Benchmarks continue to trade range-bound; Sensex holds above crucial 26,750 level

Benchmark equity indices continue to trade range-bound in absence of any positive triggers and prevailing caution ahead of US Federal Reserve meeting, wherein investors across the globe are gearing up for a hawkish statement from the US central bank. Meanwhile, some amount of disappointment also crept into Dalal Street after RBI governor, Raghuram Rajan, underscored that central bank was likely to keep interest rates on hold later this month to prevent a revival in price pressures once the economy gains momentum and would slash rates only when its feasible. Trading with slender losses of around one tenth of a percent, while Sensex was holding above the crucial 26,750 level, Nifty was trading little below the psychologically crucial 8,050 level. Meanwhile, broader indices showcasing outperformance for yet another session, were trading with gains in the range of 0.20%-0.60%.

Sectorally, much of demand was witnessed by stocks from Realty, followed by Technology and Information Technology counters. On the flip side, stocks from Oil & Gas, Public Sector Undertaking and Metal counters were the prominent losers. Real estate stocks gained as investors took new long positions in equity derivatives on Tuesday. Meanwhile, PSU oil marketing companies' stocks took a hit after reports suggested that India would decide on ending government control on diesel pricing after elections in two states next month, an oil ministry source said, even though local prices of the fuel are currently higher than the global rates, making a case for a cut in retail prices. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1498:1178; while 96 shares remained unchanged.

The BSE Sensex is currently trading at 26785.77, down by 30.79 points or 0.11% after trading in a range of 26745.54 and 26861.29. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.22%, while Small cap index up by 0.58%.

The gaining sectoral indices on the BSE were Realty up by 1.35%, TECK up by 0.64%, IT up by 0.61%, FMCG up by 0.25%, Consumer Durables up by 0.22% while, Oil & Gas down by 1.17%, PSU down by 1.01%, Metal down by 0.64%, Bankex down by 0.54%, Auto down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.56%, Sun Pharma Inds. up by 1.20%, Infosys up by 1.02%, Bharti Airtel up by 0.85% and Wipro up by 0.76%. On the flip side, ONGC down by 2.68%, Sesa Sterlite down by 1.89%, Axis Bank down by 1.87%, Coal India down by 1.42% and Tata Motors down by 0.97% were the top losers.

Meanwhile, in what could be termed as first step in the direction of ‘made in India’ concept announced by Prime Minister Narendra Modi, the government on Monday approved a Rs 930 crore scheme to enhance the competitiveness of the capital goods sector in order to boost the economy. The scheme on enhancement of competitiveness in the Indian capital goods sector which will be implemented in the 12th Plan period and spill over to the 13th Plan period, requires an estimated outlay of Rs 930.96 crore. However, the gross budgetary support (GBS) from the government for the scheme would be Rs 581.22 crore and the balance Rs 349.74 crore would be contributed by the stakeholder industries.

Further, the scheme would cover sub sectors like machine tools, textile machinery, construction and mining machinery, and process plant machinery. However, for the scheme to be implemented, issue of technological depth creation in the capital goods sector and creation of common industrial facility centres would have to be addressed.

The scheme basically has five components to be achieved including creation of advanced centres of excellence for R&D and technology development, integrated industrial infrastructure facilities or machine tool parks and setting up common engineering facility centre for textile machinery. It would also include testing and certification centre for earth moving machineries and setting up of a technology acquisition fund under the Technology Acquisition Fund Programme (TAFP) to help the capital goods industry to acquire and assimilate specific technologies.

Interestingly, the announcement of this scheme comes at a time when Prime Minister is keen to turn India into a manufacturing hub and would also give a fillip to capital goods production that contracted 3.8% in July this year. The sector however provides 9%-12% of the total manufacturing value added, while the consumption of capital goods constitutes a constant share of 17%-21% of the total gross domestic investment in the country.

The CNX Nifty is currently trading at 8027.25, down by 14.75 points or 0.18% after trading in a range of 8019.65 and 8044.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were DLF up by 1.87%, United Spirits up by 1.49%, Dr. Reddys Lab up by 1.36%, Sun Pharma Inds. up by 1.21% and Infosys up by 1.06%. On the flip side, ONGC down by 2.58%, Sesa Sterlite down by 2.09%, Axis Bank down by 1.88%, BPCL down by 1.76% and Asian Paints down by 1.66% were the top losers.

Asian markets were trading down in dumps; with Hang Seng trading lower by 104.67 points or 0.43% to 24,252.32; Taiwan Weighted down by 84.06 points or 0.91% to 9,133.40; Nikkei 225 down by 36.76 points or 0.23% to 15,911.53; Straits Times down by 26.23 points or 0.79% to 3,286.24; Shanghai Composite down by 21.59 points or 0.92% to 2,317.55; FTSE Bursa Malaysia KLCI down by 8.34 points or 0.45% to 1,847.30 and Jakarta Composite down by 4.82 points or 0.09% to 5,140.08. On the flip side, KOSPI Index up by 7.1 points or 0.35% to 2,042.92 was the only gainer amongst Asian pack.