Another Choppy Session Ahead

Amid high volatility in the global markets on account of geopolitical factors even the Indian equity markets ended marginally lower yesterday. It was volatile trading session, as investors booked profits in shares of oil explorers amid concerns over gas pricing.

India’s concern for crude oil rose amid media reports of attacks on NATO fuel trucks on the Afghanistan-Pakistan border. The S&P BSE Sensex ended at 25,201.80 down by 44.45points or 0.18% after hitting a high of 25,425 and low of 25,069 and the CNX Nifty ended 7,540.70 down by 17.50 points or 0.23% after hitting a high of 7,606 and low of 7,502.

The broader markets also ended lower in line with the benchmark indices as the BSE Mid-cap and Small-cap indices was down between 0.3%-0.4%. Market breadth at the BSE was negative, with 1589 declines and 1403 advances. As per provisional data from the stock exchanges, foreign portfolio investors (FPIs) bought shares worth a net Rs 366.18 crore on Wednesday, 18 June 2014.

While the markets remained volatile, SEBI provided reasons to cheer for. To encourage more promoters to tap the IPO market, SEBI has relaxed the minimum dilution criteria. Companies can now sell a minimum 25% stake or Rs 400 crore, whichever is more, in public offerings. Another major decision taken by the SEBI board was to extend the 25% minimum public shareholding requirement to state-owned companies. The capital market regulator has also extended the ambit of the popular offer for sale (OFS) mechanism for share sales. SEBI has also extended the ambit of the popular offer for sale (OFS) mechanism for share sales. Also, going ahead all research analysts will have to register with SEBI before they can make stock recommendation.

On the domestic front good news comes in from the fact that, Government cleared projects worth Rs 21000 crore. Clearing infra projects was need of the hour and we feel it will provide solace to many infra companies under stress.

As for the global markets, The Standard & Poor’s 500 Index extended a record rally and even other global equities rallied as the Federal Reserve’s policy statement fueled optimism that the economic recovery will accelerate. The S&P 500 rose 0.1 percent to a record 1,959.48. The benchmark equity index advanced for a fifth straight day, the longest streak since April. The Dow Jones Industrial Average increased 14.84 points, or 0.1 percent, to 16,921.46. The Nasdaq Composite Index slid 0.1 percent after reaching a 14-year high. Equities briefly extended an earlier loss after President Barack Obama said he’s sending as many as 300 U.S. military advisers to assist the Iraqi army battle an insurgency and is prepared to take additional “targeted, precise” action if necessary.

While US markets closed in green Asian Indices are still grappling for direction. Amid geopolitical factors like Iraq and Ukraine, the Asian equities are trading with caution. Nikkei is trading with gains of 0.20% followed by Hang Seng with 0.11 % gains. However the Shanghai Composite is trading in red with loss of 0.36%.

SGX Nifty is trading with marginal gains of 3 points or 0.04%. With Asian equities remaining cautious, Indian equities are not going to be an exception. We expect a flattish opening for Indian equities and then remain in a range in early hours of trade.