Benchmarks continue to trade in red in morning session

Indian bourses continued to trade in a tight range as investors and foreign funds were adopting a cautious approach, ahead of the start of the two-day US Federal Reserve policy meeting. Sentiment on the street weakened as India's export growth slipped to 2.35 per cent at $26.95 billion in August, while the numbers are five month low they have taken the trade deficit to four month high of to $10.83 billion, as imports of gold surged 176 percent after policy makers eased shipment curbs. Besides, a weakening trend on Asian bourses following overnight losses on the US market too influenced the sentiment. However, losses remained capped as Organisation for Economic Cooperation and Development (OECD), revised its forecast projection to 5.7 percent growth for the Indian economy 2014, much higher than its 4.9 percent growth projection in May this year. Besides, HSBC expects the India's GDP growth rate to strengthen further, while inflation to ease in the coming quarters due to base effects.

Meanwhile, Stocks from Realty, Consumer Durables and TECK counters were supporting the markets’ uptrend, while those from Oil & Gas, PSU and Banking counters were adding to the underlying cautious undertone. In scrip specific development, shares of Venus Remedies have declined after Crisil downgraded its ratings on the bank facilities to D from BB+. Besides, Tata Motors has dipped after global wholesales in August 2014, including Jaguar Land Rover, stood at 73,524 units showing a declination of 10% from the corresponding month last year. On the other hand, Wipro rose after its arm Wipro Arabia got an order from Saudi Electricity (SEC) for implementing plant maintenance and project system functionality of SAP’s ERP (enterprise resource planning) application.

On global front, Asian markets were trading lower as investors braced for a possible hawkish shift in the US Federal Reserve's policy stance as the Fed begins a two-day policy meeting later in the day. Back home, Indian rupee recovered from over one-month low by rising 11 paise to 61.02 against the dollar in early trade due to selling of the American currency by exporters and banks. The market breadth on BSE was positive, out of 2496 stocks traded, 1471 stocks advanced, while 929 stocks declined on the BSE.

The BSE Sensex is currently trading at 26786.35 down by 30.21 points or 0.11% after trading in a range of 26861.29 and 26745.54. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.443%, while Small cap index up by 0.70%.

The gaining sectoral indices on the BSE were Realty up by 1.63%, Consumer Durables up by 0.65%, TECK up by 0.26%, Capital Goods up by 0.23% and FMCG up by 0.18% while, Oil & Gas down by 0.83%, PSU down by 0.41%, Bankex down by 0.27%, Metal down by 0.19%, Auto down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma  up by 1.81%, Dr. Reddys Lab up by 1.69%, Bajaj Auto up by 0.96%, Wipro up by 0.76% and BHEL up by 0.75%. On the flip side, ONGC down by 1.66%, Axis Bank down by 1.61%, Tata Motors down by 0.96%, Sesa Sterlite down by 0.86% and Coal India down by 0.50% were the top losers.

Meanwhile, adding further pressure to the government’s effort to revive the economy, India's export growth slipped to 2.35 per cent at $26.95 billion in August, while the numbers are five month low they have taken the trade deficit to four month high of to $10.83 billion, as imports of gold surged 176 percent after policy makers eased shipment curbs. Gold imports have jumped significantly to $2.03 billion from $738.7 million a year ago, while trade deficit during the five months has reached $ 56.15 billion, lower than $ 70.6 billion in the year-ago period.

As per the data released by Ministry of Commerce and Industry, exports have been showing continuous downtrend in May, June and July, registering a growth of 12.4 per cent, 10.22 per cent, and 7.33 per cent respectively. Restrictions on gold imports led to decline in gems and jewellery exports by 10.31 percent to $3.23 billion in August, while shipments of electronic goods declined by 17.67 percent to $547 million. The other exporting sectors which recorded negative growth in August were tea, coffee, rice, tobacco, spices, oil meals, iron ore and petroleum products. However, pharmaceuticals, chemicals and engineering exports registered a growth of 7 percent, 2.66 percent and 22.2 percent respectively. Exporters body FIEO attributed the poor performance of exports to slowdown in European markets.

As far as imports were concerned, overall imports grew only by 2.08 per cent to $37.79 billion and dipped by 2.69 per cent to $190.94 billion during the first five months of this financial year. Oil imports declined by 14.97 percent in August to $12.83 billion, on the other hand non-oil imports during the month were up by 13.82 percent to $ 24.95 billion.

The CNX Nifty is currently trading at 8,029.80 down by 12.20 points or 0.15% after trading in a range of 8,044.90 and 8,019.65. There were 20 stocks advancing against 30 declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.83%, DLF up by 1.76%, United Spirits up by 1.74%, HCL Tech up by 1.59% and Dr. Reddys Lab up by 1.47%. On the flip side, ONGC down by 1.63%, BPCL down by 1.54%, Axis Bank down by 1.52%, Sesa Sterlite down by 1.13% and Indusind Bank down by 1.12% were the top losers.

Asian markets were trading mostly in the red; Straits Times dipped 0.74%, Nikkei 225 shed by 0.11%, Jakarta Composite declined by 0.03%, FTSE Bursa Malaysia KLCI decreased by 0.45% and Taiwan Weighted was down by 0.72%. On the flip side KOSPI Index added by 0.42%, Hang Seng up by 0.07% and Shanghai Composite was up by 0.01%.