Weak global cues and fears of SEBI tightening P-note rules made investors nervous on Friday, the 13th. The Nifty ended below 7850, down 85.50 points or 1 percent while the Sensex slipped 300.65 points or 1 percent at 25489.57.
Acting upon recommendations of the Special Investigation Team on black money, market watchdog SEBI plans to tighten due diligence requirements for issuance and transfer of controversy-ridden P-Notes and put the onus on investors to ensure compliance with anti-money laundering law. The regulator plans to put in place six specific changes to the KYC (Know Your Client) norms and transferability of Offshore Derivative Instruments (ODIs).
However, this has not deterred analysts betting on India. Jai Bala of cashthechaos.com says the market is headed sharply higher in the medium term. In an interview with CNBC-TV18, Bala said the next leg-up in the market will be very strong. “The 6900-7900 bounceback was a trailer. The next move will put a lot of people in awe,” he said.
In the near term, the market could head higher if 7990-8010 is taken out, Bala said. “Then it will be clear the next leg is under way,” he added.
Meanwhile banks lead the decline in today’s trade with the Bank Nifty falling 1.2 percent over previous close. Auto, capital goods and metal were also equally butchered. Adani Ports, HUL, BHEL, HDFC and Tata Steel were major lagards. Among gainers were Asian Paints, Tata Motors and ITC.
Also, MSCI, the leading global player in capital market indexes, has tweaked its India index, making four additions and three deletions.
The additions are Bajaj Finance, Havells, Titan and Yes Bank while deletions are Reliance Communication, REC and United Breweries.
Analysts say the changes to the benchmark — which is closely tracked by portfolio managers around the world wanting to invest in Indian stocks — could result in inflows of USD 102 million, USD 72 million, USD 98 million and USD 95 million for Bajaj Finance, Havells, Titan and Yes Bank respectively.