Sensex back in green, Nifty regains 9,600; Smallcap index underpeforms

The benchmark indices were trading marginally higher after a quiet start as Securities and Exchange Board of India (Sebi) on Monday proposed to bring in tougher regulations to squeeze the use of participatory notes, while negative trade in Asian markets, as volumes were muted due to holiday in Hong Kong and China, also contributed to losses. 

At 11:45 am, the S&P BSE Sensex was trading at 31,170, up 60 points, while the broader Nifty50 was ruling at 9,619, up 14 points. 

In the broader market, the S&P BSE Midcap gained 0.2%, while the S&P BSE Smallcap (down 0.1%) continued to trade lower. 

"Though yesterday’s positivity was on expected lines, achieving the first measured objective, volatility was more dominant keeping markets edgy. Oscillators are not too exhausted, but are not all that supportive towards directional upside. To this end, while positivity could still linger on, volatility will remain a dominant theme, before the next directional move. To this end, 9,530 will be critical, but favoured view expects this region not to give away easily," said by Anand James of Geojit Financial Services. 

Buzzing stocks

ICICI Bank, Cipla and Lupin were the best-performers on Sensex and added up to 2% on the BSE. 

Among losers, BHEL tanked over 8% to Rs 140 after the company's standalone net profit declined by 57% to Rs 215.55 crore in the March quarter as against Rs 505.71 crore in the corresponding quarter of the previous financial year due to lower income and provisions for higher wages.

Jubilant FoodWorks cracked 13% to  Rs 817.60 after the company on Monday reported a 75.88% fall in standalone net profit at Rs 6.71 crore for the fourth quarter ended March 31, 2017. It had posted a net profit of Rs 27.83 crore in the corresponding period of previous fiscal year. 

Coal India shed over 2% after the company on Monday posted a 38% fall in net profit for the fourth quarter ended March at Rs 2,716 crore caused by lacklustre power demand, falling realisations from e-auctions and efforts to keep prices below international levels. It had posted a profit of Rs 4,398 crore in the same period of last year. 

Sebi cracks the whip on p-notes

Sebi proposed tighter regulations for participatory notes (p-notes), an instrument used by foreign investors to take exposure to the domestic market without registering in India.

In a discussion paper, the market regulator proposed to bar p-notes, or offshore derivative instruments (ODIs), from taking speculative positions in the futures and options segment. It said note-holders would be allowed exposure to the derivatives market only for hedging and not for naked speculation.

The ban on derivative trades without underlying equity could impact nearly a third of ODI subscribers, who currently deal only in derivatives, say experts.

Global markets

Concerns about a Greek bailout, early Italian elections and comments by the European Central Bank chief about the need for continued stimulus all kept the euro under pressure on Tuesday.

The European geopolitical fears sapped risk appetite, weighing on Asian stocks and lifting safe havens including the yen and gold, though trading was thin with several markets closed for holidays.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3% following holidays in the US and Britain overnight.

China, Hong Kong and Taiwan markets are closed for holidays on Tuesday.

Japan's Nikkei dropped 0.5% dragged down by a stronger yen.

South Korea's KOSPI fell 0.6% and the Korean won lost 0.2% against the dollar.

(With inputs from Reuters)