Benchmarks trade lower in early deals on feeble global cues

Indian equity benchmarks that resumed trading after five day long break are trading lower in early deals on Tuesday amid feeble global cues. Investors remained on sidelines ahead of the second quarter earnings with Infosys to kick-start the September quarter earnings season on Friday. However, losses remained capped as some support came in with the CII Business Confidence Index (CII-BCI) for July-Sept quarter FY15 shooting up to 57.4, up from 53.7 in April-June quarter and 49.9 in Jan-March quarter this year. During the same quarter last fiscal, the index had touched the all-time low value of 45.7. Similarly, Ficci’s Overall Business Confidence Index stood at 72.7, the highest in 15 quarters.

Global cues remained sluggish with the US markets giving up some of their Friday’s gains in last session after a lackluster session of trade, as traders looked reluctant to take the markets further high lacking any major economic data. The Asian markets were trading mixed at this point of time with some of the indices modestly in red and the Japanese market was trading cautiously after the yen held its biggest advance against the dollar since April, as the Bank of Japan is projected to keep record stimulus unchanged today.

Back home, on the sectoral front, software, technology and consumer durables witnessed the maximum gain in trade, while metal, fast moving consumer goods and healthcare remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1076 shares on the gaining side against 831 shares on the losing side while 89 shares remain unchanged.

The BSE Sensex opened at 26487.51; around 80 points lower as compared to its previous closing of 26567.99, and has touched a high and a low of 26570.38 and 26430.65 respectively. The BSE Sensex is currently trading at 26471.48, down by 96.51 points or 0.36%. There were 11 stocks advancing against 19 stocks declining on the index.

The overall market breadth remained in the favour of advances with 53.91% stocks advancing against 41.63% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index up by 0.43%.

The few gaining sectoral indices on the BSE were IT up by 0.47%, TECK up by 0.44%, Consumer Durables up by 0.28% and Oil & Gas up by 0.01% while, Metal down by 0.63%, FMCG down by 0.63%, Healthcare down by 0.28%, Realty down by 0.28% and Bankex down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.24%, TCS up by 0.80%, Axis Bank up by 0.77%, Maruti Suzuki up by 0.70% and ICICI Bank up by 0.46%. On the flip side, Hindalco down by 3.32%, HDFC down by 2.69%, Cipla down by 2.25%, Mahindra & Mahindra down by 1.60% and Hero MotoCorp down by 1.56% 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

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 opened at 7,897.40; around 48 points lower as compared to its previous closing of 7,945.55, and has touched a high and a low of 7,943.05 and 7,897.15 respectively. The CNX Nifty is currently trading at 7912.05, down by 33.50 points or 0.42%. There were 15 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.11%, Axis Bank up by 0.82%, TCS up by 0.81%, HCL Tech up by 0.80% and IDFC up by 0.59%. On the flip side, Hindalco down by 3.03%, HDFC down by 2.71%, DLF down by 2.59%, Jindal Steel & Power down by 2.46% and Ultratech Cement down by 2.33% were the top losers.

Asian markets were trading mixed; Hang Seng gained 118.45 points or 0.51% to 23,433.49, KOSPI Index improved 4.19 points or 0.21% to 1,972.58, Jakarta Composite spurted by 10.83 points or 0.22% to 5,010.97 and FTSE Bursa Malaysia KLCI was up by 5.38 points or 0.29% to 1,846.20.

On the flip side, Nikkei 225 tumbled by 41.98 points or 0.26% to 15,848.97, Straits Times slipped 11.06 points or 0.34% to 3,242.18 and Taiwan Weighted was down by 53.00 points or 0.58% to 9,042.14.