Benchmarks continue to trade in red; Oil & Gas drags

Indian equity markets extended losses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were on downbeat mood after manufacturing sector growth slowed down as HSBC’s Purchasing Managers’ Index (PMI) dropped to a nine-month low of 51 in September. Traders were seen piling positions in IT, TECK and Power while selling was witnessed in Oil & Gas, FMCG and Bankex sector stocks. In scrip specific development, Jet Airways and SpiceJet were trading in green after price of aviation turbine fuel (ATF) or jet fuel was reduced by a steep 3% on back of falling international oil rates. Apollo Hospitals Enterprise was trading in green after it joined hands with Sanofi India to set up 50 clinics to provide diabetes care.

On the global front, the Asian markets were trading mostly in red while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,000 and 26,600 levels respectively. The market breadth on BSE was negative in the ratio of 1253:1459 while 93 scrips remained unchanged.

The BSE Sensex is currently trading at 26591.30, down by 39.21 points or 0.15% after trading in a range of 26549.54 and 26683.70. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was up by 0.10%, while Small cap index down by 0.12%.

The gaining sectoral indices on the BSE were IT up by 1.67%, TECK up by 1.22%, Power up by 0.02% while, Oil & Gas down by 1.11%, FMCG down by 1.09%, Bankex down by 0.38%, Infra down by 0.22%, Metal down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.10%, Infosys up by 1.75%, Hero MotoCorp up by 1.52%, TCS up by 1.49% and Coal India up by 1.17%. On the flip side, Maruti Suzuki down by 2.49%, GAIL India down by 2.14%, Tata Power down by 1.87%, Tata Steel down by 1.75% and ITC down by 1.74% were the top losers.

Meanwhile, business activity in Indian manufacturing sector, although improving for the eleventh consecutive month, expanded at its weakest pace in nine months, i.e. since December 2013, for the month of September on account of slow growth in new orders combined with slowdown in output. The HSBC Manufacturing Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, fell to 51.0 in the month of September from 52.4 in August. The reading however remained above the crucial 50 mark for the eleventh consecutive month that separates growth from contraction and was indicative of modest improvement in operating conditions. Indicative of weak demand, the new orders sub index fell to 51.3 from 54.5, the steepest fall in 18 months. Growth of new business was broad-based by sector, with the sharpest rise noted in capital goods. By sub-sector, the strongest expansion occurred in the intermediate goods category

Meanwhile, purchasing activity rose in line with production and new orders, as the rate of expansion slowed to a four-month low in September. Subsequently, input stocks increased fractionally in September. In contrast, Indian manufacturers reduced their post-production inventories, marking the end of a year-long period of accumulation. However, in an encouraging sign, inflationary pressure from both inputs and outputs eased in September. While, the Input costs continued to rise at a solid pace, the rate of cost inflation decelerated sharply from the prior month. 

The survey further points that though the rate of cost inflation decelerated sharply, which is the mildest since May, 2013, the central bank is likely to look beyond the near term moderation and keep policy rates elevated so as to reign in entrenched inflation expectations. The Reserve Bank of India (RBI) aims to lower retail inflation to 6% by January 2016 and the elevated inflation and risks of a spiral in food and fuel prices prompted RBI Governor Raghuram Rajan to keep interest rates unchanged on Tuesday.

The CNX Nifty is currently trading at 7951.80, down by 13.00 points or 0.16% after trading in a range of 7936.70 and 7977.50. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.99% and Infosys up by 1.89% and Hero MotoCorp up by 1.56% and HCL Tech. up by 1.56% and TCS up by 1.47%. On the flip side, Indusind Bank down by 2.41%, Maruti Suzuki down by 2.40%, GAIL India down by 2.33%, Tata Power down by 1.81% and Tata Steel down by 1.70% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 91.27 points or 0.56% to 16,082.25, KOSPI Index decreased 28.55 points or 1.41% to 1,991.54, Straits Times decreased 13.46 points or 0.41% to 3,263.28 and FTSE Bursa Malaysia KLCI decreased 2.3 points or 0.12% to 1,844.01.

On the flip side, Taiwan Weighted increased 23.34 points or 0.26% to 8,990.26 and Jakarta Composite increased 23.89 points or 0.47% to 5,161.47.

Shanghai Stock Exchange and Hong Kong Stock Exchange were closed today on account of ‘National Day’ holiday.

The European markets were trading mostly in red; UK’s FTSE 100 decreased 29.98 points or 0.45% to 6,592.74, France’s CAC decreased 6.25 points or 0.14% to 4,409.99 while, Germany’s DAX increased 7.28 points or 0.08% to 9,481.58.