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Sensex, Nifty consolidate; Midcap, Smallcap outperform


The News International Team

12:55pm Market Update: The market remained volatile with the Sensex falling 27.66 points to 28708.72. The Nifty declined 12.05 points to 8711.25.

About 1225 shares have advanced, 1343 shares declined, and 186 shares are unchanged on the BSE. 

12:45pm IPO News: The Securities and Exchange Board of India (SEBI) is planning rule changes that will make it easier for homegrown start-ups to list their shares on local bourses, sources involved in the process said, helping domestic investors to bet on the country’s booming online economy.

The SEBI is considering easing rules on mandatory disclosure for the draft prospectuses of Internet-based companies, the sources said.

One of the main items that could be scrapped is the need to detail the use of proceeds from the initial public offering of shares, they said. This is currently an obstacle for start-ups, as these companies don’t typically use cash to build plants or purchase tangible assets.

“A lot of them operate without any tangible assets,” said one of the sources directly involved in the process.

“That creates an issue when declaring the use of proceeds (in the draft prospectus).”

All the sources declined to be named, as they were not authorised to speak to the media given the rules are still being finalised. A spokesman for SEBI did not respond to Reuters calls and e-mail requesting comment.

12:30pm FII View: The market level today is recalibrating the fact that despite the new government coming in nine months ago, the country’s macroeconomic situation is yet to see a significant turnaround, is the word coming in from Sanjay Sinha, founder, Citrus Advisors. Corporate profits have not seen pick up yet, he says.

On today’s big event, he says if the US Federal Reserve does not raise rates, then the downside on the market gets capped. However, he does not see the Nifty crossing the 9000 mark.

According to Sinha, portfolio should consist of 60 percent cyclical and 40 percent defensive stocks. Pharma and IT sectors should be a part of the defensive portfolio, he says. He also advises investors to buy auto stocks on correction.

12:00pm Market Check: The market continued to be in a consolidation mode with the frontline indices slipping in and out of the red territory dragged by select power stocks. However, the broader markets outperformed again with the BSE Midcap and Smallcap indices rising half a percent each.

The Sensex declined 7.97 points to 28744.35 and the Nifty fell 5.15 points to 8718.15. About 1182 shares have advanced, 1284 shares declined, and 177 shares are unchanged on the BSE.

All eyes are on the US Fed decision due later tonight. Investors will watch for whether “patient” remains in the text or not. Market guru Marc Faber does not expect the Fed to increase interest rates this year.

Asian markets traded mostly higher. China’s Shanghai market hit a fresh multi-year high on hopes of further stimulus. In other asset classes, dollar remained steady and Brent crude slipped towards USD 53 per barrel.

Jindal Steel rose 1 percent after the steep fall it saw yesterday. The management clarified to CNBC-TV18 that it followed a fair bidding process and have not heard from coal ministry on any re-bidding. It hopes the government will respect outcome of coal block auction.

Sesa Sterlite climbed over 2 percent as enviornment ministry revoked suspension of mining leases in Goa. Deutsche Bank believes it is a long term positive development for the stock.

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