Benchmarks continue to hold their head above water

After getting a cautious but positive start, benchmarks continued to hold their head above water with investors keenly eyeing the August CPI and July industrial production data to be released later today. Besides, some traders were also cautious ahead of Supreme Court verdict which may come any time before September 27, 2014. Sentiment on the street got some support from monsoon front as India recorded its heaviest spell of monsoon rains in 2014 in the past week, logging in surplus for the second straight week. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 433.55 crore on September 11, 2014.

Meanwhile, gains at Dalal Street were led by stocks belonging from Consumer Durables, FMCG and Oil & Gas counters. Additionally, fertilizer stocks too were gaining a lot of traction as Ananth Kumar, Minister for Chemicals & Fertilizers, stated that the government has proposed to come out with a new fertilizer policy. On the flip side, stocks from Metal, Power and banking counters witnessing brutal thrashing, were restricting further upside of the markets. In scrip specific development, shares of Sagar Cements touched the roof on the buzz of plan to acquire cement business of BMM Ispat. On the other hand, Shares of Sun Pharmaceutical Industries and Ranbaxy Laboratories have dipped on reports of drug regulator, US Food and Drug Administration (FDA) conducting a surprise inspection of the Sun Pharma’s manufacturing plant at Halol in Gujarat.

On global front, Asian markets were trading mixed on the final trading day of the week, as investors awaited the release of Chinese economic statistics and weak global sentiment. Back home, the rupee fell by 9 paise to 61.02 against the US dollar in early trade due to increased demand for the American unit from importers. The market breadth on BSE was positive, out of 2449 stocks traded, 1434 stocks advanced, while 937 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27023.50 up by 27.63 points or 0.10% after trading in a range of 27065.02 and 26997.33. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index gained 0.52%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.10%, FMCG up by 0.59%, Oil & Gas up by 0.33%, Auto up by 0.27% and Infrastructure up by 0.11%, while Metal down by 0.30%, Power down by 0.29%, Bankex down by 0.09%, IT down by 0.08% and Realty down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.14%, ITC up by 0.97%, Bharti Airtel up by 0.84%, Hindustan Unilever up by 0.72% and HDFC up by 0.69%. On the flip side, Sun Pharma down by 2.77%, Hindalco down by 1.48%, Coal India down by 0.73%, Wipro down by 0.72% and Tata Power down by 0.66% were the top losers.

Meanwhile, in a move which would provide further relief to the auto-makers, the government is mulling at the proposal for extending excise duty concessions to the automobile sector beyond December. Further, towards this development, the Heavy Industry Ministry is likely to send a proposal to Finance Ministry regarding extension of excise duty concession till March 31, 2015.

The extension of duty concession would enable continuation of excise duty on small cars, scooters, motorcycles and commercial vehicles at the current level of 8% from 12% previously and would enable factory gate duty on SUVs at the reduced rate of 24% as against 30%. Meanwhile, the duty on large cars will continue at 24% compared with 27% earlier, while the duty on mid-sized cars will stand at 20% from 24%.

The government to help the industry tide over sluggish sales had cut excise duty on cars, SUVs and two-wheelers as well as consumer durables in the Interim Budget in February. While, in the cheer for automobile and consumer durable sectors, the government in June this year extended the excise duty concessions which were earlier valid till June 30 by six months to December 31. However, it then also announced that capital goods and consumer durables will continue to attract a lower duty of 10% as against the pre-budget rate of 12%.

Most carmakers had passed on the benefit of excise duty reduction to customers by cutting prices on account of sluggish sales of the industry, which were already impacted by soaring prices of fuel. Automobile sales in India fell for the second consecutive year in 2013-14 and were 4.65% lower at 1786,899 units. In 2012-13, car sales fell 6.69%, the first drop in a decade.

In a separate development, Heavy Industries Ministry is contemplating over a policy of mandatory recalls, which will do away with the current system of voluntary recalls by auto companies.

The CNX Nifty is currently trading at 8,089.25 up by 3.55 points or 0.04% after trading in a range of 8,102.95 and 8,080.20. There were 24 stocks advancing against 26 declining on the index.

The top gainers on Nifty were Asian Paints up by 1.71%, Maruti Suzuki up by 1.14%, ITC up by 1.04%, Bajaj Auto up by 0.88% and BPCL up by 0.85%. On the flip side, Sun Pharma down by 2.77%, Power Grid down by 1.34%, HCL Tech down by 1.29%, Hindalco down by 1.27% and Ultratech Cement down by 1.13% were the top losers.

Asian markets were trading mixed; Straits Times was surged 0.07%, Nikkei 225 strengthen by 0.38%, KOSPI Index increased by 0.47% and Jakarta Composite added by 0.13%. On the flip side FTSE Bursa Malaysia KLCI down by 0.12%, Shanghai Composite was down by 0.08%, Hang Seng contracted by 0.38% and Taiwan Weighted was down by 0.93%.