Benchmarks extend losses; Realty, PSU drag

Indian equity benchmarks extended losses and continued to trade in red in the late afternoon session on account of selling in frontline blue chip counters and taking cues from global counterparts. The sentiments were on pessimistic note after RBI’s governor, underscored that there were no chances of RBI slashing rates at the month-end monetary policy announcement, citing that Inflation in Asia’s third-largest economy, India, was still high and hence there was no point in slashing interest rates since this would further build on to inflationary pressures. Traders were seen piling positions in FMCG and IT while selling was witnessed in Realty, PSU and Consumer Durables sector stocks. In scrip specific development, Colgate-Palmolive (India) was trading firm after a foreign brokerage firm upgraded the stock to outperform from underperform. Marico was trading in green touching fresh 52-week high after the foreign brokerage firm added the company in its top pick in the mid-cap consumer space.

On the global front, the Asian markets were trading mostly in red while the European market were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below psychological 8,000 and 26,600 levels respectively. The market breadth on BSE was negative in the ratio of 793:2115 while 87 scrips remained unchanged.

The BSE Sensex is currently trading at 26595.85, down by 220.71 points or 0.82% after trading in a range of 26550.29 and 26861.29. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.69%, while Small cap index down by 3.21%.

The gaining sectoral indices on the BSE were FMCG up by 0.12%, IT up by 0.07% while, Realty down by 2.62%, PSU down by 2.54%, Consumer Durables down by 2.41%, Power down by 2.40%, Oil & Gas down by 2.18% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.45%, Sun Pharma Industries up by 0.62%, Bharti Airtel up by 0.57%, Infosys up by 0.55% and Hero MotoCorp up by 0.45%. On the flip side, Tata Steel down by 3.25%, ONGC down by 2.63%, Axis Bank down by 2.57%, Tata Motors down by 2.54% and Tata Power down by 2.53% 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 7967.90, down by 74.10 points or 0.92% after trading in a range of 7950.90 and 8044.90. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 1.28%, Sun Pharma Industries up by 0.77%, ITC up by 0.67%, Infosys up by 0.66% and Bharti Airtel up by 0.60%. On the flip side, BPCL down by 3.28%, Tata Steel down by 3.26%, PNB down by 3.20%, Tata Power down by 2.70% and IDFC down by 2.68% were the top losers.

The Asian markets were trading mostly in red; Hang Seng was down 220.98 points or 0.91% to 24,136.01, Taiwan Weighted down by 84.06 points or 0.91% to 9,133.40, Shanghai Composite down by 42.59 points or 1.82% to 2,296.56, Straits Times down 40.13 points or 1.21% to 3,272.34, Nikkei 225 down by 36.76 points or 0.23% to 15,911.53, and Jakarta Composite was down by 6.18 points or 0.12% to 5,138.72.

On the other hand, KOSPI Index was up by 7.1 points or 0.35% to 2,042.92. The Malaysian market was closed today on account of ‘Malaysia Day’ holiday.

The European markets were trading in red; Germany’s DAX was down by 42.86 points or 0.44% to 9,616.77, France’s CAC was down 26.83 points or 0.61% to 4,401.80 while, UK’s FTSE 100 was down by 19.32 points or 0.28% to 6,784.89.