Sensex opened at 18,349.53; about 40 points higher compared to its previous closing of 18,309.37, and has touched a high and a low of 18,386.78 and 18,281.33 respectively.
The index is currently trading at 18,282.50, down by 26.87 points or 0.15%. There were 17 stocks advancing against 13 declines on the index.
The overall market breadth has made a negative start with 44.99% stocks advancing against 50.43% declines. The broader indices too were struggling to get some traction; the BSE Mid cap and Small cap indices declined 0.48% and 0.23% respectively.
The few gaining sectoral indices on the BSE were, TECk up by 0.46%, IT up by 0.28%, Auto up by 0.25% and Power up by 0.05%. While, FMCG down by 0.57%, Oil and Gas down by 0.52%, CG down by 0.48%, Realty down by 0.47% and Bankex down by 0.39% were the top losers on the index.
The top gainers on the Sensex were Maruti Suzuki up by 2.39%, Bharti Airtel up by 2.04%, M&M up by 0.81%, NTPC up by 0.73% and BHEL up by 0.56%.
On the flip side, HUL was down by 1.51%, RIL was down by 1.23%, Hindalco was down by 1.10%, Sterlite Industries was down by 0.87% and L&T was down by 0.83% were the top losers on the Sensex.
Meanwhile, market regulator Securities and Exchanges Board of India (SEBI) has allowed mutual funds to participate in Credit Default Swap (CDS) transactions, which allow business entities to hedge risks associated with the bonds market. This follows the RBI notification issued in May 2011 stating the guidelines on CDS for corporate bonds.
Importantly, SEBI has allowed mutual funds to participate in CDS transactions only as users (protection buyer). Thus, mutual funds are permitted to buy credit protection only to hedge their credit risk on corporate bonds they hold. The funds shall not be allowed to sell protection and hence are not permitted to enter into short positions in the CDS contracts. However, they shall be permitted to exit an existing 'bought position'. This too can be done only if the fund house's total exposure through CDS in corporate bonds along with equity, debt and derivative positions exceeds 100 per cent of the scheme's net assets.
Further, the total exposure related to premium paid for all derivative positions, including CDS, shall not exceed 20 per cent of the net assets of the scheme. In addition to this, the SEBI has prescribed that MFs can buy CDS for the eligible securities as reference obligations (underlying) only for fixed maturity plans exceeding one-year tenor.
Furthermore,
before undertaking CDS transactions, mutual funds shall frame a written
policy on participation in CDS approved by the Board of the Asset
Management Company and the Trustees as per the guidelines specified by
RBI and SEBI. This policy shall be reviewed by mutual funds, at least
once a year.
Meanwhile, SEBI, in order to encourage growth of
the corporate bond market, has also decided that the base of eligible
securities may be expanded for mutual funds to participate in repo in
corporate debt securities, from 'AAA' rated to 'AA 'and above rated
corporate debt securities. The S&P CNX Nifty opened at 5,577.30; about 2 points lower compared to its previous closing of 5,574.05, and has touched a high and a low of 5,592.75 and 5,559.30 respectively.
The index is currently trading at 5,565.95, down by 8.10 points or 0.15%. There were 24 stocks advancing against 26 declines on the index.
The top gainers of the Nifty were Maruti Suzuki up by 2.54%, Bharti Airtel up by 2.01%, Infosys up by 1.03%, M&M up by 0.96% and NTPC up by 0.78%.
On the flip side, Ambuja Cement down by 1.45%, Axis Bank down by 1.39%, HUL down by 1.25%, RIL down by 1.23% and IDFC down by 1.19%, were the major losers on the index.
Asian equity indices were trading mixed; Shanghai Composite was down by 3.76 points or 0.19% to 2,010.96, Jakarta Composite was down by 12.70 points or 0.26% to 4334.54 and KLSE Composite was down by 8.50 points or 0.52% to 1,620.78.
On the other hand, Hang Seng was up by 98.27 points or 0.46% to 21,257.28, Nikkei 225 surged by 120.31 points or 1.34% to 9,145.10, Straits Times was up by 5.54% to 0.19% to 2,951.17, Seoul Composite gained 16.98 points or 0.91% to 1,877.81 and Taiwan Weighted gained 1.20 points or 0.02% to 7,131.27.
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