Sensex manages slim gains...Autos, FMCG slip

The first trading session on Dalal Street finished on a positive note, kicking off the new year in green territory after clocking hefty losses last year. The Indian markets opened on a rather subdued note before climbing to a day's high in early morning trade. However, they retreated to day's low in early afternoon before recovering again, tracking positive cues from the European markets. One should bear in mind the fact that the advance today came on light trading volumes as many participants were enjoying extended new year holidays. The depth was also missing due to lower participation in the equity markets.



On the positive side, the Government over the weekend allowed Qualified Foreign Investors to directly invest in Indian equity market. The move is aimed at widening the class of investors, attract more foreign funds, and reduce market volatility and to deepen the Indian capital market.


The new rule from the central bank and stock market regulator is expected to take effect by Jan. 15, the Government said in a statement. Currently, individual investors can only invest in Indian shares through so-called participatory notes.

Foreign investors pulled out US$495.5mn from India’s equities last year, compared with a record inflow of US$29.4bn in 2010, data from the exchange regulator show.

The Advance-Decline ratio on the BSE was slightly in favor of the bulls due to the late spurt in the Large-Cap shares. Overall, the undertone remains cautious amid persistent challenges confronting the domestic as well as global economy.